Layoffs at General Mills and lessons from Minnesota’s Fortune 500 companies
General Mills, one of Minnesota’s first Fortune 500 companies, announced Tuesday that it is eliminating 850 jobs, with about half of the losses in the Twin Cities.
The cuts are related to struggles in the U.S. food industry, and General Mills says it is restructuring to “accelerate administrative efficiencies across the company.” But the news raises bigger questions about the state of Minnesota’s Fortune 500 companies and whether we should be alarmed.
A look back at Minnesota’s Fortune 500 companies helps put the layoffs in a larger context. This history reveals that companies come and go — and offers some lessons on public policy.
Read the full article at Minn Post.
How Spam Meat Has Survived Spam E-Mail
At Hormel (HRL) corporate headquarters in Austin, Minn., they call it “unwanted e-mail,” never spam. It’s been a sore subject ever since the mid-’90s, when chat-room users first flooded computer screens with the word “spam” to blot out the comments of users they didn’t like. Wikipedia gives the example of Star Wars fans “spamming” Star Trek chat rooms. The word was chosen because of the famous Monty Python sketch in which every item on a restaurant’s menu includes Spam, Hormel’s canned, spiced lunchmeat. The skit was a back-handed compliment, a tribute to Spam’s success at monopolizing the British diet.
By the late ’90s, spam had migrated from Internet chat rooms to in-boxes as a term of art for junk e-mail, becoming synonymous with erectile dysfunction ads and entreaties from fake Nigerian princes, and presenting Hormel with the greatest marketing challenge in its 75-year history. “We had something negative that was trading on our brand equity, on our name,” says Dan Goldman, Hormel’s grocery products manager. “You have to protect what’s yours.”
Companies have long had to contend with damage to their brand image from mistakes of their own, such as poor design (Toyota’s (TM) allegedly lethal floor mats), the mishandling of a minor crisis (JetBlue’s (JBLU) disastrous response to the ice storm of 2007), or collateral damage from behavior out of their control (Tiger Woods, Brand Ambassador). There is no playbook or case study, however, for what to do when your flagship product takes on a negative meaning in another larger and global context. In 2002, Hormel attempted to assert its trademark rights against Spam Arrest, a software company, Spam Buster, an e-mail blocker, and Spam Cube, an Internet security firm, but no dice. Hormel even sued Jim Henson Productions for naming a warthog character “Spa’am” in Muppet Treasure Island. The judge dismissed the suit, noting, “One might think Hormel would welcome the association with a genuine source of pork.” Powerless to stop the widely accepted usage, the company watched helplessly as “spam” entered the Oxford English Dictionary in 2001 not as a pork product but as unsolicited messages. Hormel mournfully admitted on its own website that, “we are trying to avoid the day when the consuming public asks, ‘why would Hormel foods name its product after junk e-mail?’”
It’s hard to imagine a brand surviving that kind of association, and yet a strange thing happened: Spam has not only survived, it’s thrived. Hormel sold 122 million cans of Spam last year, an increase of 11 percent over 2009, continuing a string of three consecutive years of strong growth. Company executives attribute the resurgence to the recession (which drew consumers to the affordable lunchmeat), a tireless parade of brand extensions, and, crucially, a willingness to be in on the joke that Spam had become.
“We decided we should celebrate Spam,” says James Splinter, a vice president in the group products division. In addition to fending off the negative association with unwanted e-mail, Splinter says, Hormel looked on sagging sales in the ’90s as an indicator that Spam had become too familiar. “Spam is woven into the fabric of America,” he beams, but it needed to stand out again. “Spam is something bigger than food. It also has cravable flavor.” (“Cravable flavor” is an expression you hear a lot around Hormel headquarters.)
Geo. A. Hormel & Co. canned the first ham in 1926. Hormel’s hams became popular among hotels and restaurants but the cans were considered too bulky to break into the home market. Eleven years later, Jay C. Hormel, the founder’s son, devised a solution: a rectangular, 12-ounce can of ham and shoulder meat named, by the brother of one of his VPs, Spam, short for SPiced hAM. The original cans were labeled “The Meat of Many Uses” and at 10¢ each were an immediate hit with depression-era families. The product became an institution during World War II, when the almost indestructible square cans were a staple of U.S. servicemen who also introduced the product to hungry foreign markets. Today, Hormel processes nearly 20,000 pigs a day. Spam is canned before it’s cooked in a 70-foot-tall cylindrical oven, which towers over the town of Austin, where Hormel is by far the largest employer.
In the last 20 years, Hormel has made at least five national marketing pushes, leading to the current “Break the Monotony” campaign, featuring a TV spot where anthropomorphic slices of bread doze off at a “bored” room presentation—until the doors burst open, flames erupt, and a can of Spam slides across the table. The voice-over proclaims, “for a sandwich that rocks, try a Spam, lettuce, and tomato.” Splinter explains, “I think of it like Old Spice: It’s gone from dad’s brand to a hip young brand.”
