If you haven’t been following McDonalds you should be. Let’s take a look at that Big Maccer, shall we?
As you can see, McDonalds stock price has been steadily inching higher and higher though the revenue has not been cooperating. Hello, America!
I have never rented anything from Rent the Runway, the unicorn women’s “unlimited closet in the cloud” fashion site, your secret door to the latest in the rag trade.
You can rent clothing by the one off, on a subscription basis, and buy the clothes at a discounted post-rental price. They send you (gratis) a second size to make sure you can fit into their clothes. It is a first rate business.
Though I have never rented a dress (don’t carry the right size for Big Red Cars), I have always loved the business concept, their financial model, their innovative business development, their founder story, and their web site.
The company was founded by a couple of Harvard MBA women in 2009 — Jenny Fleiss and Jenn Hyman (bit of irony, no? couple of “Jens”). It is a profitable unicorn.
However, if today you go to their website, you will find the following message:
Currently all one-time Reserve rentals must be scheduled for delivery after 10/15.
Thanks for your patience as we upgrade our system!
Imagine the conversations within the company that resulted in that sentence appearing on the website. In addition, the company is not taking any new “members” for any of their programs.
In essence, the unlimited closet in the cloud is out of business for 2-3 weeks. Closed for tech remodeling! Never saw that happening!
How does a company weather a 2-3 week unannounced cessation of their business when they are an immediate gratification B2C, cutting edge fashion business?
Since time immemorial, American business has always revered the iconic startup leader whether it was John Davison Rockefeller, Sr — American business icon, considered the wealthiest American of all time, and a generous philanthropist; or, the Steve Jobs, Jeff Bezos, Bill Gates stories. Sam Walton was an iconic, successful businessman.
All have a “larger than life” nature to them. They fall into the category of the iconic American business billionaire. These folks, however, come with a full bag of positive and negative traits.
In the modern startup world, we have folks like Travis Kalanik, formerly of Uber, and, now Adam Neumann, of We (We Work).
What we are confronted with is the “cult of personality” wherein the business becomes synonymous with the leader or founder.
This can be good or bad.
In the case of Sam Walton, it is generally perceived as a positive thing. Folksy Old Sam was a gimme-cap-wearing, pickup-driving, Easy-Rider-rifle-rack-shotgun-owner, bird-hunting, bird-dog-loving man of the people from the heartland.
Walmart HQ never left Bentonville, Arkansas, and Bentonville never left Sam.
Sam Walton and his pickup truck at the beginning:
The story of how Vintage Capital Management, a private equity firm, “forgot” to send a letter that cost them $92.5MM makes YOUR story about what happened when you forgot the 2% organic milk sound petty and minuscule by comparison. Allow me to expound on this.
You’re at your weekly writer’s critique group reading, critiquing, making pithy comments, and you receive a text from your beloved.
“Can you please pick up some milk on the way home? We’re out. Thank you, sweetie.”
You read the text and dismiss it, well, because you were getting a critique on your latest literary masterpiece and that understandably consumes your entire bandwidth.
When you get home, your beloved asks, “Did you get the milk?”
[Seeing you empty handed, she does not use the nominative of address of “dumbass” because she is a Southern woman of considerable breeding and refinement. But, let’s admit it — she is tempted.]
“What milk?” you reply, as you slap your forehead, thereby dislodging and rebooting your brain.
Though it is ten in the PM and you desperately want to watch the latest Jack Ryan episode, you hop into your SUV, drive to the half-mile away, all-night grocery (listening to the Bruce Springsteen E Street Band Sirius channel), and pick up a gallon of two percent, organic milk. You do not buy any other kind of milk because in your household “milk” means two percent, organic.
That is what happens when you inadvertently “forget” to do something.
If you have been off the ‘net, you may not have heard, but We (We Work) is trying to float a public issuance of its stock. Your Big Red Car wrote about it here.
Back in the middle of August when that was written, several pithy criticisms of the deal were made. Since then, We (We Work) has gotten some sense beaten into its dopey head and backtracked on the most egregious offenses against common sense and humanity.
Is it enough? is it enough? Is it enough? No. No, a thousand times NO!
Yesterday marks the day when American capitalism took a crack at being “woke” when the Business Roundtable redefined the role of the American corporation in the “new” America we live in today.
In the past (1997), the Business Roundtable thought “…the paramount duty of management and boards is to the corporation’s shareholders…”
Makes sense, no? The shareholders own the company, right? Not so fast, amigo. Not so damn fast.
If you are a student of such things, you will enjoy reading the view of the world from 1997. It is here:
It is worth noting that the “shareholders” are not a social club; they own the companies of which these CEOs are the leaders and managers.
The food chain looks like this:
1. Shareholders — the owners — of companies elect the Board of Directors.
2. The Board of Directors engages the management of the company — the Chief Executive Officer being the primary hire of the Board.
3. The Chief Executive Officer assembles the balance of the management of the company subject to the concurrence of the Board.
4. The CEO and the management run the company subject to Board oversight.
This is a legal construct as well as a practical structure.
In this instance, the Business Roundtable is populated by CEOs. The CEOs of the Business Roundtable did not ask permission of their boards or their owners to rediscover the purpose of corporations. They acted on their own.
The initiative was introduced by Jamie Dimon, Chairman of the Business Roundtable and Chairman and CEO of JPMorgan Chase & Co.
As a leader, it is imperative that the company you build and lead is energized from within by taking a moment to celebrate victories. In history, this is called “counting coups.”
The other day I was advising a client and we got to the issue of rewarding accomplishments and behavior.
“Why is this important?” the brilliant CEO asked.
“Because you will get more of whatever behavior your recognize and reward. Reward good performance — more good performance,” said your Big Red Car.
We wandered into a discussion as to how the military did it with a formal awards program wherein an individual was formally recognized by having their exploit written up, memorialized in a citation, and symbolized by a bit of colored ribbon they would wear on their uniform forever. These awards in the military are given in front of one’s unit often at a parade. It is very public moment.
One of my platoon sergeants when I was a young lieutenant had been awarded a DSC. Every payday we wore our green uniforms with ribbons. Every payday I would have him tell the story of how he won the Distinguished Service Cross to my platoon. We were counting coups.
A professional recruiter who I have advised — real pro — put up an article on Twitter that caught my interest. It discusses the essence of recruitment failures and why they happen. It takes a long time to get to the nub of things, but it is filled with wisdom.
I had also been building a file to write about this and they both came together at the same time. I take an earthier view of things having been in hiring mode for more than three decades.
I have always maintained that a good CEO is always recruiting and that recruitment is a seduction — meaning you want to create a reaction in the target that they want to work at your company rather than you need them to fill a job. Perhaps, overly subtle, but it is the way I think and I always had good luck in hiring.
Here’s a hiring challenge for you.
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