Zappos Loses 210 Employees
Back in March, Zappos announced a new management structure-or lack of structure-and offered employees three months' severance pay if they didn't want to deal with it. In CEO Tony Hsieh's email to employees, he explained the organization's process of Holacracy: moving towards self-management and self-organization. The company is striving to be a "teal organization" described in the book Reinventing Organizations.
Although 210 (14% of employees) chose the severance deal, it's unclear whether it's because of Zappos' management direction or a strong economy with better job opportunities. John Bunch, who's leading the effort at Zappos, said, "The offer was a big incentive to leave Zappos, and people took the offer for various reasons. Some Zapponians took it because they are not in line with the vision of the company, others took it to pursue other passions including starting businesses. Ultimately, however many people took the offer is the right number because they are doing what is best for them and for Zappos."
Hsieh has a history of offering employees money if they choose to leave the company. The company pays employees $2,000 if they quit. Presumably, this encourages people who aren't happy (and perhaps the company isn't happy with them either).
Discussion Starters:
- The Washington Post article is titled, "At Zappos, 210 employees decide to leave rather than work with 'no bosses.'" Is this a fair characterization given the quotation by Bunch?
- What's your view of Zappos' practice of offering money for employees to leave the company? What are the benefits and risks?
Restaurant Owner Slams Guest Who Wrote a Bad Review
It's not the first time, and it won't be the last. The owner of LA restaurant Sunset Terrace Restaurant & Bar didn't like a review and told all of us about it.
The original post was from June 2014, but Tyrone only recently replied.
The owner's response (read at your own risk!) referred to the guest as "ignorant, disgusting, miserable" and said "The world will be a little bit better of place once you no longer a part of it. [sic]."
After the predictable backlash, the owner posted a long response on his Facebook page. The first three paragraphs are below:
After all the interest in my admittedly vulgar Facebook post (which I intended to send to Brooke privately)
I think I should give an explanation as to how I came to choose such Spicy language towards her.
Below is the account of what actually happened according to the three (3) witnesses I spoke with immediately after the incident. (A customer who frequents Sunset Terrace several times a week, an off duty employee having lunch and my employee working at the time Crystal)
Discussion Starters:
- When you read Tyrone's entire Facebook post, you learn that the guest had insulted one of his employees. Does this justify initial response?
- How would you advise owners to handle negative reviews, keeping in mind that the guest may always be right-but not always fair or pleasant?
Facebook Encourages a $15 Wage and Other Benefits
Facebook is taking a stand to increase wages. In a statement, COO Sheryl Sandberg described new standards for companies who want to do business with Facebook. The first paragraph is shown here: 
Sandberg writes that this is "the right thing to do for our business and our community." She also mentions, "We've been working on these changes for some months and had originally planned to announce this last Monday." Monday was May 4; sadly, Sandberg's husband, SurveyMonkey CEO Dave Goldberg, passed suddenly on May 1.
Discussion Starters:
- What's your view of Facebook's position? Why would the company jump into this controversial debate? Consider Sandberg's history.
- Is it fair for Facebook to require these standards of its suppliers? What are the potential consequences? Read the entire post, so you know what the company is requiring.
- Why did Sandberg mention the company's original date for the announcement? How do you expect people to react to this?
Amtrak Posts Messages About Crash
An Amtrak train traveling from Washington, D.C., to New York derailed, leaving at least six people dead and more than 200 injured. The investigation has started with the obvious question about speed.
Passengers describe a horrible scene with items and bodies flying around the cars. Some people are still missing.
In the meantime, Amtrak posted two messages to its Facebook page. The first simply announced the accident and provided an emergency number for people to call. The second gave more information and conveyed the company's regrets:
Wednesday, May 13 2:45am
We are deeply saddened by the loss of life from Amtrak Northeast Regional Train 188 that derailed north of Philadelphia Tuesday evening. We ask the news media to be respectful of our customers, our employees, and their families.
There were approximately 238 passengers and 5 crew members on board. Individuals with questions about their friends and family on this train should call the Amtrak Incident Hotline 800-523-9101. Amtrak has also established a Family Assistance Center to work closely with family and friends of individuals on the train. Local emergency responders are on the scene and an investigation is ongoing.
On Wednesday, May 13, modified Amtrak service will be provided between Washington and Philadelphia, Harrisburg and Philadelphia, and New York and Boston. There will be no Amtrak service between New York and Philadelphia, but New Jersey Transit will honor Amtrak tickets between New York City and Trenton.
Other Amtrak Service between New York and Albany-Rensselaer; New Haven and Springfield, Mass., and other points will operate.
