Charles CROWSON: I’m Charles Crowson. And this is Outside the Box. The podcast about retail and all things related. Today, a special bonus episode with one of the kings of football.
Now, I know that baseball has been called our national sport, and trust me, I love that game too. But by the numbers— both in viewers on television, and in league revenue— football is the all-American winner, hands down. But it wasn’t always that way, and the road to the top for football has had many bumps along the way. No one knows that better than Paul Tagliabue, the former NFL commissioner who’s credited with bringing a lasting peace to the league after a decade of infighting between players and owners.
His success might have something to do with his perspective. He knows sports from all sides— starting as a kid in the school yard.
Paul TAGLIABUE: I've been an athlete my whole life. I went to Georgetown on a basketball scholarship and I look back at my youth I spent 10 hours a day in school yards playing every sport that the season would permit. Including including basketball and icy fields and football on asphalt. But at the same token I'm interested in lots of other things including education and so on so I try to keep a balance in my life — and my wife makes sure that I view the world that way.
CROWSON: But ...there’s something about football in particular that just gets to him.
TAGLIABUE: there's something about the mix of physical, psychological, tactical, strategic that goes into football that I think excites people. And the other thing is you know to some extent people love football because not everyone can do it.
CROWSON: Since handing over the reins of the NFL to Roger Goodell in 2005, Paul has sat on the Board of Directors of his alma mater at Georgetown. He’s also worked with P-FLAG, an organization for families with lesbian and gay children. His son Drew is the executive director of its NYC chapter.
We talked to Paul about the NFL as a business, and the changes he’s seen since his tenure, but we started by talking about how he got involved with the NFL in the first place. Way back.
TAGLIABUE: Well I became involved in 1969, 1970 as a young lawyer and that was the 50th anniversary of the league basically. There was sort of the pre-television era and the post television era and that really is 1960, 61, 62 in terms of the first effort by the league to have national television contracts and to share the revenue from the national contracts equally. Now we're talking about three million dollars for the first television contract for the whole league. So..
CROWSON: Now ads go for that much!
TAGLIABUE: you know 30 second spots go for that and then it's below the minimum wage for players. From 62 to 82 It was really a period of tremendous growth and tremendous success. But by 82 success had produced its problems and that included a long seven weeks strike that canceled seven games, truncated season which infuriated the fans. Increasing unwillingness of the public authorities to do tax supported finance for stadium which is understandable when you're a multibillion dollar business you're not going to get the same kind of support you might have got in early years earlier years. the 1980s turned out to be a lost decade really it was a decade of playing defense and dealing with problems but no growth and no focus on innovation no focus on change. So that's when I came in in 89 and I had lived through that as outside counsel for the league I had lived through the decade of the 80s.
CROWSON: That time that was about the point where I became more mature as a sports fan. The popularity of the sport was growing by leaps and bounds / Did you guys see that because / that springboard opportunity got cut short by that strike. You say it's a lost decade. Seems like a lost opportunity right there because the popularity that was building in the mid 80s.
TAGLIABUE: Yeah it was you know I think by 81 you had the highest rated Super Bowl game in history even up to today was the San Francisco Cincinnati game and that was the beginning of Bill Walsh's run and Joe Montana's run.. So but you could see that the tension was growing with the players. And and and then that hit home with the strike in 1982 where almost half the season was canceled. And what was left of the season was was an insult to the customers basically. The worst year ever was 87 when the players were on strike again. And then the owners deployed replacement players which you know labor parlance are scabs. But in football parlance they were people who couldn't play in the NFL and it was an insult to have them wearing NFL uniform -- insult to the fans not to the players. I mean some of them were terrific college football players but it was not the gold standard that you expected to get when you were buying either NFL advertising on television or NFL tickets at the box office. The worst part of that strike was that it didn't conclude with a settlement. The players just gave up and they liquidated their union. So I knew from that decade of experience that everything had to change.
CROWSON: So when you took over in 89 for Rozelle and you come in in the wake of litigating the strike in 87, you see so many challenges in front of you. Where did you start. Because what you've just described is almost sounds like a Mt. Everest of problems.
