Archive for June, 2012

Thrilled to Make $11 an Hour at Apple

June 26, 2012

The New York Times ran a fascinating article on Sunday about Apple’s store employees. I pasted the link below.

The article focused on a rather interesting situation: Apple manages to hire highly skilled and motivated people despite paying them about $11 per hour and providing no real career path. These people could likely make far more working for Verizon or AT&T but they stick with Apple.

This is really a story about branding, of course. Apple is such a cool brand that people want to work there despite the high pressure and low pay. So Apple is able to pick exceptional people who deliver terrific service. This reinforces the brand while generating huge profits.

So is it silly to work for Apple?

On the surface it certainly seems so. Why work at a company that generates huge profits from your efforts and in return pays you very little? Apple is just taking advantage of the situation, right?

But working for Apple isn’t a mistake because anyone who works there gets to own a bit of the Apple brand. And this branding never goes away; they will always be part of Apple. Years from now they can confidently say, “Well, when I worked at Apple…” and “I was at Apple while Steve Jobs was CEO, and let me tell you what it was like….”

Of course, there doesn’t seem to be any reason to stick around very long. Once you’ve been there for two years or so, long enough that it proves you did a respectable job and weren’t fired, it is probably time to move on to a company that rewards you for your efforts and for your Apple branding.

Learning from Michael Francis

June 20, 2012

You can learn a couple important things from J.C. Penney’s Michael Francis.

Francis, of course, was President of J.C. Penney until he abruptly departed earlier this week. He was at the company for about eight months.


Learning number 1:  It is all about the results.

J.C. Penney is in the middle of a major strategy shift. Initial results are terrible; sales are falling sharply, competitors are on the attack and the stock is off 50%. It is difficult to keep your job with results like this.

CEO Ron Johnson won’t last long, either, if things don’t improve soon.


Learning number 2:  Work out the severance plan in advance.

Francis will apparently walk away with well over $10 million for his eight months of work. This is a rather remarkable achievement. Bravo.

He worked out the compensation deal before joining the company; he came in with a huge signing bonus and could keep most of the money if things didn’t work out after a few months. They didn’t and he leaves with a ton of cash.

Francis will be fine. I’m not sure about J.C. Penney.

Advice for the Graduates

June 14, 2012

Tomorrow more than 500 students will graduate from Kellogg. Many of them are my students; I’ve had the joy of teaching almost half of the group in my marketing strategy and biomedical marketing courses.

I’ll be at the ceremony but I won’t be addressing the students tomorrow; I was a finalist for professor the year but my bid apparently came up a bit short. But I’ll offer a few words of advice for the graduates here. I’ll keep it to three points, because as my students know the best plans and presentations focus on three things.

First, always have a back-up plan. There is a lot we don’t know about the future. What will happen with the Euro? Who will win the upcoming election? What will the U.S. healthcare system look like in ten years? But we do know one thing: the future will be full of surprises.

Your career will unfold in ways you can’t anticipate. You might be fired when you least expect it or find yourself working for someone who asks you to do things that are ethically questionable. You might come across a compelling opportunity you didn’t anticipate. You might need to move to a different city for a family reason.

So it is important to have a back-up plan. Ask yourself a simple question: in ten years, what type of a job might I like to have? You don’t need to know the exact answer, but it is good to a few options in the mind so you can test the ideas and take steps to make a move possible when the time comes.

I have a good friend who recently left his employer after many years. He is talented and skilled but seems a bit adrift. It is clear he never thought about his back-up plan. So now he is trying to figure out what to do. He knows what he doesn’t want to do, but isn’t sure what he would like to do. This is a difficult position to be in.

Second, live frugally. The world is an economic mess; the EU is falling apart, there is far too much debt everywhere and some global financial institutions are teetering. I don’t know how it all will work out, but I’m pretty confident that people who spend cautiously and have little debt will be fine. So save some money and if you’ve taken out loans to attend Kellogg get busy paying them off as soon as you can.

Third, define your brand on your own terms. Don’t let your employer define you. It is tempting to think of yourself as part of a company, so a McKinsey consultant or a P&G marketer or a Goldman Sachs analyst. Don’t do this. Defining yourself as part of an organization gives your employer too much power. Loyalty is fine but don’t think that your company has any great emotional connection with you.

Build a brand based on your talents and your skills. Craft a career that mixes learning and experience. The brand you build will be the foundation of your career and your life.


Commencement marks the beginning of the summer for me. This is a relief; I have had an exceptionally busy spring. I’ll be posting once a week or so. I have a number of corporate programs coming up, plus the Executive Development Program and Strategic Marketing Decisions courses at Kellogg. I’ll be traveling to Florida and New Jersey for work and Michigan and Colorado for vacation with my family. And I’ll be finishing up two new books that will be coming out this fall. I’ll post more about those in the weeks ahead.

J.C. Penney Retreats

June 8, 2012

J.C. Penney is in the midst of a major transformation. As I noted a couple weeks back, the company is moving away from its reliance on discounts; J.C. Penney has lowered everyday retail prices and is doing less price cutting. This year the company stopped using the word sale entirely, instead focusing on what it called “month-long values.”

Results have been grim and J.C. Penney is now retreating, at least a little.

CEO Ron Johnson this week announced that the company would start using the word sale again. He said, “We’re moving away from the word ‘month-long value’ because no one really understood that, to calling it what we intended to do, a sale.”

The big question remains: will J.C. Penney continue to retreat, once again embracing deep discounts, or will the company stick with the basic plan?

A lot will depend on results; if sales don’t stabilize quickly this week’s announcement will be just the first step.

Sara Lee becomes Hillshire Brands

June 5, 2012

Sara Lee announced today that it is changing its name to Hillshire Brands after it spins off its coffee division.

This is a smart move but I wonder if the executives at Hillshire missed an opportunity.

There was little chance the company would keep the Sara Lee brand. Sara Lee is closely associated with frozen desserts, so it isn’t a great fit for what is primarily a meat company. More importantly, Sara Lee is a rather tarnished corporate name; the company has struggled for a very long time, acquiring and spinning off businesses in a desperate business to create a sustainable, profitable enterprise. The organization needs a symbolic fresh start.

I’m certain the Sara Lee executives considered creating a new corporate name. This is what Kraft decided to do with its snacks division. But finding a good name is a challenge and for a small company like Sara Lee’s meats business it would be difficult to invest heavily in the new corporate brand. And what good is a corporate brand if no one knows it?

Using an existing brand, then, was the logical approach. Hillshire is certainly a good one.

I’m sure there was one big decision they struggled with: use Hillshire Farm, Hillshire Farm Brands or Hillshire Brands?

Hillshire Brands is safe. It also distinguishes between the product brand, Hillshire Farm and the corporate name, Hillshire Brands.

Still, I wonder if they missed an opportunity to fully embrace the Hillshire Farm brand. Bringing Farm into the name changes its meaning and in a positive, more emotional way. Hillshire Brands sounds like the corporate leaders are a little uncomfortable with the Farm. I would have embraced the connection.


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