Photo courtesy of Starbucks

by Jim Donald, former CEO of Starbucks and Pathmark

“Good morning, general store managers, assistant store managers, VPs and all 26,000 employees…Jim here…

It’s Wednesday morning and the merchandising message today is–and you are not going to believe it– but I am telling you that it is OK to steal.”

It was 5:30 a.m., and I was on the phone, in my kitchen, sending out my daily voicemail. As I paused for effect, I was thinking that the supermarket industry has one of the strictest employee honesty codes in the world.  Because of the large number of employees, the vast number of items and the low profit margins, it’s an absolute necessity to have zero tolerance for employee theft. I hadn’t informed my senior team that I would be sending out this message…hmm…better think about how to handle that one…

“You heard correctly…despite what you might think about controlling losses and theft, I am saying to all of our associates, it’s now time to start stealing…stealing market share, that is.“

Call it hokey, but this is how I needed to deliver my message to my 26,000 associates. I wanted to convey that the power of the company comes associate by associate, item by item… and it’s up to them to translate that power into sales. So I finished my broadcast this way:

“That’s my message for today…it’s OK to steal…steal market share, that is. Thanks, and I’ll talk to you tomorrow.”

That’s how I communicated though a crisis almost a decade ago when I was CEO of Pathmark Supermarkets. The economic crisis back then wasn’t as bad as today’s. But Pathmark was barely hanging on, just like a lot of companies now. Once the giant grocery chain in the New York metro area, it was one the longest living LBOs from the 1980s and still strapped with $1.6 billion in loans and junk bonds. Employee morale was at an all-time low. It was no longer a price leader. And our suppliers worried that we wouldn’t be able pay the bills.

I learned a lot at Pathmark—and during my time at Albertsons, Safeway, Wal-Mart (WMT) and Starbucks (SBUX), where I was the CEO until January of last year. Since I have some experience in crisis and now I have some distance, too, let me share just a few ideas with you:

Communicate, communicate, communicate. Especially at a time of crisis, make sure your message reaches all levels, from the very lowest to the uppermost. When Pathmark was in dire straits, I began to send out my daily message to all employees. Make sure too that you give them an opportunity to reply.

Reach deep for answers. Sam Walton once said to me, “Jim, if you ever want to know what is troubling your business, ask your front-line employees. They know, and they will tell you.” It’s true, your people on the front line are your real marketing experts. Take advantage of the fact that they’re closest to your customer everyday.

Beware the success trap. Success breeds risk aversion. And what happens when we become risk averse? We stop innovating. And we lose our best people because they become restless and even bored. Various studies by McKinsey and others lists three things that employees want from a company today: an open and honest work environment, the opportunity to be stretched and valued, and the ability to make decisions. Especially today, when so many companies are frozen by risk aversion, giving your people freedom to fail could be your competitive advantage. Complete Story….

Guest Post: Former Starbucks CEO’s tips for tough times – Postcards.

CHRIS PALADINO, a Microsoft employee who was hired in 2006, didn’t worry too much about his job when the economy began to sour last fall. The company employs nearly 90,000 people.

“I thought Microsoft was so stable, it wouldn’t be touched,” he said. Now, as one of the 1,400 employees who received layoff notices in January, Mr. Paladino is worried — about making the mortgage payments on his home.

Mr. Paladino gathered user feedback for the Xbox games division of Microsoft. This month he started his own consulting company, Promethium Marketing, with two colleagues who were also laid off.

But, “I would never have chosen to leave Microsoft,” he said. “I had a great job. I worked with a great team.”

Leaving the company has not always been so traumatic. Microsoft has a long history of making employees part-owners of the company, by granting them stock and stock options.

From executive to secretary, many employees received thousands of stock options. Microsoft’s stock price rose from about $2.50 a share in 1992 to almost $60 in 1999, and roughly 10,000 of those employees became millionaires.

When employees left the company in those days, it was overwhelmingly by their own choice. They were off to a new adventure, starting a business or a charity, or just planning to have fun, said Rob Horwitz, the chief executive of Directions on Microsoft, an information technology analyst firm that has been tracking the company for 17 years.

Notable alumni from that time rebuilt the Professional Bowlers Association; created the charity Room to Read, which builds schools in poor countries; and founded the Cranium game company (which was sold to Hasbro).

Other Microsoft alumni started venture capital firms or followed more personal dreams, creating enterprises like the Cameron Catering Company of Seattle, which focuses on green events, or the Casa Cupula, a bed-and-breakfast for gay travelers in Puerto Vallarta, Mexico. One alumnus built his own airplane and another rode along with Russian cosmonauts on a space mission. The sky was literally the limit.