TAGLIABUE: Well where I started was with the business model of the league and the governance structure. The league had made a decision that the owners as the employers of the players would have their own multi employer collective bargaining group and the commission would have nothing to do with that. So you had a business where the CEO basically was divorced from the product which was which is the game and divorced from the key employees who make the product the players and that had been farmed out to owner committee for for labor law purposes. It made no sense in terms of governance and management. So I had to liquidate an owner committee and replace it with a committee chaired by the commissioner which took a lot of… A lot of one on one conversations. But I give credit to some of those owners who who had suffered through you know a decade of criticism but were willing to change. I was able to take over the leadership on the labor relations side and we were able to get labor peace with a lot of input from owners and club presidents and many many people but also at the executive level the league had grown up so the management structure was basically a pyramid with a commissioner at the top and at the bottom there were about 20 or 25 people who thought they reported to the commissioner. There was no president, chief operating officer. There was no CFO. There was no there was no talent in television, in apparel, you know retailing, sponsorship, stadium construction. There was no talent that was up to the challenge of really reinventing the league in the areas that had to be reinvented which is the relationship with the players, television, stadiums, and an expansion internationally. We brought people in from NBC we brought people in from Viacom we brought people in from MTV to head marketing. So so we had to reinvent our approach to talent and executive leadership and that that whole structure changed. Without that you can't get much done.
CROWSON: The average fan tuned into the game here in the Central time zone at noon on Sunday 3:30 whatever and they see the product knowing nothing about the machinations going on behind the scenes to keep your workforce happy. That being the players on the field with whom the fan most directly connects but also ownership, retail, television. Television played a huge role during your leadership in the 90s. Tell me about that.
TAGLIABUE: Well I became commissioner in late ‘89 and that was the final year of a three year television contract so for the 1990 season we had no television contracts unless we negotiated new ones. And so the first thing we did which was a major departure from the past was to look really hard at subscriber supported television and in that context that was mostly ESPN but Ted Turner had started Turner Broadcasting and Turner TNT sports. So we for the first time had major negotiations for cable television. So we we did television contracts that added Sunday night football on cable and added about I don't know maybe 500 million dollars a year of revenue that didn't exist previously. So that was fine. But we still had players who were these you know litigating rather than focused on playing. And we still had a system of allocation of players which had outlived its usefulness. So the next thing we had to do was get an agreement done with the players which became which was a result of a settlement of litigation and reconstitution of the union in a collective bargaining agreement and that that really brought in a couple of things. Number one it brought in a salary cap which from the owners’ standpoint it was an important measure in terms of spreading the talent and controlling costs. But it also brought in free agency. So everyone was entitled to free agency after four years of in the league with one exception the so-called franchise player.
TAGLIABUE: And that distinguishes our salary cap from what existed in basketball which had a salary cap in it. And it distinguishes those from any other sport where you can say “the most important guy in our team is X” and in that negotiation in 1992 the best example of X was John Elway. So what became known as the franchise player rule in those days we used to call it the “Elway rule” about two years ago I was having dinner with John and I told him it was the “Elway rule” and he said Are you kidding me? He said to me I get blamed for restricting free agency for quarterbacks. I said no you get you get the credit for creating the greatest league in the history of sports!
CROWSON: A lot of fans and a lot of people who are critics and historians of the league will lay that at your feet and say you made moves through the 16 to 17 years of your tenure from 89 to 06. I mean granted you took the league from $900 million to $6 billion and now it's since doubled under Goodell. But those moves paved the way under your tenure for what has become the most popular sport in America.
TAGLIABUE: Well you know a big part of the credit also goes to Gene Upshaw who was the head of the Players Association at the time. But more importantly he was you know maybe the greatest offensive lineman in the history of the game and he's in the Hall of Fame. And I think two things are worth saying about Gene. The first one was when I became commissioner Al Davis called me up and Upshaw had played for the Raiders and he and Al Davis knew each other very well. As owner, coach and player and Al Davis said to me you know the owners have been spending the last decade boxing with the players and what they don't understand is that offensive linemen are taught from the time they start playing that position if a defensive guy hits you in the head you smack him back twice as hard. So every time they smack Upshaw he smacks them back twice as hard. So stop smacking him in the head. Sit down and have some sensible conversations that include some respect for your adversary. So I said OK I hear you and I had a sort of the same sense because in the 80s I had cross-examined Gene Upshaw in trials and litigation and you know in a sense he and I were both tired of war.