Additional updates will be provided when available.
Discussion Starters:
- Assess Amtrak's Facebook post. What works well, and what changes would you suggest?
- What else, if anything, should the company do or say at this point?
Welsh Bus Company Rethinks Sexy Ad
Are people just too sensitive, or did this Welsh bus company cross a line with its ad? The picture of a naked woman with a provocative line was created for a Cardiff, Wales, company promoting its cross-city service.
A representative for the Advertising Standards Agency reported 45 complaints and told Business Insider, "We've received complaints about this ad, but we understand that the advertiser will be taking it down within the next 24 hours and has removed its accompanying tweet in response to the concerns it's received. We'll continue to monitor the situation in case further action is needed."
On Twitter, New Adventure Travel promised to take down the ads:
In view of the reaction to our bus advertising today we wish to set out our position:
Firstly we have stated that our objectives have been to make catching the bus attractive to the younger generation. We therefore developed an internal advertising campaign featuring males and females to hold boards to promote the cost of our daily tickets.
The slogan of 'ride me all day for £3' whilst being a little tongue in cheek was in no way intended to cause offence to either men or women and, if the advert has done so then we apologise unreservedly. There has certainly been no intention to objectify either men or women.
Given the volume of negativity received we have decided to remove the pictures from the back of the buses within the next twenty four hours.
Discussion Starters:
- What's your view? Is this just a catchy ad and people are too sensitive? Or is the ad potentially offensive?
- What, if any, cultural differences are at play? How do you think this would be received in the United States?
- How do we decide what "crosses a line"? What criteria do you use to form your opinion?
- Did New Adventure Travel do and say the right thing?
Is Andrew Cuomo Right?
In an op-ed piece in The New York Times, New York Governor Andrew Cuomo writes, "Fast-Food Workers Deserve a Raise." The article begins with context about his own actions in NY:
ALBANY - INCOME inequality is a national problem that leaders at all levels of government are grappling with. While American capitalism never guaranteed success, it did once guarantee opportunity. But today, too many Americans don't believe their children will have a better life than their own. The ideal of mobility has been replaced by the reality of stagnation.
Some argue that we can close the income gap by pulling down the top. I believe we should do it by lifting up the bottom. We can begin by raising labor standards, starting with the minimum wage.
In 2013, I raised New York State's minimum wage; it is now $8.75, up from $7.25 (and will rise to $9 at the end of the year). In my latest budget, I proposed raising it again, to $11.50 in New York City and $10.50 elsewhere in the state. But the Legislature rejected that proposal. So I am continuing the fight. While lawmakers delay, I am taking action.
As evidence, Governor Cuomo quotes President Franklin D. Roosevelt and provides data about income inequality, worker demographics, public assistance spending, wages and prices in Europe, and projected outcomes of raising wages.
Discussion Starters:
- What examples do you find of logos, pathos, and ethos in Governor Cuomo's article?
- Which arguments are strongest and weakest? What, if any, flaws do you find in his data or logic?
Fiorina Announces Run but Forgets .org
Here's a riddle: what costs $35 on Register.com (or $7 if you don't mind GoDaddy's advertising approach) but can blow a campaign launch? CarlyFiorina.org. The Republican presidential candidate and former CEO of Hewlett Packet didn't register the .org domain. Instead, someone took over the URL and posted about her layoffs at the company.
Text at the bottom reads:
That's 30,000 people she laid off. People with families. And what does she say she would have done differently?
"I would have done them all faster."
-Carly Fiorina
It's too early in the campaign for a mistake like this.
Discussion Starters:
- Who do you think is responsible for this? Should Fiorina make a statement about the mistake?
- How do you assess Fiorina's prospects at this point? On balance, will her history at HP help her or hurt her?
McDonald's New CEO's Video Isn't a Hit
Was Steve Easterbook, McDonald's new CEO, too honest in his video message? Easterbrook outlined a turnaround plan and admitted, "The reality is our recent performance has been poor. The numbers don't lie."
After the video was released, S&P downgraded McDonald's credit rating to A-, and the stock took a 1% hit in early trading.
A Mashable author calls the presentation a "passionless video pep talk." Seth Fiegerman said the video didn't reflect the promised "brand excitement":
"Excitement - or emotion of any kind - was, however, conspicuously lacking from Easterbrook's even, careful speech. For 23 minutes, Easterbrook talked at the screen, staring straight ahead, rarely blinking and gesturing blandly with his hands while only occasionally raising his eyebrows for emphasis. He stood in an empty, beige McDonald's hallway decorated with generic artwork. The camera kept locked on Easterbrook's face, only breaking away to show a gray slide deck with numbers from time to time."