The economy has changed all that. With Microsoft’s stock price now below $20 a share, any stock options granted in the last 10 years have little to no value, and the outright stock grants have lost value.

So rather than leaving on their own terms for a new adventure, some recently separated employees are now looking for any professional job they can get. (Microsoft declined to comment for this article.)

Read More…

A New Crop of Job Hunters, With Microsoft Résumés – NYTimes.com.

So many readers have emailed me to warn that we are going into another Great Depression that I decided to find out which companies and sectors did best after the Crash of 1929. With the Standard & Poor’s 500-stock index down 39% last year and another 8.5% this year, it can’t hurt to learn what separated the winners from the losers back then.

Heath Hinegardner

The good news is that some stocks and industries did indeed do much better than average. The bad news is that the average was ghastly, and even the best stocks had three rotten years in a row.

With the help of the Center for Research in Security Prices, or CRSP, at the University of Chicago’s Booth School of Business, I sought to answer this question: If you had invested on Jan. 1, 1930, after the crash already had destroyed a third of the stock market’s value, where would you have gotten the greatest gains?

The short answer: In 1930, 1931 and 1932, nowhere. There was no real refuge in the storm; even Benjamin Graham, the great value investor, lost 60% over those three years.

According to CRSP, only one industry had positive returns from 1930 through 1932: logging. The two stocks in that tiny sector, Diamond Match and Mengel Co., whittled out a cumulative gain of 40% for the three-year period. Diamond turned timber into matchsticks; Mengel made trees into packing materials, primarily for daily necessities like tobacco and soap.

To find a major sector with significantly positive returns, CRSP needed to stretch our measurement period into a fourth year, 1933, when the market finally rebounded partway from its earlier losses by rising a record 54%. Even then, out of 120 industries, only 13 managed to generate gains from 1930 through 1933.

The only clear winner: cheap vices. Among the sectors with positive returns were cigarettes, cigars and tobacco, sugar and confectionery products, and fats and oils, which each gained between 1.6% and 7.5% annually. Those gains were better than they look, because deflation raised their purchasing power by an annual average of more than 6% over this period. It seems there was good money to be made investing in guilty pleasures that people could afford even in the hardest of times: sweets, smokes and fried food.

Complete article at:

1930s Lessons: Stocks for After a Crash – WSJ.com.

Thanks to its open-ended design and a thriving user community, Twitter is fast outgrowing its roots as a simple, easy-to-use messaging service. Enterprising hackers are creating apps for sharing music and videos, to help you quit smoking and lose weight — spontaneously extending the text-based service into one of the web’s most fertile (and least likely) application platforms.

Hardware hackers have set up household appliances to send status alerts over Twitter, like a washing machine that tweets when the spin cycle is through, or a home security system that tweets whenever it senses movement inside the house. Others have incorporated Twitter into their DIY home automation systems. Forgot to turn off the lights? Send a tweet to flip the switch by remote control.

“It’s so simple and easy to access, people are thinking of more and more uses for the platform,” says Dan Wasyluk, creator of the Twitter-based Snipt service. Wasyluk launched Snipt last week as a way to let programmers share short snippets of code over Twitter.

Launched in 2007, Twitter quickly became a darling of the life-and mind-casting interneterati. But some saw boundless possibilities in the 140-character limit, and what was a slow trickle of innovation is now quickly elevating what is essentially a micro-blogging service into one of the internet’s most important technologies, along with instant messaging and e-mail.

Though it’s main use — sending and receiving short messages to your social network — is often dismissed as time-wasting trivia, Twitter’s potential as a broad internet platform is just beginning to be fully realized. Twitter has grown into a ubiquitous presence — you can send tweets from your phone, your desktop and your browser — that has potential to not only facilitate communication among humans, but even to make machines do your bidding.

Businesses are starting to be built around it. Botanicalls, for example, sells a Twitter-enabled hardware kit that lets your neglected house plants alert you when they’re thirsty.

The company has developed a tiny moisture sensor attached to a circuit board with an Ethernet port. You stick it in your plant’s soil, and when the moisture levels drop below a certain level, your plant sends you a tweet begging to be watered.

Using Twitter’s application programming interface (API), a programmer with even a modest amount of experience can create a web app that gathers public data from Twitter, or uses it to send links, commands or bursts of information.

“[Twitter's] open API is a huge reason it has grown into such a platform,” says Wasyluk.