TAGLIABUE: The other thing about Gene Upshaw was that having played the position he played he knew that great quarterbacks depended on great offensive linemen, great offensive teams depended on having good defensive teams and that 45 or 50 guys or even 60 when you include injured players make the game as competitive and as great as it is. So there has to be some sense of equity among the salaries. But you can't have quarterbacks making six million dollars which in those days was a lot, and linemen making 200000 which in those days was a little. Those numbers have changed but the salary cap really forces the other guys other than the visible players to be paid fairly well. Before we got the salary cap I remember a conversation with Phil Sams and I said What do you think will be the biggest effect of salary cap, he said offense that the left tackle on the right tackle who protect me will get paid fairly for the first time. And then they do now and then some of the highest paid players in the league.
CROWSON: Sometimes the overall number and overall number one pick in drafts now because—
TAGLIABUE: And sometimes they're the franchise player and the quarterback is not .
CROWSON: Absolutely. The league the league right now it's undeniable is embroiled in the situation and has been now going back to last season the Take A Knee situation, players demonstrating and protesting during the national anthem. Your thoughts on that as it has carried out.
TAGLIABUE: These young men are patriotic they're respectful of the military many of them grew up and grow up in families that are military families. I know that from my own experience over the years I know how much time they spend in the offseason going to visit troops not just in the United States but around the world including in Europe and Iraq and Afghanistan. When I was commissioner I used to have an annual luncheon with the chairman of the Joint Chiefs of Staff General Myers, Gene Upshaw and I used to have an annual lunch with General Myers at his request he would have us come to the Pentagon to thank us for what the players were doing with the military. So so to generalize and say get to the point of saying well this is about lack of respect for the military I think as you know very unfortunate to put it mildly.
CROWSON: That was the first thing I thought of whenever we started you were talking about this.
TAGLIABUE: Yeah, So, so what does it do. It produces an environment which is not conducive to a resolution somewhere in the middle. It's it's an environment that's conducive to a hardening on both sides which is what we've seen which is exactly what we don't need.
CROWSON: In your estimation, you have dealt so much in player structure salary structures, things like things like this, on the pro level. Could you see a day when the college athlete is paid?
TAGLIABUE: I can. In fact I'm on a Knight Commission on Intercollegiate Athletics which is you know one of the big not for profit groups that involved with the governance of college sports. I've said publicly that some combination of improved benefits especially in the area of health and safety for college athletes is critical to get done and I think that's now being addressed by the NCAA and the colleges including Georgetown where I serve on the board of directors for the last 12 years. But but I'm in favor of what I call academic achievement awards. So it's a concept that you would all the players would have adequate insurance adequate health and safety benefits adequate you know other benefits on a common basis but you wouldn't have you would not have any individual salaries...you would. Instead of that you'd have academic achievement award. So if a student athlete graduated in four years he or she could get a $50000 bonus if if someone graduated and got admitted to a bonafide master's program they'd get $100000. And I also think the scholarships should should guarantee seven years of education not just four years of education because to think that division 1 basketball players and division 1 football players can be expected to put in all the time they do in sports and get a degree in four or five years is unrealistic. They should have a four or five year athletic period and then two or three more years of full scholarship to be to get a degree or to get some type of certificate that manifests the education that they have that they've had. I don't think they should be paid but I do think they should be rewarded in other ways. Which focus on education.
CROWSON: In 2006 you handed over the reins to Roger Goodell and since that time the league has grown doubled in terms of revenues from 6 to 14 billion dollars. Not to give him a report card grade or the league itself but what have you seen change in the National Football League in this 11 year period.
