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Macy’s slow demise

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  P&G leader Arthur Jones once said, “All organizations are perfectly designed to get the results they get!” This truism should be tattooed on every leader’s chest so that one glimpse in the morning mirror reminds them of the CEO’s responsibility. If they don’t like their organizational results, they must change the underlying design that created them. After closing 40 stores last year, Macy’s recently announced it plans to shut down another 100 this year. Its CEO blamed a change in the retail environment, taking no responsibility himself for Macy’s poor showing. Hmm. A CEO that increased Macy’s borrowings to buy back its stock, as the corporation did last year, has a lot of explaining to do. Frankly, I am mad at Macy’s. The company pursued an acquisition strategy that rolled up iconic regional department stores to leverage advertising, purchasing power, and back…

How Lyft can surpass Uber

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My daughter, Lauren Christianson, does experiential marketing out of an agency (Cunning) in NYC, producing events for clients such as ride-share company Lyft, Uber’s main competitor. Experiential marketing immerses customers in the brand’s promise, such as Lyft’s fun and irreverent brand personality. This past Halloween, for example, Lauren used special effects make-up artists to transform actors in San Francisco and New York City into zombies. People could request Lyft Zombie Mode and have a zombie delivered to their gathering. Other recent work includes Lyft Ghost Mode, a promotion for the new Ghostbusters movie, where users could take a ride in an Ecto-1 vehicle. (See picture.) There was also Lyft Jazz Mode at the New Orleans Jazz and Heritage Festival, where riders could order a vehicle with live jazz musicians playing. Both companies are networks (also called two-sided markets) — digital platforms enabling individual…

KOHL’S: Will Another One Bite the Dust?

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  Kohl’s Corporation, headquartered in Menomonee Falls, Wisconsin, started with a unique business model: just the soft goods. It offered consumers a comfortable buying experience at lower-than-department store prices. Some people, especially Midwesterners, swore by the brand. My sister-in-law— born, raised, still living in Milwaukee, and likely never to leave — visits Kohl’s regularly for good deals and an easy shopping experience. As it grew, Kohl’s extended its geographic reach to about 1,200 stores, creating a publicly traded stock that made for a good story until it wasn’t. Along the way, the company added more design-driven merchandise, deploying its design center located in the heart of NYC. Kohl’s became omnichannel, as all good retailers must. (Read this report on the retail industry.) Kohl’s. Macy’s. JC Penny. Is there a difference? How can you win in an environment of too much retail for a…

A winning membership business model

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The woman wore brown leather hot pants, a beige silk blouse, dangly earrings and over-the-knee black heeled boots. Thankfully, she was thin. Her partner, also in his late 20s, wore grungy jeans and an expensive leather jacket whose collar hit his rock-star-length locks. Next to them was an elderly Hispanic grandmother trying to keep tabs on three grade-schoolers, most likely children of her working daughter or son. An elderly blond women, her face the work of a terrific plastic surgeon, stood comfortably in very high-heeled shoes. Her Channel sunglasses matched the color of her Fendi handbag. Added to the mix was a teenage male covered in tattoos, wearing black flannel Turkish pants and a sleeveless matching top, despite the 72-degree weather. Each shopper’s cart was brimming, all with very different mixes of merchandise and groceries. Welcome to Costco where you feel you are…

The Reality TV Show every CEO should envision

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You have been imprisoned twice for a total of 8 years for non-violent offenses, both incarcerations related to drug use, drug sales, and property theft. You are off drugs now. You had no legal employment prior to your first imprisonment, but landed a job when you left prison in 2008; unfortunately you were laid off in 2009 as the economy worsened. Unemployed, you succumbed to drugs again and committed the same crimes. You got your GED the second time in prison. A few gang-related tattoos are visible above your shirt collar, and there’s a scar on your face, the result of a prison fight that you did not cause. With a young child at home and a woman you love, you are determined to follow a different path this time.  Your body and voice are strong, but your grammar is weak. You have…