File sharers were the first to rush in. The photo-sharing service TwitPic, one of the oldest Twitter mashups, lets users send pictures to their followers by storing a photo on its servers, then passing the link around on Twitter. Now there are newer apps like Tweetcube and Twittershare, which let users share larger media like MP3s and videos.

Twitter’s limited format of short, text-based announcements are a natural match for sites like TrackThis, which you can use to get status updates on FedEx and UPS packages, and Tweetajob, which job seekers can use to get real-time updates about new job openings.

Anyone who needs help quitting smoking can use Qwitter to monitor their progress. Those looking to lose weight can turn to TweetWhatYouEat or TweetYourEats.

Hardware hackers have put a new spin on the Twitter mashup — as it turns out, just about anything that can be plugged into the internet is capable of talking to Twitter.

Programmer Ryan Rose rigged up his washing machine to send him a tweet when his clothes are done. He just follows his machine’s twitter account (it’s PiMPY3WASH) and he knows when to go downstairs and move his undies to the dryer.

Linux hacker Shantanu Goel set up a video camera and some motion-sensing software on a PC connected to the internet. If anyone breaks into his house or goes snooping through his room, the software detects the movement and sends out a tweet.

Tech-savvy environmentalists can install Tweet-a-Watt, a gadget that plugs into your wall socket and connects to your wi-fi network. Once a day, the pocket-sized device broadcasts stats of your daily energy usage to Twitter.

Whether that sort of transparency results in embarrassment or bragging rights can be determined by a system like the one created by Justin Wickett. The Duke University student wired up his home so he could turn his lights on and off remotely, just by sending a text message to Twitter from his mobile phone.

Twitter Fast Growing Beyond Its Messaging Roots | Epicenter from Wired.com.

In New York Magazine this week, both Stone and Williams said that charging companies for brand verification is something that the company was looking into. This makes a lot of sense, especially given the rise of fake profiles, like the one that was recently taken down for the Dalai Lama. They note that a paid corporate account could have features like a prompt when a new user joins a company’s feed.

Then today, Stone made similar comments to the UK-based Marketing Magazine. “We are noticing more companies using Twitter and individuals following them. We can identify ways to make this experience even more valuable and charge for commercial accounts,” Stone told the publication. He went on to note that other ideas of charging companies to use Twitter to market products and/or provide customer service were on the table.

The latter part is something which companies like Zappos and Comcast have been doing for a while. They have employees that scan Twitter (something much easier now with Twitter Search) to see who is saying something about their company. If it’s something negative, or there is some kind of problem mentioned, these Zappos or Comcast Twitter users send messages to the user having the problem. I’ve experience this first hand with Comcast’s Twitter rep, Frank Eliason, who tweets from the account ComcastCares.

Marketing products on Twitter is a potentially more interesting idea from a revenue perspective. Late last year, Dell reported that it had made over $1 million in revenue thanks to Twitter. More recently, Dell announced that it would start offering deals exclusively to users who follow its accounts on Twitter. With Dell using Twitter to spur sales and clearly making money off of it, it makes sense that Twitter should be getting some of that. But the question of how much, is a tricky one.

“If it becomes complicated and costly, our instinct would be to move elsewhere,” Bob Pearson, vice-president of communities and conversations at Dell told Marketing Magazine. Other companies Marketing Magazine asked about the idea of Twitter charging businesses to market on its service, said similar things.

This idea of charging for corporate accounts, has been around since at least October, when CNET reported it was hearing whispers about such a plan. Since then, we’ve heard the exact same thing from a few other sources. In November, Williams started to float that idea out there publicly. But now, with talk about this plan clearly picking up, I think it’s a safe bet that it’s coming sooner rather than later.

Twitter has raised over $20 million in funding. Recent reports suggest that it’s looking for another $20 or so million, which could push its valuation close to a quarter of a billion dollars.

Twitter starts to talk up the charging companies plan » VentureBeat.

Improvements in the Kindle 2 design bring a thinner footprint, a metal back plate, and stereo speakers. As I mentioned last October, when the first Kindle 2 pictures surfaced, the design cues bring back memories of the first Apple iPods. As usual, the information is purely speculative but the forum reads that Kindle 2 will be available on February 24 for $359.

Kindle 2 features rounded corners, a black and white screen (apparently the same size as the original Kindle), a 3.5mm headphone jack with a sliding sleep button at the top and a unified QWERTY keyboard under the screen. Smaller navigation buttons are placed on both the left and right sides of Kindle 2. A joystick now replaces the original Kindle scroll wheel.