TAGLIABUE: Well I think you know what I've seen is a lot of the things that all businesses are seeing. Enormous demographic change. A rapidly growing Hispanic, Latino community. But I think the most important changes are those driven by technology and what we're now calling social media and how and how people use their leisure time and how they access not just entertainment but you know how they access information. So the growth of fantasy sports. So I think and then and then in terms of the fans they they have access to social media and so you have information moving with unprecedented speed you know throughout the fanbase. Some of it's accurate some of it's inaccurate but it requires you to respond in ways that are unusual. And I think also you know in terms of some of the disciplinary issues, did he do the right thing with Ray Rice or what is the right thing to do? How do you handle these player disciplinary issues or team disciplinary issues. It's very complicated. It's complicated for universities, it's complicated for all businesses, to deal with some of these issues. You know sexual harassment, spousal abuse. Most of the challenges the league have had are sort of a microcosm of the challenges that most businesses have and most institutions in the not for profit sector have...they're just a little more visible in the NFL.
CROWSON: Could you imagine or a strategic approach you might have to take to governing in a time where social media occurs as it does?
TAGLIABUE: I've thought a lot about the differences in terms of the demands it puts on management which has a lot of implications. It means you have to do a lot of planning. You have to do tabletops you have to understand relationships you have to have plans in place for you know a huge number of contingencies. Many organizations call that enterprise risk management. So I think that the whole concept of the chief risk officer and enterprise risk management has grown up in business generally because people understand that some of your biggest risks are going to hit you in the back of the head they're not going to be things that are coming down the highway in front of you. So in that I think is the biggest change. How do you deal with that in terms of your management. I think you have I think you have to be decisive and you know I think that in the NFL context in the sports league context generally you are all your shareholders are the owners. That's that's one thing. Your board of directors are the owners. That's another thing. So you have it in the NFL you have a 32 member board that's pretty big board for most companies to have, usually six or eight are better than 32 in terms of being nimble. you always have to strive for consensus but you need to recognize at some point you have to make decisions and choices without consensus. You you can you can strive as much as you want but to get consensus among 32 people or unanimity which is what you hope for in some context.. 9/11 Katrina the Rooney rule about minority hiring for coaches— some of those things you just have to say. I've listened to enough and here's what we're going to do.
CROWSON: I have three questions for you. Rapid fire. When's the last time you went to a game as a fan.
TAGLIABUE: Probably in the 1988 season although I would have to change that to say that I do go to a Ravens game every year with my grandkids and that's about as close as I can become to becoming a fan.
CROWSON: Do you still like football.
TAGLIABUE: Yeah I like it a lot. And you know I'm I'm really troubled by the health and safety issues. I think that they are complex. I think that they're in some in some ways they are seriously mis described and misunderstood because the science is still in its early stages if not in its infancy. But obviously there are issues with we know that much in terms of how it affects certain players, concussions and other other injuries.
CROWSON: Player in the game today who excites you.
TAGLIABUE: While this young player in Philadelphia Carson Wentz is pretty exciting and is running back in Kansas City Kareem Hunt is pretty exciting. You know I'm probably missing some of the most important because I don't watch as many games as I used to in the past. But Tom Brady is got to be at the top of anyone's list in terms of excitement. It's amazing what he has done and what he continues to do.
CROWSON: You mentioned growing up as an athlete playing basketball at Georgetown being athletic your entire life what is it about football that appeals so much to the American audience.
TAGLIABUE: It grew up in parts of the country Pennsylvania, Ohio, Michigan which were coal mining and steel producing and manufacturing heavy, heavy industry. And I used to say if if you were working in a coal mine for 12 hours a day seven, six or seven days a week in the 1920s and getting out on the football field and having fresh air and the opportunity to knock someone down and run over him. That was a form of relaxation. Today it's different in our society what we expect in terms of sports, but the sport grew up in that era of industrial America and it had deep roots in college athletics too that. That's another thing which continues to this day part of the popularity of football is high school and college football. So it has deep roots in communities all over the country. I say it has to do with it's a very complex form of athletic adversity. It's it's it is a form of physical tactical strategic emotional challenge which is unique. And so it's for Americans it's a way of dealing with adversity and admiring people who succeed in overcoming adversity and who get knocked down over and over again but get up and win.
TAGLIABUE: I used to say if you if you go into a room of Americans and talk about Walter Payton you you see what it's about. It's about a guy who carried the ball thousands of times, got knocked down thousands of times but ultimately got up and carried it over the goal line. I think a lot of people like to see themselves as not only admiring that person but having that kind of work ethic and that kind of ambition.