The company sponsored the NFL and Nascar, and Spam was used as part of the “Got Milk?” campaign. Yet the watershed moment in Spam’s transformation came in 2005, when Hormel joined in the promotion of the Tony-winning Broadway musical Spamalot, written by Monty Python’s Eric Idle. “We realized we need to have fun with the brand, since everyone else was,” says brand manager Nicole Behne. Steven Addis of Addis Cresson, a brand strategy and design firm, says that embracing its status as a punch line was the key to Spam’s comeback. “They learned that they couldn’t fight it,” he says. “They needed to see it as a gift.” Daniel Altman of branding company A Hundred Monkeys in Mill Valley, Calif., agrees. Hormel pulled off “a judo move,” he says. “They took that issue”—of unwanted e-mail—“and turned it to their advantage.”
This newfound sense of humor has begun making its way into the dizzying number of brand extensions Spam introduced in the last two decades, including nine new varieties of its lunchmeat. Released in 2006 to coincide with Spamalot, “Spam Stinky French Garlic Collector’s Edition” came decorated with nose-pinching knights and the following tongue-in-cheek note: “Actually made in Denmark with Chinese Garlic.”
The brand has also expanded beyond grocery store shelves. In 2001, Hormel opened the Spam Museum, which has become the leading tourist attraction in Austin. It presents a revisionist account of the 20th century, recasting the American journey as, essentially, the history of canned meat. (Spam ends the Great Depression. Spam wins World War II. Spam goes to outer space.) A year later, Spam launched the first annual Spam Jam festivals, complete with the Spamettes singing group, in Minnesota and Hawaii—the state with the highest per capita consumption of Spam.
As Hormel celebrates this year’s 75th anniversary, it’s introduced a new Spam spokes-character, Sir Can-A-Lot, a lozenge-shaped knight “on a crusade to rescue meals from the routine,” and two limited-time Spam variations, jalapeño and black pepper. Hormel’s strategists are also doing their best to speak the language of social media rather than hold a grudge. “Spam is sort of like Facebook,” suggests Scott Aakre, vice president of grocery products. “There are friends you talk to every day, and those you talk to only once in a while. Well, you have consumers who have friended Spam. Some use it every day, others once in a while. But this is an old friend who is going to be around for a while.”
Source BusinessWeek
Why Apple builds iPhones (and everything else) in China
When President Obama famously dined with a handful of Silicon Valley titans a year ago, he had a question for Apple chief Steve Jobs, say Charles Duhigg and Keith Bradsher in The New York Times: What would it take to make iPhones in the United States? Jobs’ answer was unambiguous and sobering: “Those jobs aren’t coming back.” Now, in a lengthy story, Duhigg and Bradsher explain — based on conversations with executives at Apple and its tech rivals, economists, and government officials — why Apple and just about every player in the consumer-electronics universe has all but given up on “Made in the USA.” Here, a concise look at the secret to China’s success:
What does China have that America lacks?
Quite a lot. China has more mid-level engineers, a more flexible workforce, and gigantic factories that can ramp up production at the drop of a hat. China also offers tech firms a one-stop solution. “The entire supply chain is in China now,” a former high-ranking Apple executive tells The Times. “You need a thousand rubber gaskets? That’s the factory next door. You need a million screws? That factory is a block away. You need that screw made a little bit different? It will take three hours.”
It’s not just about cheaper wages?
No. Wages actually aren’t that big a part of the cost of making consumer electronics, according to The Times. Paying American wages to build iPhones would add only about $65 to the retail price of each handset, according to analysts’ estimates. That’s an amount Apple could likely afford. And in fact, China no longer offers rock-bottom wages. But when it did, it used that window “to innovate the entire way supply chains work,” says Sarah Lacy at PandoDaily. China is now “a place other countries can beat on sheer cost, but not on speed, flexibility, and know-how.”
What does China’s competitive edge look like in practice?
One example from The Times article: When Jobs decided just a month before the iPhone hit markets to replace a scratch-prone plastic screen with a glass one, a Foxconn factory in China woke up about 8,000 workers when the glass screens arrived at midnight, and the workers were assembling 10,000 iPhones a day within 96 hours. Another example: Apple had originally estimated that it would take nine months to hire the 8,700 qualified industrial engineers needed to oversee production of the iPhone; in China, it took 15 days. Anecdotes like that leave you “feeling almost impressed by the no-holds-barred capabilities of these manufacturing plants,” says Edward Moyer at CNET News, “impressed and queasy at the same time.”
Is there anything the U.S. can do to bring these jobs back?
