Fortune’s annual list of the 100 best companies to work for is out. Family run grocery store Wegmans is #1. Deanna Garcia takes a closer look at Wegmans. audio
Category: Business
Lessons on Innovation from Microsoft
Carleen Hawn makes some interesting points on why Microsoft’s record of innovation is so “lackluster”:
Not to mince words, Bill Gates’s researchers have placed a bunch of expensive bets on technologies that haven’t panned out. But the company’s failure also points to three much bigger lessons about innovation.
Defense is easier. And for now, it’s more profitable. Harvard Business School’s Clayton Christensen coined the expression the “innovator’s dilemma” to describe what happens when entrenched companies confront new technologies. Good managers instinctively direct people and investment toward “sustaining innovations” that protect established businesses — and away from new ideas that threaten current profitability. That’s why Microsoft spends a lot on Office and Windows.
We have some local examples of protecting established businesses: Newspapers. Despite general circulation declines, both Madison Newspapers (Capital) and the Journal Company continue to invest in niche print publications that keep the printing presses going.
Weak on Entrepreneurial Energy
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Starting a Business is Not a Top Down Process
Rick Romell’s summary of CFED’s Development Report Cards for the States does not shed a whole lot of new thinking on Wisconsin’s entrepreneurial dilemna:
- Wisconsin placed 47th in the number of new companies formed per 1,000 workers in the state
- Venture Capital is a problem here
- Wisconsin’s Brain Drain – new grads often leave the Badger State.
Yet, Wisconsin continues to try government driven, top down programs, such as the Wisconsin Angel Network, among others.
Candinas Chocolatier is the type of business we should seek to emulate. Markus started the company in 1994, after completing an apprenticeship in Switzerland. Today, over 10 years later, he is still in business and clearly enjoys what he’s doing. The attention to detail illustrated in the product photos above demonstrates the devotion required to succeed. Let’s call it passion. Another interesting local firm, Planet Propaganda created his packaging.
Candinas’ products are certainly not inexpensive, nor are they run of the mill. Rather, Markus has taken a quality position in the market and continued to improve his chocolates. This is a very long term approach to business. I need say no more on this subject as Consumer Reports discovered:
?The best chocolates came from lesser-known makers,? the magazine pronounced in its February issue. ?Lesser-known? as in Candinas Chocolates, of Verona, Wisconsin (www.candinas.com). Candinas was one of only three chocolate makers nationwide to achieve the rating of ?excellent,? ranking behind Martine?s Chocolates and La Maison du Chocolat in that category.
The winning assortment was the Candinas 36-piece box (price: $41). ?Ultra-smooth dark and milk chocolates with especially good hazelnut, caramel, and liqueur-flavored centers,? praises the magazine, accentuating the ?fresh cream and butter notes.?
Fine chocolates from Wisconsin may boggle the mind, but consider: chocolatier Markus Candinas, 32, has Swiss parents and trained as a confectioner in their homeland.
Great chocolate makes perfect sense – we have fantastic dairy products. Perhaps we’d be better off further leveraging our dairy business (designer milks and more cheese varieties?).
Entrepreneurs are born, not trained. We simply, as Romell’s article notes, need to find more people willing to give it a try.
A useful book, sort of related is Mintzburg’s Managers Not MBA’s.
SBA: New Small Business Government Contract Rules
The SBA’s Office of Advocacy announced recently that roughly $2 billion in federal contracting money that was believed to have gone to small businesses actually went to large companies in fiscal year 2002. The reason: Larger companies like Titan, Raytheon, General Dynamics and Hewlett-Packard bought the small businesses that originally received the contracts.
Since the government strives to award 23% of all prime-contract dollars to small businesses, the SBA has implemented a new monitoring system that will force companies to recertify their small business status if they take part in an acquisition
Creating and Managing Change – The Car Business
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Queuing up at the local car wash recently, I was behind a guy in his 60’s who had a nearly new Cadillac CTS. While waiting for our cars to make the short wash trip, I asked him how he liked the car (the CTS has received many favorable reviews, as has the new STS – including the STS-V).
He has owned Cadillacs for 25 years and this one (CTS) does not ride nearly as well as his previous cars (big sigh). The older Cadillacs were known for essentially riding like a sofa. Personally, I like the direction they’ve gone with Cadillac (performance, efficiency, improved handling and interesting transmissions), though I’m not a big fan of the designs.
Cadillac is attempting to resurrect its product line and change the public perception (see their Led Zeppelin advertisements), something that is very difficult in any business, particularily with strong competitors such as Acura, Audi, BMW, Lexus, Mercedes and Volvo, among others.
In a related note, famed car guy Bob Lutz, #2 at GM and a former exec with BMW, Ford and Chrysler is now evidently blogging here [RSS Feed]. Interesting reading, particularily the opportunity he now has to interact with buyers, sellers and everyone in the GM supply chain. I applaud the effort and hope the result is better, more attractive and economical cars from the firm that used to have 50% of the US market.
Background Fat Link: Bob Lutz
The Power of Words – Launching a Revolution
Linus Torvalds launched his Linux revolution with these words, over 13 years ago. Today, the linux operating system powers a growing number of internet servers.
Place Based Foods: Maytag Farms
Greg Allen takes a look at Newton, Iowa’s Maytag Farms. They make a million pounds of blue cheese each year, and they do it the same way as when the plant opened: almost entirely by hand.Listen to this story here.
Rayovac Acquires ST. Louis based United Industries
Atlanta (ouch!) based Rayovac is expected to announce a $476M acquisition of closely held United Industries, a consumer-products maker of such brands as Cutter insect repellant, Sta-Green fertilizer, and Eight in One Pet supplies, according to Dennis Berman
The move is the latest in Rayovac’s plan to transform itself from a seller of low-cost batteries, which has been its focus for nearly 100 years, into a diversified purveyor of consumer products. In acquiring United, which operates under the Spectrum Brands name in the U.S., Rayovac expects its battery sales to account for just 40% of overall revenue, down from 67%.
The deal will pay St. Louis-based United a total of $406 million in Rayovac shares, which closed trading Monday on the New York Stock Exchange at $29.56. Rayovac will also pay $70 million in cash to United’s shareholders, while redeeming or replacing $900 million of United’s outstanding debt. The companies are targeting cost savings of about $70 million to $75 million, company executives said. They said the deal will be immediately accretive to Rayovac’s earnings.
Seems rather strange that a battery company would acquire a fertilizer and insect repellant firm, until I read that “both have long been under the wing of private-equity firm Thomas H. Lee Partners“. Ah, sounds like packaging for a bigger deal. Madison has growing risk here with respect to Rayovac’s ongoing employment.
A new challenge for Wisconsin Manufacturers: Chinese Car Imports
Iowa’s state government funds a local Venture Capital Deal
Sort of a deja vu vis a vis SWIB’s initiatives:
The money for the Acuity Ventures agreement will come from the Grow Iowa Values Fund, the economic development program that’s limping along with about $16 million of $100 million still available.
Lawmakers are expected to consider early next year finding a permanent source for the $503 million premier economic development program.
I generally think the state should just get out of the way and focus on reducing costs and paperwork. In other words, spend time on things that make it easier to create business and hire people in Wisconsin.