CROWSON: What a faschinating experience, and wonderful conversation. Hope you enjoyed it too! Tweet us @WalmartToday. Or leave a comment in your favorite podcasting app. Also, if you like what you hear, take a moment to subscribe, rate and review this podcast - it helps other people find the show! Thanks for listening to this special bonus episode! See you next time.
CROWSON: I’m Charles Crowson, and this is Outside the Box, the podcast about retail and all things related. And today...is our final episode of our first Season. This has been a remarkable journey, I want to thank you so much, we’ve learned a lot and look forward to returning for Season 2 coming up in 2018. And it’s exciting that this season finale is a deep dive with Ayah Bdeir, the inventor and founder of LittleBits.
Little Bits...are toy blocks that fit together, kind of like Legos. But they’re so much more— snap them together and you get different combinations that create electronic circuits that power lights, music, your own customizable Star Wars droid...and, of course, they’re connected to the Internet.
BDEIR: And so the first thing we do is we design this experience we call the first snap, which is when you first snap the first two bits together, something happens. *droid sounds*
Oh, we’re going to get to more of that later - but what you need to know to start is...it’s nerdy stuff made cool thanks to Bdeir’s vision of making engineering accessible to everyone. Especially girls. And hopefully inspiring those girls to go into science and engineering careers. In fact, I know about Little Bits especially because my 5 year old daughter is a huge fan.
So I was extra excited to get to talk with Bdeir. We started by talking about raising girls without limitations. We went all the way back to her childhood in Lebanon:
Ayah BDEIR: I never even imagined that there was something that I couldn't do because I was a girl or because I was in Beirut. I grew up you know with Lego and with erector set and you know we called them Mecano in Lebanon where I grew up and it was just such a fun, creative and educational experience that it really helped me want to be an engineer. And the way we think about it is these days, the world is no longer made of static buildings and static bridges, the world is fully interactive. Everything is responsive, everything has sensors, everything has a screen, everything has intelligence. And so the building block of today has to be different than a static brick and so that's what Little Bits is trying to do, kind of bring that same playful invention, education, experience to the 21st century for kids that are much more savvy but still have the same kind of desires to play and learn.
CROWSON: So a confession to you here, I remember growing up with Lincoln Logs and with Legos and building and erector sets were getting started, they're not nearly as detailed and capable as they are today. And so when I see Little Bits now, I want so badly to be 8 years old again. Because you've really tapped into something to where not only are you, are you sparking the child's imagination, but then they can see that imagination realized through actual motion... Do you think kids are different today than maybe they were when you and I were young?
BDEIR: At the age of two we see them manipulating iPads, knowing how to work around them and install and uninstall stuff and configure. They are used to using internet of things devices, they're used to being able to talk to Alexa now and all these things and so they're very savvy. But the thing that I find frustrating is that a lot of their relationship with technology is one of consumption and one of being passive. And so I believe it's a missed opportunity. Kids should be making things, they should be touching things. They should be on the floor assembling things together, problem solving. They should be creative. They should be making art, they should be making inventions, and a lot of technology around us doesn't allow for that. So what we're trying to do is continue to be very technologically advanced. Use things like sensors and BlueTooth and programmable bricks, but make them still feel like they're about creation and play and kind of sitting on the floor assembling things together.
CROWSON: Where did this idea come from?
BDEIR: Little Bits is a, is an idea that really came from a very personal experience. I'm an engineer myself, I have a background in engineering and was always feeling very constrained by engineering, that it wasn't creative, it wasn't playful enough and it wasn't kind of open and so Little Bits was kind of my experiment to make it more fun, more playful, and more inviting to other people that are not engineers.
