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Whole Foods looks to Category Management to Drive Growth

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Intense competition for natural and organic foods has slowed sales growth at Whole Foods. Total overall revenues are up, but comparable-store sales have declined over the past year and a half, dropping 2.4% in its most recent quarter. Why? Demand for natural and organic foods has increased, but so has the competition:

  • Big box supermarkets like Kroger, Target and Walmart are carrying more natural foods.
  • Powerful rivals like Trader Joe’s are opening more stores.
  • Healthy online alternatives like Blue Apron and Plated have taken sales away from traditional grocery chains.

Whole Foods understands that competitors are making inroads and luring away customers. Their plan is to concentrate on their core customers via category management to maintain loyalty and increase average transaction size at checkout.

In February, Whole Foods hired dunnhumby, experts at analyzing customer behavior with a deep understanding of sales data from the manufacturer’s perspective. Whole Foods plans to use dunnhumby’s data-analysis skills to drive both its loyalty program and the implementation of category management. dunnhumby partnered with Kroger to develop its acclaimed loyalty program and will help Whole Foods build on the positive results of a loyalty pilot program launched last year in Dallas.

According to Mark Johnson, CEO of Loyalty 360, “dunnhumby’s rich data analysis will assist Whole Foods in optimizing product assortments, while at the same time bringing an understanding of the various triggers — price, promotion, selection, etc. — that drive increased purchases for each individual customer.”

Whole Foods CEO John Mackey stated, “We’re refocusing on our very best customers … we are focused on data through category management; managing our company a lot more with data and marketing information – evolving our purchasing operating model while developing data-rich, customer-centric category management capabilities are critical steps.”

A CEO’s Advice to his Daughter

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“These are the little secrets they don’t teach in school or tell you about when you’re working in a large corporation.” – Robert Hawthorne

Robert Hawthorne was President & CEO of Pillsbury Canada, President & CEO of ALPO Petfoods, President of The Pillsbury Company (North America), President of Select Comfort Corporation and the CEO of the Ocean Spray company.

I had the good fortune of meeting Robert at a General Mills alumni gathering. I asked Mr. Hawthorne if he had any “words of wisdom” and he was kind enough to share the advice he gave his daughter when she graduated from college.

What follows are his thoughts on starting a new job and becoming a manager. It wasn’t written to sell a book. In fact, Robert pointed out that these are management techniques “you won’t find in a book.” It’s invaluable insight without the fluff you might find in a self-help guide.

His original email to his daughter grew into three sections (1) The Basics, (2) Becoming a Manager, (3) Advanced Management Techniques. It’s clear this advice is valuable for anyone at any stage of their career.

Again, my sincerest thanks to Robert Hawthorne for sharing this with me … and now you.

PART 1: THE BASICS

30-Day Plan

In your first 30 days in a new job you have the opportunity to establish how you will work and what you’ll be working on. I would recommend writing out a list of ’30 Day Objectives’. Share it with your Boss and ensure that it has his/her input. It should be simple and clear.

Time Management

Take a Time Management course! Do not hesitate. If your employer doesn’t offer one … sign up and pay for it yourself. This will provide a life long system to organize your day, your life and establish priorities. I am continually surprised by the lack of good time management skills with executives I have coached. This is the one course that everyone should take! Sounds simple…but…most people can’t find the time to do this…. Here’s one tip…take ten minutes at the start of each day and write down what you need to get done. Don’t ever just dive in.

The Tool Box Concept

When you graduate and start your first new job … assume you know absolutely nothing! Your boss will believe this to be true so you might as well be on the same page. Try to think of your knowledge base as a ‘tool box’. Upon graduation the school gives you a big empty tool box containing a screw driver and a pair of pliers. Going forward you will gradually add new tools and by the time you are about 30 years of age the tool box will contain a full set of wrench’s, a power drill, saw and many other things that you know how to use really well. Your job is to build up the tool box by adding more and more sophisticated equipment over time. In my experience it is far more effective when a new employee acknowledges that they have a lot to learn and are willing to do so. People who act like they know more than they really do are always viewed negatively.

Work Hard

There is usually very little difference between recent graduates. They all did well in school and have exhibited leadership skills or they wouldn’t have been hired. Everyone is equal at the starting gate. So how can you differentiate yourself from all the other recent hires? The answer is ‘hard work’. If you work 50 hours a week and everyone else puts in 40 you will gain +25% more knowledge and build your tool box at an accelerated pace. You will also get noticed and be more knowledgeable. If you really want to get ahead this is a prerequisite.