Ouch. To be fair, Easterbrook is in a tough spot. The company clearly isn't doing well, as shown in this bar chart.
Discussion Starters:
- Watch Easterbrook's video. What's your assessment?
- Are authors like Fiegerman being too hard on Easterbrook?
- What do you identify as McDonald's key strategies for turning the business around? Which do you find most and least compelling?
SurveyMonkey Announces Death of CEO
Dave Goldberg was the CEO of SurveyMonkey and husband of Sheryl Sanberg, COO of Facebook and author of the book "Lean In." At just 47, Golberg died of head trauma after falling off a treadmill at a gym in a private villa in Mexico, where he was vacationing with family and friends.
According to The New York Times, Goldberg was "well regarded as an entrepreneur and mentor and was the less famous half of one of Silicon Valley's most prominent power couples." The news came as a shock and caused speculation about the cause. But a spokesperson for the prosecutor's office in the Mexican town said plainly, "he fell off the treadmill and cracked his head open." The incident may lead to new measures treadmill safety.
SurveyMonkey posted this announcement on its website:
Discussion Starters:
- How do you assess Survey Monkey's statement? Which principles of delivering bad news in Chapter 8 are followed, and which are not? Consider the audience, purpose, and so on.
- Should the company say or do anything else at this point?
Barbie Won't Associate with SeaWorld
Barbie, whose bones are attached with only moral fiber, has finally ended her agreement with SeaWorld. She will no longer be a SeaWorld trainer.
Mattel doesn't say why, but we can speculate that negative press about the theme park's treatment of orca whales, exposed by the movie Blackfish, is part of the reason.
Alex Clark, a Mattel spokesperson told NBC, "We're not making the doll anymore. Consumers may find it on retail shelves but we are not shipping and not producing the doll." About the decision, Clark said only, "A number of factors go into a decision like that. Their licensing deal expired and we've elected not to renew it."
Discussion Starters:
- Is discontinuing SeaWorld Trainer Barbie the right decision for Mattel even if the doll has been profitable?
- Should Mattel say more about the reason? What factors would management consider in communicating the decision?
Laughs at the Correspondents' Dinner
As is the tradition, the President of the U.S. gave an irreverent speech at the Correspondents' Dinner, an annual event for journalists covering the White House (and other celebs).
Here are a few highlights:
- He said his new strategy was something that rhymes with "bucket list." He repeated "bucket" after mentioning several initiatives, such as immigration.
- Referring to people still believing he's a Muslim, he said he's been so busy "all while finding time to pray five times a day."
- Admitting that some people still think he's "arrogant and aloof," he said, "Some people are so dumb."
- About Hillary Clinton, he said the economy is so bad, "I had a friend, just a few weeks ago, she was making millions of dollars a year, and now she's living out of a van in Iowa.
Discussion Starters:
- What's the real value of the Correspondents' dinner?
- Is it surprising to hear President Obama speak in this way? Did he cross the line in any way?
An AT&T President Fired Over Racist Text
One of AT&T's presidents has been fired for sending a racist tweet, and other executives may be involved. Aaron Slator sent offensive images that became public in a $100 million lawsuit filed by an AT&T employee.
The complaint blames a culture of racism at the company:
"These images, put out by Slator who is the President of AT&T, are beyond offensive. When Slator sent the picture of the African child via text message, he referred to it as an 'oldie but goodie.' Slator transmitted these images on his work phone, evidencing deep-rooted racial bigotry in his place of employment."
Knoyme King is claiming that she was denied a promotional opportunity, was unfairly paid, and suffered a hostile work environment.
AT&T has terminated Slator, which King's attorneys equate with admitting guilt.
A spokesperson for AT&T told Business Insider, "Aaron Slator has been terminated. There is no place for demeaning behavior within AT&T, and we regret the action was not taken earlier."
Discussion Starters:
- Was terminating Slator the right decision? Do you agree with the lawyers that this proves AT&T's guilt?
- I'm trying to understand Slator's position? What could be his defense?
Bud Light Regrets "Up for Whatever" Campaign
Bud Light bottle
Bud Light wants to attract the female demographic, but its latest campaign isn't winning any friends. In a campaign, "Up for Whatever," the beer company seems to be promoting bad behavior. A new bottle label reads, "The perfect beer for removing ‘no' from your vocabulary for the night."