BDEIR: When I was growing up...I feel lucky to have been brought up the way I did. I have 3 sisters and my mom and dad were always extremely supportive of us. Um we never, one thing that I later found out was a special thing is we never were treated like, you know quote unquote girls. And so we didn't have girl toys, we just had things that we were interested in. So we had chemistry sets and electricity kits and my sister got a camera when she was very young because she love filming and so we didn't know that there was a concept of a girl toy and a boy toy, we didn't just play with dolls or dollhouses versus other girls don't get access to things like robots and things. So we were, our parents were very much encouraging of interests. I then went to university and I did engineering. And there was about 8 girls in a class of 88 students. And I realized that a lot of other people hadn't been raised like I was and so in part what we're doing with Little Bits is trying to really kind of replicate this experience and say that if you give exposure to kids of things that they may not have know they're interested in. Like maybe a kid is not already in science camp, they're not already in robotics camp, they're not already leaning into tech savviness, but that doesn't mean they wouldn't be if you expose them and so for us if you expose them through a fun and instantaneous experience, you start to broaden the pool. You get the kid that's not the science kid, you get the you know the young girl that thought technology wasn't for her.
CROWSON: I wanna go back to something you just mentioned. 8 women in a class of 88. What stories did those 8 women share with you about their experiences growing up? Their exposures that may have opened your eyes to a need to bring this type of learning education and play to girls at a much younger age - what stories did they share?
BDEIR: I mean it was really you know eye opening. You know, some of the women in that class had to be really forceful to be able to get into engineering. They had to fight, they had to be activists to be respected. And to have their voices heard. And when they were in class they had to work harder to not be kind of discredited or looked down upon. And so it takes a very strong resolve and so you lose a lot of people in the process. You lose groups that may not be as convinced that they want to do something that maybe are a little more casual. They end up falling out even though they could have been incredible. And so I think we just have to remove this barrier of requiring so much resolve and so much work, and the barrier to entry be so high because you know if you drop the barriers to entry, you're gonna see so much more diversity, not just across gender, but across age, across ethnicity, across you know technical backgrounds, all sorts of things.
CROWSON: if we want to get more girls excited about this stuff, where do we start?
BDEIR: So this is very interesting, we've studied this quite a bit over past couple of years. The, so STEM as a subject is trying to gain a lot of traction. STEM stands for science, technology, engineering, and math. I myself and at Little Bits we believe in STEAM. So science, technology, engineering, arts, and math. And that's the acronym is starting to get traction. Governments are interested in STEM based and STEAM based jobs, companies are hiring for STEM and STEAM based careers, and proficiencies. And we're seeing a lot of demand in the market for these kinds of roles even though graduation rates are dropping in these fields. However, if you start looking at when those drop offs happen, you notice that there's a very sharp drop off of kids interest in STEAM and STEM subjects around that age of 10. So it's really between 8 to 14 where you have the most impact to reel them in before they drop off. And so the sweet spot we found is about 10 years old where kids start by being interested in science, they start by being interested in math, they start by being interested in robotics, but then suddenly they're either getting social cues or their getting you know, media cues or they're seeing fewer role models around them and all these other reasons start to make them self-select out of these fields. It's sharper for girls, but it's still happening for boys as well.
CROWSON: Listening to you talking about STEM evolving into STEAM and that age range, 8 to 14, the sweet spot being 10, Little Bits was, was Little Bits born of this research?
BDEIR: Interestingly not, actually. When Little Bits first started it was for adults. It was for designers and artists and hobbyists. That's initially what Little Bits started as. It wasn't for kids at all. But the very first times I started to take it out to exhibits, and lines and lines of kids would start forming with them like snapping things together, asking questions, laughing, playing, showing each other things, showing their parents things, and I noticed at that time that wow, kids are really taking to this and there could be such a huge impact in helping kind of the next generation at a young age to really impact change on a global level. So we refocused. We're not gonna try to be everything for everyone, we're gonna go in, we're gonna focus on kids and we're specifically gonna focus on this age range and elementary school because it's where we can have the biggest impact.
CROWSON: I think there might be a stereotype that exists with people who have an expertise in engineering that they may not be as artistically inclined. You're an artist aren't you?
BDEIR: Um I yeah I've used that term before, you know not to mean it in any kind of arrogant way, I don't you know work as an artist now, but I really value the artistic and creative side that I have and that people have. I find that the best engineers are artists and the best artists are curious like scientists and engineers. There's just there's a lot of symmetry and synergy and similarity between artists and engineers. It's about having an idea in your head, a vision. It's about being curious and learning new materials or new techniques to achieve that vision, and it's about kind of persistence and grit through challenges that you find during developing that vision. And it's true to artists, it's true for developers, it's true for engineers, it's true for scientists. It's the same kind of grit and curiosity and passion that I think you bring to the table.