At the Silicon Valley dinner, some tech executives suggested that a “tax holiday” on foreign profits would allow their companies to repatriate money to create jobs at home. Such a tax break would save Apple about $8.2 billion, says Philip Elmer-DeWitt at Fortune. “That’s a lot of lettuce.” Jobs also suggested at the dinner that Apple could bring some skilled manufacturing jobs to the U.S. if the government helped train a new cadre of engineers.
Was Steve Jobs generally down on America?
No. Apple has actually added quite a few jobs here in the U.S., even as it outsources more of its labor overseas. And at the end of the Silicon Valley dinner, Jobs reportedly told Obama that he’s “not worried about the country’s long-term future” because the U.S. “is insanely great.”
Source: The Week
On Diaspora’s Social Network, You Own Your Data
Sitting along Yankee Stadium’s third base line during New York University’s rainy graduation two years ago, Max Salzberg couldn’t focus. The phone in his pocket wouldn’t stop buzzing. With each notification, the NYU senior wiped water off the screen to read an e-mail saying yet another person had given money to Diaspora, the not-yet-even-a-startup he and three college buddies had hatched the month before. Buzz. Another donation. Another buzz. Over the course of the ceremony, Salzberg and his co-founders raised more than $10,000. Over the course of the day, $40,000 more.
A few weeks earlier, Salzberg and three friends from the computer science club—Daniel Grippi, Raphael Sofaer, and Ilya Zhitomirskiy—had posted a rambling three-minute video on the crowdfunding site Kickstarter. They wanted to raise $10,000 to create a new kind of social network, one that lets people, not companies, own their personal data. They were young. They thought it would take the summer.
he four had sent the link to friends and got their first donation from their faculty adviser. Several well-known open Internet advocates tweeted about the campaign, and in 12 days, the Diaspora guys had their 10 grand. And the money kept coming. A New York Times reporter called them for a midnight interview; an early morning photo shoot followed. Then, on the day before the May commencement, the four undergrads found themselves atop the Times home page. “It just blew up like crazy,” Grippi says.
Their timing was perfect. Facebook had just changed its privacy policy, telling members it would track personal data to third-party websites. There was an outcry from users alarmed that it could track them beyond their personal pages. Facebook had changed its privacy policy half a dozen times, each alteration a reminder of the grand bargain users have made with the world’s most popular social network. It lets them keep tabs on long-lost classmates, share vacation photos, and feel connected, all at no cost. In exchange, their profiles aren’t really theirs—every bit is owned by the company and used for its profit. To connect on Facebook, users have no choice but to consent to its policies, and on the eve of Facebook’s nearly $100 billion initial public offering, the commercial value of that choice is all the more clear: In 2011 the company earned $5.11 per user, primarily by serving up targeted ads. Nine hundred million people have implicitly decided that the trade-off is worth it.
Diaspora aimed to convince consumers otherwise. The founders envisioned a site that would function like a social network but would give users ownership of their data, taking exploitation out of the equation. You could store what you post on any server you want and then share it, delete it, or use it however you choose.
Read the rest of the article at businessweek.com
Sen. McCain: US slow to seek trade pacts in Asia
Republican Sen. John McCain called for the Obama administration to ramp up its free trade agenda in Asia and suspend U.S. economic sanctions on Myanmar, although retain an arms embargo.
Describing the administration’s record on trade as “shameful,” McCain said Monday the U.S. has been “sitting on the sidelines” while China has moved swiftly to secure free trade agreements in Asia and Latin America.
He said the U.S. was negotiating too slowly on the Trans-Pacific Partnership, or TPP — a trade pact with eight other nations — and should seek bilateral pacts with Taiwan and India.
“The bottom line is that America’s long-term strategic and economic success requires an ambitious trade strategy in Asia,” McCain, R-Ariz., said in a speech on U.S. policy toward Asia at the Center for Strategic and International Studies in Washington.
ast year, the U.S. finalized trade pacts with South Korea, Colombia and Panama initiated under Obama’s predecessor, President George W. Bush. Obama has made the TPP the main plank of his trade agenda going forward and has said the U.S. wants to complete an agreement this year — a goal that many analysts view as unrealistic.
U.S., Australia, Malaysia, Vietnam and Peru are currently negotiating to join the pact, which already brings together the smaller economies of Chile, New Zealand, Brunei and Singapore.
McCain said the U.S. needs to bring other Southeast Asian countries into the TPP, or push for a formal trade agreement with the 10-member Association of Southeast Asian nations.
Read more here.
4 Mobile Business Applications to Watch
1. BoardVantage
BoardVantage is a collaboration app for boards of directors at large companies. It is programmed with extensive security policies and allows a board meeting to take place entirely on an iPad, which stores all related important information in an IT-secure application. The app is a must for CIOs who want to transform their company so that instead of the C-suite using laptops, they are all armed with iPads. Although it’s free to download, it requires a subscription to use.