But Work Smart

As your career progresses hard work alone won’t get it done. As I progressed I was getting recognized for long hours but realized that there were ways to work smarter. There were times when I found myself working until 2:00 in the morning and coming in early totally exhausted. There is a fine balance between putting in the elbow grease and working smart. Developing good time management techniques will provide the edge. I also try to think about balance on 4 fronts: Work, Family, Personal and Community. While you are working harder than others at work, you need to have a full, complete life for yourself, your family and for giving back to the community. Too much work can choke out the other areas and the other areas are where you will be remembered after you’re gone.

Entitlement

Years ago I had to remove an executive from their current job. This person had an R&D background and been promoted into a Director of Marketing position. It was clear that he did not have a marketing background and was ineffective in this job. I wanted to move him back into R&D but he was reluctant to go. He pointed out that his failure at the new position was not his fault…it was the fault of the company! He suggested that we send him to Harvard so he could learn all about marketing! He clearly felt entitled. I was flabbergasted. There is a clear difference between entitlement and empowerment. Someone once said ‘entitlement is empowerment run aground’. In business you are not entitled to anything. You must earn it. As you start out, do not fall into the entitlement trap.

Managing-up

Managing-up is all about getting regular, quality face-time with those above you, particularly your Boss. When you start a new job, try to negotiate a regular time to interface with your Boss. Once a week is OK but 5 to 10 minutes every day is optimal. Try to do this each morning. As an employee, your job is to reduce your Boss’s anxiety level to zero. Once you are meeting regularly with your Boss he/she will get to know and trust you. Managing-up requires that you take advantage of opportunities to interact with more senior executives. Use this time to update them on the accomplishments of your team. Always start by delivering the good news. If you launch into the bad news first you will never get to deliver the good stuff and will appear as being constantly negative. I have worked with people who can’t wait to tell you the bad news and tried to avoid them. These managers never seemed to get ahead in their careers.

Saying No

Pushing ahead in your career often means pushing back against unreasonable demands and expectations. If you have a Boss who is piling it on and you are having trouble coming up for air you will need to push back. Start with your boss’s explicit needs, which usually break down to ‘make me money, save me money or make my life easier’. If you are doing these things well, you are going to be appreciated. However, your ability to handle a big workload may tempt the Boss to pile more on and run the risk of burning you out. If this is the case, make it a priority to open up the lines of communication with your Boss and find out what the real priorities are, and deliver on those. That way you can push back and delay work that is peripheral to your goal of getting ahead. Once you understand the real priorities you can go back and get agreement to reschedule the less important tasks. Recalibrate regularly with your Boss…have discussions to confirm you are on track to meet or exceed expectations.

How’s it Going?

The most common casual question you will get from a superior is… ‘How’s it going?’ The absolute best answer is…’Terrific’…even if it is not the case. Superiors do not want to hear negatives or long explanations of what going wrong…so don’t bother. The answer is always… ‘Terrific!’ Sounds too simple…but very few people do this.

Internet Usage and Emails

This one may seem obvious…but… be very careful with what you are viewing on the Internet. This stuff gets monitored by most large companies. When forwarding emails from your work computer be very, very careful…off color jokes and photos are a big no-no. Never-ever send a nasty email to a fellow employee even you feel they deserve it. This always turns out badly. With access to Facebook and all sorts of other social networking channels there are issues around corporate confidentiality and viruses bringing down networks and servers. Don’t send anything on corporate email or internet connection that you wouldn’t feel comfortable being published on the front page of the Wall Street Journal! Be very careful with Facebook etc and make sure not just anyone can view your pictures (drinking with friends). Lastly, beware of water cooler conversation. In every company there is always at least one person who loves to gossip. If you join that game it’s an easy trap and in which to be ensnared and difficult get out of.

Dress For Success

Many years ago a best selling book came out entitled ‘Dress For Success’ and I read it. The author did a study where he took photos of the same person wearing different suits and ties and showed each individual picture to different groups of 100 people. This provided a statistically valid sample. The results were amazing. People thought the guy in the photo wearing a dark blue suit, white shirt and maroon tie was twice as smart as the guy wearing a brown suit! As I read the book it became clear that what your wear can have a powerful impact on how others view you. Most of us do not wear suits to work anymore but I believe the concept remains intact. If you haven’t given any thought to how you dress…start right now! Save the weird outfits for the weekend. Additionally, watch how some the more successful senior executives are dressed. This is usually a good guide.

Public Speaking

There will be times when you will be called on to express yourself in front of a group or give a formal presentation. It is critical that you develop reasonable public speaking skills as they can rapidly push you up the ladder. There are different ways to become more competent speaker. I was always very nervous to speak publicly but overcame my fear by signing up for a presentation course, reading a few books on the subject and forcing myself to do it whenever I could. I found the more I spoke publicly the more confident I became. As you rise higher in the organization there will be more demands for you to speak in public …build this skill now!