This isn't the first time the campaign was criticized. A New York Times article gives some history:
And in March, Bud Light was forced to take down a post on Twitter that appeared to promote some type of sexual harassment: ‘On #StPatricksDay, you can pinch people who don't wear green. You can also pinch people who aren't #UpForWhatever.”
This time, Bud Light seems to regret the label choice. In a statement posted on its website, the company promises to stop production:
Bud Light removal
Discussion Starters:
What's your view of the campaign? Bud Light calls is "lighthearted." Do you agree?
Should the company have learned after the St. Patrick's Day tweet? Why do you think the bottle labeling continued after that criticism?
Is stopping bottle production the right decision? Should the company also pull existing bottles from shelves?
Brian Williams May Get a Big Payout
Brian Williams isn't going away quietly. Although the internal investigation may go for another five months, an LA Times article says, "the future looks bleak" for the NBC news anchor.
Williams is fighting for his job (or a payout) after his reporting came into question earlier this year. At this point, a return is unlikely. The LA Times article quotes a NBC staffer: "If there was [a path back], don't you think we'd be hearing about it by now?"
But if Williams doesn't resign on his own accord, which also seems unlikely, the network will have to pay between $20 and $30 in severance, based on the terms of Williams' contract.
So far, the investigation has uncovered ten "embellishments."
Discussion Starters:
- Should Williams resign and forfeit the severance pay?
- What, if anything, should NBC communicate at this point?
Dr. Oz Responds to Criticism
In a video on his website, Dr. Oz responds to criticism that he promotes products for the advertising income. Ten doctors have called for Oz's removal from the faculty of Columbia University College of Physicians and Surgeons, where Oz is the vice chairman of the surgery department.
In a letter to the dean of medicine, the doctors questioned Oz's credibility.
Lee Goldman, M.D.
Dean of the Faculties of Health Sciences and Medicine
Columbia University
Dear Dr. Goldman:
I am writing to you on behalf of myself and the undersigned colleagues below, all of whom are distinguished physicians.
We are surprised and dismayed that Columbia University's College of Physicians and Surgeons would permit Dr. Mehmet Oz to occupy a faculty appointment, let alone a senior administrative position in the Department of Surgery.
As described here and here, as well as in other publications, Dr. Oz has repeatedly shown disdain for science and for evidence-based medicine, as well as baseless and relentless opposition to the genetic engineering of food crops. Worst of all, he has manifested an egregious lack of integrity by promoting quack treatments and cures in the interest of personal financial gain.
Thus, Dr. Oz is guilty of either outrageous conflicts of interest or flawed judgments [sic] about what constitutes appropriate medical treatments, or both. Whatever the nature of his pathology, members of the public are being misled and endangered, which makes Dr. Oz's presence on the faculty of a prestigious medical institution unacceptable.
In his rebuttal, Oz questions the doctors' ethics and stands by his approach:
"Figuring out how to talk about your health and how to talk to you about it can be difficult, and there's been a backlash to my approach in some parts of the medical community," Oz said. "The 10 doctors who attacked me got what they wanted: sensational headlines and soundbites. I've long believed that doctors should never fight their battles, or each other, in public. But now I believe that I must."
It doesn't help Dr. Oz's case that his 2:20 video starts with a 30-second commercial for Nasacort.
Oz also wrote an opinion piece for Time, defending alternative medicine:
"My exploration of alternative medicine has never been intended to take the place of conventional medicine, but rather as additive. Critics often imply that any exploration of alternative methods means abandoning conventional approaches. It does not. In fact, many institutions like mine use the names 'complementary' or 'integrative' medicine, which is also appropriate."
Discussion Starters:
- Assess the letter and Dr. Oz's video response. Which are the strongest and weakest arguments of each?
- If you were the dean, what would you do?
Blue Bell Creameries Recall Several Products
Listeria monocytogenes found in Blue Bell products has been linked to 10 illnesses, including three deaths. The company announced a broad, voluntary recall of "all of its products currently on the market made at all of its facilities including ice cream, frozen yogurt, sherbet and frozen snacks . . ."
In a press release on its website, President and CEO Paul Kruse is quoted:
"We're committed to doing the 100 percent right thing, and the best way to do that is to take all of our products off the market until we can be confident that they are all safe. We are heartbroken about this situation and apologize to all of our loyal Blue Bell fans and customers. Our entire history has been about making the very best and highest quality ice cream and we intend to fix this problem. We want enjoying our ice cream to be a source of joy and pleasure, never a cause for concern, so we are committed to getting this right."