2. IBM bCase
IBM’s bCase for IBM Business Partners helps businesses create amazing sales presentations on an iPad. Ed Abrams, vice president of marketing for IBM Midmarket, says the app is highly dynamic and can pull in content from a wide variety of sources, allowing for a much more vibrant experience than you get from, say, Microsoft PowerPoint. It’s free to download, but requires a password issued by IBM.
3. The Merck Manual
The 100-year-old manual’s content has been transferred from book to iPad in both a home and professional edition. The app can be accessed anywhere via wi-fi and allows doctors to find symptom information for patients and email a relevant link to either the patient or a patient’s specialist. Robert S. Porter MD, an editor of the app, said, “The Manual has always been highly regarded for its clarity and focus on delivering just the right amount of information. This app for iPad, iPhone and iPod touch now provides that information in a convenient form that will make it even more valuable for healthcare professionals on the go.”
4. Cisco WebEx
This application allows anyone to join a web conference from an iPad or iPhone. Any number of people can attend these meetings, but a WebEx host account is needed to schedule or host a meeting. The app also allows one to attend a meeting from anywhere in the world and present PowerPoint presentations. It makes the possibility of conferencing from anywhere very simple.
Source: Mashable.
Ainsley Shea China: U.S. promises high-tech exports to China →
Summary: The United States has more than 2,400 restrictions on exporting high technologies to China and had a $295.5 billion USD trade deficit to China in 2011, up 8.2 percent from 2010.
U.S. Treasury Secretary Timothy Geithner has pledged that the U.S. would soon take substantial…
8 Core Beliefs of Extraordinary Bosses
Via Inc.com
1. Business is an ecosystem, not a battlefield.
Average bosses see business as a conflict between companies, departments and groups. They build huge armies of “troops” to order about, demonize competitors as “enemies,” and treat customers as “territory” to be conquered.
Extraordinary bosses see business as a symbiosis where the most diverse firm is most likely to survive and thrive. They naturally create teams that adapt easily to new markets and can quickly form partnerships with other companies, customers … and even competitors.
2. A company is a community, not a machine.
Average bosses consider their company to be a machine with employees as cogs. They create rigid structures with rigid rules and then try to maintain control by “pulling levers” and “steering the ship.”
Extraordinary bosses see their company as a collection of individual hopes and dreams, all connected to a higher purpose. They inspire employees to dedicate themselves to the success of their peers and therefore to the community–and company–at large.
3. Management is service, not control.
Average bosses want employees to do exactly what they’re told. They’re hyper-aware of anything that smacks of insubordination and create environments where individual initiative is squelched by the “wait and see what the boss says” mentality.
Extraordinary bosses set a general direction and then commit themselves to obtaining the resources that their employees need to get the job done. They push decision making downward, allowing teams form their own rules and intervening only in emergencies.
4. My employees are my peers, not my children.
Average bosses see employees as inferior, immature beings who simply can’t be trusted if not overseen by a patriarchal management. Employees take their cues from this attitude, expend energy on looking busy and covering their behinds.
Extraordinary bosses treat every employee as if he or she were the most important person in the firm. Excellence is expected everywhere, from the loading dock to the boardroom. As a result, employees at all levels take charge of their own destinies.
5. Motivation comes from vision, not from fear.
Average bosses see fear—of getting fired, of ridicule, of loss of privilege—as a crucial way to motivate people. As a result, employees and managers alike become paralyzed and unable to make risky decisions.
Extraordinary bosses inspire people to see a better future and how they’ll be a part of it. As a result, employees work harder because they believe in the organization’s goals, truly enjoy what they’re doing and (of course) know they’ll share in the rewards.
6. Change equals growth, not pain.
Average bosses see change as both complicated and threatening, something to be endured only when a firm is in desperate shape. They subconsciously torpedo change … until it’s too late.
Extraordinary bosses see change as an inevitable part of life. While they don’t value change for its own sake, they know that success is only possible if employees and organization embrace new ideas and new ways of doing business.
7. Technology offers empowerment, not automation.
Average bosses adhere to the old IT-centric view that technology is primarily a way to strengthen management control and increase predictability. They install centralized computer systems that dehumanize and antagonize employees.
Extraordinary bosses see technology as a way to free human beings to be creative and to build better relationships. They adapt their back-office systems to the tools, like smartphones and tablets, that people actually want to use.
8. Work should be fun, not mere toil.
Average bosses buy into the notion that work is, at best, a necessary evil. They fully expect employees to resent having to work, and therefore tend to subconsciously define themselves as oppressors and their employees as victims. Everyone then behaves accordingly.
Extraordinary bosses see work as something that should be inherently enjoyable–and believe therefore that the most important job of manager is, as far as possible, to put people in jobs that can and will make them truly happy.
