Saturday, June 30, 2007

Let's focus on the PLANES!

If there's a theme that runs through Corporate Tool, it's that results are what matter in business. Getting good results should be first and foremost in the mind of any owner, manager, or employee of an organization. If a rule or practice in your organization is getting in the way of acheiving results, it must be ditched. Period. Sure, there can be lots of debate about whether a given rule or practice leads to good results, but let's look at a specific subset: Rules or practices that employees generally don't like.

The Corporate Tool rule for such practices is that they carry a heavy burden of proving they contribute to good results. Employees who are unhappy about nettlesome, pointless rules do not create good results for you. There will, of course, be unpopular rules that easily clear this hurdle - You run a construction company and employees don't like the mandatory random drug tests? Tough; that's an unpopular rule that carries its water.

But what of dress codes? Within reason, they will not offend any but those so lacking in common sense they should be sent packing anyway. But what of dress codes applied in benumbing detail to a group of people who a) don't see the public while working; b) have one of the most stressful jobs imaginable; c) are exceedingly low-paid relative to the importance of their jobs and d) are responsible for the lives and deaths of anyone flying on an airplane in our exceedingly-crowded skies?

As someone who flies a lot, I want HAPPY air traffic controllers. Controllers who feel good about their team, their managers and the job they are doing. I don't want them feeling the least bit harassed and thinking it might be time to kick it in, start their own business and let some new guy with three month's experience keep the planes apart.

And I don't care that, as the FAA spokesperson puts it, this is a simple dress code that "would not raise an eyebrow in the business community. " The "business community" meets with customers, civic leaders, competitors, etc. Controllers sit in a darkened room, far from the public eye, and keep aluminum tubes full of hundreds of human beings from crashing into each other.

The FAA has a bad enough track record in dealing with controllers. It should be bending over backward to make their jobs as bearable as possible, but instead they come up with this. Sad.

Friday, June 29, 2007

IPhone, uRain

Lots of folks lined up outside the AT&T Mobility store in Redmond Town Center, awaiting this evening's re-opening and launch of the much-hyped iPhone. I took this photo at lunchtime, when it was actually a bit sunny. I hope the wait was worth it - rain has been falling all afternoon.

Tuesday, June 19, 2007

Red Handed at Whole Foods

I’ve stayed away from posting on the Whole Foods – Wild Oats merger and the FTC’s lawsuit to block the deal. For one thing, I’m a Whole Foods shareholder, having bought after their most recent quarter when WFMI stock finally dropped to attractive levels. For another, I’m in general agreement with the consensus that the FTC is out to lunch on its view that the relevant market in which Whole Foods competes is a narrowly-defined category of natural foods stores, and I haven’t had a whole lot to add.

However, I have a theory about why the FTC filed its lawsuit, and today's revelations bolster my view. I shop at Whole Foods, but I don’t care about getting organic carrots; I appreciate the food quality and the aesthetic of shopping there. Like most others jostling through the cheese aisle at the Redmond Whole Foods, I don’t shop there exclusively. Within a few miles there is competition on the low end from Albertson’s and Fred Meyer, at the mid-point from recently remodeled QFC and Safeway, and local stores like Larry’s and PCC (PCC, an 8-store Seattle chain, is, for all the world, like a mini Whole Foods). All of these grocers have expanded their organic and gourmet foods offerings while also enhancing the whole “shopping experience.” Just about everyone gets this – including, I believe, the FTC.

So who doesn’t get it? Whole Foods. As documents unsealed today show, WFMI’s CEO believed the merger with Wild Oats would prevent a price war. Huh? If Whole Foods competes with all groceries – as everyone believes, and Whole Foods is now trumpeting to all who will listen - what’s the rationale for buying Wild Oats in the first place? Does it really help them expand faster? How does acquiring smaller-formal stores that WFMI plans to close or relocate help them expand geographically? Why not just grow organically, as they’ve done so well for the last decade?

So, the merger never made a whole lot of sense to me, and my theory is that it didn’t make sense to the FTC, either – except as an attempt to take out a competitor (which is not, in itself, a reason to bar a merger). However, any such attempt doesn't even appear to be rational, given the widening of WFMI's competitive market. Three years ago, it might have cleared the field nationally for Whole Foods. Today, they're just buying up a second-tier competitor in a crowded marketplace.

Whole Foods is working off of yesterday’s playbook, and the FTC is probably going overboard because it found some unfortunately-worded documents. The ironic thing is that the antitrust authorities may well end up protecting Whole Foods from a value-destroying merger by killing the thing in court.

Monday, June 04, 2007

Counsel - Friend or Foe?

Beyond considerations of competence, how much does your choice of deal counsel matter? For larger companies, what about your internal counsel – are they helping or hurting your cause? As I’ve harped on before, there’s a cost to having your company viewed as being hard to deal with. It’s great to be known as a tough negotiator, but you never want to cross the line to the corporate equivalent of “unreasonable asshole.”

In fact, the biggest problem I’ve encountered isn’t overly-hard negotiating, but rather being a difficult pain in the ass over things that don’t really matter. Very little in corporate law is black and white – it is almost always a balancing of risks and opportunities. When it comes to your deal, a good lawyer will pay a lot more attention to remote risks that carry major potential consequences than to those risks that are likelier but would create only minor problems. Beware those lawyers who can’t tell the difference. If you find yourself arguing more with your own attorney than with the other side, that’s a sign you’ve got a problem.