-Robert Hawthorne

Part 2, Becoming a Manager

Carpe Datum (Seize the Data)

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Ok, so the Latin translation of Seize the Data is actually carpe notitia. Better yet, it should really be Seize the Big Data which would translate to carpe magnus notitia. But with that much Latin, I’m already starting to lose you.

So let’s cut to the chase: Nearly half of all companies are not seizing the data because their reporting systems are too cumbersome to provide timely and reliable data.

Don’t buy it?

A survey of 1,500 financial decision makers found “over 46 percent of CFOs rely on gut instinct to make business decisions in lieu of fast access to accurate internal data…” It also revealed that an “inability to access the right financial data is having a direct impact on business performance.” Of those polled, nearly half said poor data hampers timely decision making and inaccurate information is the main cause of organizational mistakes.*

How can this be? 

The reality is that many companies have large ERP systems that make it difficult and slow to extract information and/or it can’t be reconciled which means the data is not reliable. As a result, manual spreadsheets are prepared to create ad hoc reports, but the unavoidable input errors make spreadsheets a less than optimal solution.

What you need is a reliable source of data from a single source of the truth. A user-friendly CPM solution that can unlock your data to unleash performance and accelerate growth. One that can allow you to easily drill down to a granular level of your business and instantly answer any question.

Imagine having the insight to uncover risk, discover opportunities and extract KPIs. A CPM that anyone can use, but no one can break. A system that will streamline planning, budgeting and reporting processes. A turnkey solution that can transform your company.

You can stop imagining. The solution is available today.

Are you ready to seize the data?

Yes!

Money Ball Proved the Value of Harnessing Big Data

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In Major League Baseball, it’s a whole new ball game. Ever since the movie Money Ball demonstrated the value of using advanced data analytics, the game has changed. Using big data has proven to help MLB teams succeed.

Of course, statistics have always been a part of baseball, but until the last few years, stats were still recorded in the traditional way through observation. Many decisions were made based on limited data. Now 7TB of data can be gathered from a single MLB baseball game.

Unfortunately, in many large companies today, many high-level decisions are still made with limited information. Why? It’s not for lack of data. It’s about the ability to leverage the enormous amount of data available.

But extracting valuable insight from big data can be a huge challenge. In many companies the information needed is simply too difficult to obtain. Their large information systems are not agile enough to quickly create ad hoc reports or answer unusual questions. It may take weeks to explain a single change in product sales or identify a key performance indicator.

Even when the effort is taken to compile the data, it might be too late to fix a problem or take advantage of an opportunity. Or the figures may not be reliable as the data is pulled from many different databases and ERP systems. Which means many questions are never even asked.

Sound familiar?

If so, you’re often flying blind. But you still need to make decisions. And that means you’re going to have to rely on your gut. And as baseball has shown, your gut is not as reliable as unbiased data.

So you have to decide. Continue to blindly swing away and hope to compete? Or improve your visibility. However, it’s not easy to embrace new solutions and rely less on old ones like Excel. Baseball experts relied on the same statistical approaches for over 100 years. Change isn’t easy.

But like baseball, there are new and better ways for business to access and analyze financial data. There are many cutting edge Corporate Performance Management (CPM) solutions out there, but some simply outperform the rest. You need a CPM that pulls your data into one single source of the truth – so you can rely on it. One that allows you to quickly and easily answer any question – slice and dice the data any way you want.

A CPM solution that’s easy to learn so everyone can use it, but isolated from your other data so no one can break it. One that allows you to dig down to a granular level to reveal problems and uncover opportunities. A solution that unlocks your data so you can unleash your company’s performance and help you win.

When Moneyball revealed the benefits of big data six years ago, many teams were still slow to adopt. Some were skeptics thought it was too unconventional. Not anymore. The Chicago Cubs overcame a 108-year drought by using big data analytics. In fact, the Cubs World Series win last year is considered proof that big data analytics in baseball is here to stay.

The same thing is happening in the business world. But you can’t win sitting on the bench.

Are you ready to step up to the plate?

Yes!

To connect the dots, you have to see them.

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Imagine getting in your car and driving for eight straight hours staring through a dirty windshield. Your back window is pretty clear, but looking ahead, it’s always murky. It takes a tremendous amount of effort just to keep the car on the road. But you can’t stop, there are places you need to go.

Now imagine doing this day after day, week after week, and year after year.Over time you try a variety of windshield cleaning solutions. Some outrageously expensive. Others that seem to take forever to apply. None really work. You become resigned to the fact that the windshield will always be dirty.Unfortunately, this is the daily reality for many CFOs.