Amazon’s new Kindle will use the same EV-DO wireless technology for over-the-air downloads as the original. Storage-wise, Kindle 2 is said to come with a 2GB on-board memory. Form the leaked pictures, no SD card slot can be seen but my guess is that there will be a way to expand Kindle’s memory – maybe a microSD slot.

Leak: Amazon Kindle 2 Pictures and Pricing – PC World.

You’ve come to terms with the reality of the current job market. There are jobs available; but, it will take focus, dedication, and a bit of savvy to land one. No problem.

You’re ready to take a no-excuses approach to your job hunt and you’ve diagnosed any underlying job search issues. You’ve spotted a few areas where you need to improve your job search skills. Working with a career professional isn’t an option for you right now. So, what other options are available?

Here are seven, no-cost resources to help you become a more savvy job hunter that has the skills to compete in the current job market:

1. LinkedIn.com – LinkedIn is a social network for business professionals. An updated LinkedIn profile is practically a must-have for every job hunter. However, LinkedIn isn’t just for job hunters. It’s an essential tool for anyone who understands the importance of networking as a career management tool. You can connect with current or former colleagues and alumni and request recommendations (a professional endorsement) from people you’ve worked with in the past. LinkedIn also offers a great opportunity to connect with people within organizations you are targeting during your job search.
2. O*NET Online – A full-access version of the occupational network database. This is an invaluable tool for researching industries and discovering occupations that you might not have previously considered, but closely match your skills.
3. JibberJobber.com – This career management tool works seamlessly with LinkedIn or any spreadsheets that you might already be using. This tool will enable you to keep track of all of your job search and networking contacts and any correspondence or follow-up.  Best of all, if you need to resume your job search in three years, the information you collected this go-round will still be there waiting for you.
4. VisualCV.com – This online tool truly allows you to bring your resume to life – complete with presentations, documents, video, and a photo, if you so desire. It is especially useful for creatives with large portfolios. However, it can be a great way for any job hunter to stand out. Rather than just reading about your accomplishments, an employer can view a presentation you gave, see certificates you’ve received, and go through your portfolio. Note: The VisualCV does not replace your traditional resume. Rather, it should be used in conjunction with it.
5. JobRadio.fm – Up late worrying about tomorrow’s interview or wondering whether you should have listed every job you’ve ever had on your resume? JobRadio.fm – available online 24/7 – will keep you company and keep you informed about the latest job search strategy news. Listen to career and job search-related podcasts anytime or download a show and listen to it on your computer or MP3-player at your convenience. JobRadio.fm features content from Secrets of the Job Hunt, Career Communique, Jobacle, Jobs in Pods, Total Picture Radio, and the SavvyJobseeker Podcast – hosted by yours truly.
6. TheJobLab.com – Get 24/7 access to article, video, and audio libraries; online forums; and a number of other tools and resources for job hunters. Need more support at a minimal price? A low-cost upgrade gives you access to live workshops and bi-weekly Q&A sessions.
7. Free community resources – CareerOneStop is a great online and local resource for job hunters. Many local employment networks, libraries, and churches are now offering job search training or hosting job search support groups or networking groups. Do your homework and find out what is available in your community.

The current job market certainly requires a savvier jobseeker. However, there are lots of resources and sources of support available to job hunters – regardless of budget. Take advantage of any available resource that will help you to improve your job search skills and your job search fortune.

Cleveland Job Search Examiner: Seven no-cost solutions for the savvy job hunter.

Cutting the Unemployment Line

Even in this economic chaos, some jobs remain recession resistant

There are three options government can pursue when the economy goes south. First, the Fed can cut interest rates, buy up assets, and extend credit, all of which the central bank has already done. Second, Congress can cut taxes on businesses and consumers in the hope they will spend more. The first effort—last year’s tax rebates—didn’t have the intended effect since consumers used much of the windfall to pay down debt or save. The substantial tax cuts that will be part of the Obama stimulus package would likely have a similarly muted effect. Businesses and consumers, facing a tough credit environment and needing to repair their balance sheets, will likely use proceeds from the tax cuts to tide themselves over. The third option is for the government to directly purchase goods and services, to substitute the demand that consumers and businesses aren’t providing.

The Washington remnant of the Republican Party—40 senators and 178 representatives—is all for Options 1 and 2, cheap money and tax cuts. But they’re having great difficulty with Option 3. They have forgotten Richard Nixon’s famous line that “we’re all Keynesians now.” To them, spending government funds to goose the economy is unacceptable, not just because of the possibility of poor execution —i.e., pork. No, many are rejecting it as a matter of principle. Even though several Republican governors are pleading for assistance in the form of federal spending, Washington Republicans are saying no.