He also said,
"At every step, we have made decisions in the best interest of our customers based on the evidence we had available at the time. At this point, we cannot say with certainty how Listeria was introduced to our facilities and so we have taken this unprecedented step. We continue to work with our team of experts to eliminate this problem."
This must be a difficult time for the 108-year-old company: this is the first recall the management team has had to address.
The news follows a recall of Sabra hummus products also because of potential listeria, although no illnesses have been reported.
Discussion Starters:
- Assess Blue Bell's press release. What principles of persuasive communication does it follow?
- What else, if anything, should be the management communicate at this point?
Waka Flocka Flame Is Running for President
On April 20, the rapper Waka Flock Flame announced his run for president. (420 is a significant number for so-called "cannabis culture.") Rolling Stone magazine got the story and posted his campaign video, which you can watch here, but be warned: he uses the "F-word" seven times.
His campaign promises are to legalize marijuana, ban dogs in restaurants, and ban people who wear large shoes from walking on the sidewalk.
I'm not sure his slogan, "A blunt a day will take the pain away," will work with Conservatives-maybe Libertarians.
Makes me proud to be an American.
Discussion Starters:
- It's interesting that Rolling Stone ran the story, isn't it? Why do you think the editors would agree to this?
- How do you think his campaign will play out in the race?
Baha Mar Mishandles Delay
The Baha Mar resort in the Bahamas has been delayed for months, and critics say the communication isn't going well. According to a Hotel Chatter article, the original opening was scheduled for March 27, and then May 5, and now it looks like reservations will be accepted for July 1 - 3.
Hotel guests are angry. Some claim they didn't know about the delay until 48 hours before they left for their trip and that they found out on Facebook.
Hotel Chatter quotes Mike Webster, a hotel consultant:
"The starting point in dealing with any kind of crisis is good communication. And taking a passive-aggressive stance like posting something on your Facebook page is the opposite of proactive communication. To rely on Facebook to get the message out is just ridiculous."
A Wall Street Journal article questions whether this embarrassing delay will affect China's hopes for new business in the United States and the Caribbean.
The property did receive some nice comments on its Facebook page, complimenting the staff's help in finding new accommodations. Baha Mar is offering one free night to guests to compensate for the delay.
Discussion Starters:
- Read comments on the Facebook page. How would you suggest the management team respond at this point?
- What principles of crisis communication would you recommend the hotel staff follow in the future?
Target Apologizes for Sold-Out Clothes
First, Target was criticized for offering plus-sized clothing only online. Now the company is apologizing for selling out items from the new Lilly Pulitzer collection within minutes.
Customers thought the site crashed, but Target explained that it tried to manage traffic by closing down the site temporarily and by limiting access to parts of the site.
A Target spokesperson said, "We never want our guests to be disappointed. We share their disappointment with the experience of shopping online. It doesn't match what we aim to provide them, which is an easy, seamless, consistent experience."
Although shoppers were disappointed, some having stayed up all night waiting for the products to be available (which happened at 5 a.m., on a two-hour delay), the results for Target are positive overall. As the spokesperson said, "At this point, Lilly Pulitzer is the most talked about designer collection in our history."
Discussion Starters:
- One shopper tweeted, "Next time either 1) don't promote something that most people will never see or 2) significantly increase production #whatafiasco." Do you agree?
- Can you make an argument that the entire situation was intentional? What do you think?
Email Marketing for Millennials
A Marketing Land article provides good justification for marketing to Millennials via email. Going against earlier advice to put dollars in social media, a NextWeb article quotes a marketing director:
"If you look at Facebook and Twitter today, they are very different than they were years back. In addition, you have even more new platforms that have come about like Instagram, Pinterest and SnapChat. In the midst of all this change and new innovation, one thing remains constant. You need an email address to create an account on all of them. As these tools change, improve or go by the wayside, but email remains."
Sure, Millennials use social media, but they use it to be social. When interacting with businesses, they prefer email.
NextWeb offers these suggestions for getting Millennials to open and act on your marketing emails:
- Content is key: Information has to be relevant and "relatable."
- Test for the best: Although most emails are sent on Tuesdays and Thursdays and are opened after 12:00, test to see when your market responds.
- Check that list twice: Make sure you have updated addresses, and offer emails as "opt-in."
- Make it mobile: Millennials want information on their phone and main points up front.
- Click and share: Social share buttons should be tagged to specific content in the email.
- Special is better: Millennials respond to special discounts and to the word "exclusive."
Discussion Starters:
- What's your own experience with email? Are you always connected as these articles suggest?
- How do you assess the advice for email marketers? With which points do you agree and disagree?