In fact, a survey* of over 1,500 financial decision makers found that over 46 percent of CFOs rely on “gut-feel” and instinct to make business decisions in lieu of fast access to accurate internal data…” It also revealed that an “inability to access the right financial data is having a direct impact on business performance and CFOs’ reputations.” Of those polled, nearly half said poor data hampers timely decision making, and inaccurate information is the main cause of organizational mistakes.In order to connect the dots, CFO’s need better visibility which comes from accurate and reliable data and the tools that can quickly and easily extract that data.

Visibility

Without visibility, you can’t see what’s right in front of you. Sometimes that’s all it takes. But to seize an opportunity, you have to see it.

As a member of the senior leadership team, the CFO plays a key strategic role in the stewardship of the company. As such, the CFO must have real-time visibility and insight – a high level view, but also the ability to identify problem areas and opportunities at any level. The data to offer proactive solutions to improve financial performance and mitigate risk.

As such, CFO’s need quick access to timely KPI’s and the ability to drill down to get answers to any question. Visibility requires the capability to run “What if” scenarios and ad hoc reports whenever needed. To improve corporate performance, you need a clear understanding of the 20% of your business that accounts for 80% of the revenues.

But for many companies, that’s simply not the case. Their reporting systems can’t easily provide timely and reliable data. Mid-course corrections, however, need to be made at mid-course.

Accuracy

According to a recent FEI article, “Five Financial Reporting Priorities for the Modern CFO”, the #1 priority is Accurate, Actionable Data.

As business systems become more and more complex and large amounts of data are pulled from so many databases, many CFO’s live in fear that the data is not reliable and may be reluctant to share the information or make decisions based on the data.

In many companies, data is often siloed and it becomes nearly impossible to find a single point of data-based truth. Finance, marketing and operations may be operating on different software platforms and databases that for practically purposes don’t play well together. A common problem we call “data splatter”.  With data splatter, it’s often too difficult or time consuming to reconcile between systems and impossible to know which one bests represents reality.

As CFO’s move into more strategic roles, there is a greater need for a “single source of the truth” defined by InformationWeek as the “one source [of data] that everyone in a company agrees is the real, trusted number for operating data.”

A single source of the truth will promote confidence and allow for a more holistic and effective  actions by senior management. Problems can be addressed sooner and opportunities can be acted upon quickly.

“CFOs need to enhance organizational alignment by integrating planning and reporting to create “one version of the truth” that unifies all decision makers…an organization’s ability to survive and thrive depends on having instant access to data that’s accurate, reliable, and up to date.” – Paul Sharman, Strategic Finance, April 2016 “More Strategic CFOs?”

Technology & Tools

“Technology is changing so rapidly and arriving so fast, there is a certain motivation to be cautious and take a wait-and-see approach. You might think, ‘I’m going to be smart and sit back a little bit and see what happens before I make a decision.’ The problem is that the change is so significant and the new capabilities so advantageous, that if you take a wait-and-see approach, you run the risk of being put at a severe competitive disadvantage.” – Tony Klimas, EY Global Finance Performance Improvement Advisory Leader

It’s no longer a luxury. Taking advantage of the latest reporting tools can do more than reduce planning and reporting cycles, they are increasingly becoming necessary to compete effectively. How? Many of the latest CPM systems can provide the timely and accurate data needed in today’s hyper-competitive business environment.

Imagine if your competitors have quicker access and insight into their operation efficiency and product performance by being able to drill down into any level of the business or create ad hoc reports to quickly adjust their sales forecast, product mix, pricing etc. They’ll be able to make informed decisions in real time and reap the benefits in greater profit and sales – possibly at your expense.

Connecting the Dots

To be competitive today, CFO’s need the visibility and capability to see what’s down the road to find hidden opportunities and manage risks. Tools that can transform companies and boost performance by helping to predict outcomes, provide better information faster to key stakeholders and more forward looking insights.

Imagine having the knowledge and perspective to make informed strategic recommendations that will improve performance and keep your company on track. To finally be able to take the guesswork out decision making and rely on facts, not your gut instincts.

You need a CPM that can easily extract KPIs. One that everyone can use, but no one can break. One that provides a single source of the truth and infinite aha! moments. One that is user-friendly and budget-friendly. One that unlocks your data and unleashes your ROI. A turnkey solution that can transform the company.

Which brings us back to our story…

Finally, one day you hear about a product that claims to quickly and easily clean the data splatter from your windshield and provide visibility every day. It’s not from a company you’ve ever heard of. It’s not even expensive. It’s easy to apply and works right away and only needs to be applied once. It can’t possibly work.

You try it anyway.

And now, for the first time, you can see what’s ahead! The ability to see things in a way you never could before. You can see what’s coming, the bumps in the road, the opportunities, and more.

Now you can begin to connect the dots…and start going places.

*Epicor, 2015