Newly elected Republican National Committee Chairman Michael Steele laid down the party line on CNN: “Let’s get this notion out of our heads that the government create jobs. Not in the history of mankind has the government ever created a job.” Sen. Jim DeMint of South Carolina succinctly summed up his opposition: “We can’t keep spending and borrowing to get us out of a recession.” Sen. Kit Bond of Missouri concedes that some government spending—such as spending on highways—can create jobs but thinks that spending on mass transit or alternative-transit infrastructure isn’t stimulative.  Read More…

Will the Stimulus Plan Create Jobs? | Newsweek Voices – Daniel Gross | Newsweek.com.

Last year the champagne still flowed, but in 2009 angst will dominate the Berlin Film Festival. Cutbacks by studios, concerns about financing and a big-budget thriller about an evil bank — even the silver screen can’t ignore the world economic downturn.

Every movie gets the villains it deserves. Bandits attacking Indians? It’s a western. Hit men shooting police? A crime story. And when psychopaths try to achieve world domination, it’s either a terrorist drama or a film about Adolf Hitler. Those are the usual suspects.

Since the financial crisis, though, a range of unexpected villains has started parading across the screen. Werner Schulz, a politician from Germany’s Green Party, summed up the current mood a few days ago: “Now people are more afraid of their financial advisors than of al-Qaida.”

One German director seems to have anticipated this development. Tom Tykwer, known for his bank robbery fable “Run Lola Run,” will premiere his new thriller “The International” on Thursday, when it opens the 59th Berlin International Film Festival, or Berlinale. This time the bank itself is the villain.

The bank in the movie, in fact, is a criminal organization that commissions murder and homicide — a “bad bank” worse than anything from the current nightmares of the world’s finance ministers. The hero in “The International” is not a crusading protector of the public interest but British star Clive Owen (“Inside Man”).

The financial crisis will set the tone at this year’s Berlinale, the most important international film festival after Cannes. It will be the main topic of conversation at the parties and receptions, the festival’s speeches, press conferences and in the haggling over film rights and new productions.

Complete Article…

Worry Lines Through the Botox: Berlinale Reflects Leaner Times for Movie Business – SPIEGEL ONLINE – News – International.

Michigan cut welfare rolls 13 percent despite the fact that its October unemployment rate topped 9 percent. An office cubicle at the welfare agency in Detroit.

WASHINGTON — Despite soaring unemployment and the worst economic crisis in decades, 18 states cut their welfare rolls last year, and nationally the number of people receiving cash assistance remained at or near the lowest in more than 40 years.

The trends, based on an analysis of new state data collected by The New York Times, raise questions about how well a revamped welfare system with great state discretion is responding to growing hardships.

Michigan cut its welfare rolls 13 percent, though it was one of two states whose October unemployment rate topped 9 percent. Rhode Island, the other, had the nation’s largest welfare decline, 17 percent.

Of the 12 states where joblessness grew most rapidly, eight reduced or kept constant the number of people receiving Temporary Assistance for Needy Families, the main cash welfare program for families with children. Nationally, for the 12 months ending October 2008, the rolls inched up a fraction of 1 percent.

The deepening recession offers a fresh challenge to the program, which was passed by a Republican Congress and signed by President Bill Clinton in 1996 amid bitter protest and became one of the most closely watched social experiments in modern memory.

The program, which mostly serves single mothers, ended a 60-year-old entitlement to cash aid, replacing it with time limits and work requirements, and giving states latitude to discourage people from joining the welfare rolls. While it was widely praised in the boom years that followed, skeptics warned it would fail the needy when times turned tough.

Supporters of the program say the flat caseloads may reflect a lag between the loss of a job and the decision to seek help. They also say the recession may have initially spared the low-skilled jobs that many poor people take.

But critics argue that years of pressure to cut the welfare rolls has left an obstacle-ridden program that chases off the poor, even when times are difficult.

Even some of the program’s staunchest defenders are alarmed.

“There is ample reason to be concerned here,” said Ron Haskins, a former Republican Congressional aide who helped write the 1996 law overhauling the welfare system. “The overall structure is not working the way it was designed to work. We would expect, just on the face it, that when a deep recession happens, people could go back on welfare.”

Read more…

Welfare Aid Not Growing as Economy Drops Off – NYTimes.com.