Lessons for leaders from NBC’s newsroom fiasco

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Stars and companies fall from grace. Because of the public hanging, the fall is never pretty. And it’s far easier to explain what happened in hindsight than predict with foresight. Still, looking backward is how we learn our lessons. So here’s my take on NBC’s shocking change in fortune. Breaking your brand promise destroys trust. News anchors must convey the objectivity, rationality, and truthfulness their viewers demand. CBS’s Walter Cronkite is the gold standard. When your chief newsman appears on late night shows and tries to be funny or raises his hand to be Jay Leno’s replacement—as Williams did—you have a potential branding issue to manage proactively. Restlessness places brand promises at risk. Restlessness emerges when the status quo produces a feeling or reality of stagnation. John Stewart is exiting the Daily Show as he felt his viewers did not deserve a host…

The public goods nature of cyber-security

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Doomed. That word was my conclusion leaving a recent San Diego event on cyber-security. My city is exceptionally well organized around this topic, which makes my feeling all the more compelling. We have a non-profit to advance awareness, education, and preparation. A collaborative center for researchers exists. An economic cluster for cyber-security and the Internet of Things has been organized to attract money, established companies and talent to San Diego to further strengthen our security. And still another group is solving the workplace shortage of security experts. We are building a community more secure from a cyber attack of significant impact than most other cities. But listening to the speakers at the symposium, I observed a passionate group of do-gooders holding their fingers in an increasingly fragile dike. One speaker captured our reality in a single sentence, “It will take one huge crisis…

Apple Watch newest “watching industry” entry

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First, let me admit my bias. I wear a gorgeous 14k gold Swiss watch everywhere but in the water. The thought of replacing it with an Apple Watch would, for me, feel like replacing a great dinner with brightly colored and beautifully shaped nutritional tablets. Was that why Apple’s share price failed to rise following Apple Watch’s debut today? Still, the Apple Watch may find a great market if we shake off the history of “the watch,” a noun denoting a time-telling device, and avoid viewing it as a wrist smart phone. Instead, let’s think about the new entrant as a “situational mobile solution for watching” (the verb). What are some of the situations in which an Apple Watch could provide significant customer value? Exercise. I carry my iPhone when I run to track my miles, speed, elevations, etc. I would welcome a…

Would Checker Cab becoming UBER have been a good thing?

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Let’s work backwards. Take Checker Cab, Michigan’s largest cab company and the only one to cover all 147 square miles of Detroit.  After a strategic planning retreat, the owners, now calling the company Checkmate, decide to: Replace dispatch units and meters with an internet-based platform that manages fee calculation and customer billing and provides a faster and more consumer-friendly matching of drivers with riders. Change the pricing model to enable the company to earn excessive premiums in peak traffic. Eliminate its extensive driver training focused on defensive driving and driver and passenger safety. Lower its renowned standard for driver background checks. Sell rather than rent its fleet of cabs to drivers, so it no longer needs to pay insurance. Create a process to make sure drivers are insured. Whether individual owners’ insurance covers cars used for commercial purposes is unclear, but hey, that’s…

Medtronic avoids BlackBerry’s business model mistakes

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Once a mobile phone leader, BlackBerry will pass from irrelevancy to bankruptcy absent an outside purchaser. Medtronic will wisely avoid this fate if it transforms its culture and business models following its recent acquisition of disease management and patient monitoring company CardioCom. Whereas BlackBerry missed the technology shift that required phones to provide mobile photography, music, and computing —not just calls and emails — Medtronic appears to understand it’s engine needs rebuilding. By further exploiting all the data collected by its chronic care devices (such as pacemakers and insulin pumps) and serving the chronically ill before they need devices, Medtronic can do more to improve health and lower its costs. Indeed, the medical device leader’s recent creation of a business model innovation center in Singapore demonstrates that the company knows that devices alone can no longer fuel its growth. Much as Caterpillar earth…

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