CROWSON: You are an entrepreneur with Little Bits and the development of that company first sold, your first piece sold in 2011. Did you ever imagine being an entrepreneur and what are some of the challenges and opportunities you faced along the way there?
BDEIR: I didn't even know what the word entrepreneur meant to be honest before I started Little Bits. It was just, it was an internal drive to do things and make things happen and I later learned that there was a word for it. I still keep the first the bill of the first sale in the office. We have a what we call a museum table and that first purchase from maker faire for the first kit at 89 dollars is in that glass cube because it reminds me of how we started. And it's so that I never kind of lose my humility. And I think that that's a really essential thing in entrepreneurs. I think sometimes you share stories in, or entrepreneurs in Silicon Valley that are arrogant or that are rude or they're bad to their employees or other people and it makes me think you know if you remember how you started when you didn't know anything or you needed help or you work to figure everything out on the fly like you wouldn't be that kind of obnoxious person, it's just it feels impossible by definition entrepreneurs should be humble I think. Um, so but I didn't no I didn't think that I would do it. Um I love it now, we make we see the impact that we're making so it keeps you energized. We were in about close to 20 thousand schools. We have about global chapters and inventor clubs in over 60 countries and we have about 320 of them, these are organizations around the world that are running Little Bits events and workshops and integrated them in their maker spaces, their schools. So when you sit back and you look at this kind of movement that we spurred, it's very it's very exciting, it's very energizing.
CROWSON: Why not Silicon Valley? You went to school at MIT, you taught in New York, you are conducting this interview with me from New York, do you split time with the west coast or do you remain largely on the east coast?
BDEIR: I go often, our investors are in Silicon Valley, but my base is very much New York because if you want to make a product that is universal, you have to be in a place that's diverse. And if part of you mission is to get more girls into tech, you have to be in a place that's diverse. If you, if part of your mission is to kind of open up access, you have to be in a place that's diverse. And so in New York, we have access to such a diverse talent pool. We have 20 languages among our team, we have 40 percent women on the team. We have people that come from fashion or finance or media. Not everybody comes from tech and you need that diversity of thought to create diversity of experiences.
CROWSON: I have a story for you regarding my daughter. She's 5 years old, her birthday is today. Listening to you-
BDEIR: Oh wow happy birthday!
CROWSON: Listening to you describe your childhood and the interests you had, how you and your sisters were, I do have to smile because for my daughter's 5th birthday, she is getting her first chemistry set. She is getting her first microscope. But where this ties into you is we were recently shopping and going through the store and she saw the Little Bits R2D2. My daughter went crazy for that toy. She wants it, she wants it badly, she wants it now. She has asked if she can make hers pink and I've told her she can make it any color she wants. She will be getting her R2D2 for Christmas because we can't give her everything for her birthday, but that toy, that design, that set, it seems to have take Little Bits to a different level for you. Tell me about the experience of working with Disney, working with Lucasfilm, getting that finalized and making it a reality.
BDEIR: Well first of all I want to say happy birthday to your daughter. What's her name?
CROWSON: Her name is Olivia.
BDEIR: Happy Birthday Olivia, 5 is a big year so make it good. So, um so last year we joined a Disney accelerator. Myself and three colleagues of mine kind of packed a bag and went to LA and spent about 4 months in LA, meeting with people within Disney to think about what we could do together. I had realized that we were, you know we were nearing an inflection point with Little Bits where we had, we were talking to a lot of the early adopters and the kind of tech savvy parents but we needed to break outside of that world, we wanna really get global, we wanna you know become part of culture, and to do that you need story. And you need kind of a bigger, a bigger narrative to tap into. And obviously we're not storytellers, but Disney is the world's best storyteller. And so we joined the accelerator wanting to explore different partnerships that we could have. We met with many of them, you know within the different franchises and with the different departments. And then we really circled Star Wars. It's not only everybody's favorite franchise in general, but it, Star Wars itself has a lot of synergy with Little Bits. Star Wars is a story about problem solving and grit. It's a story about saving the galaxy. It's a story about having agency. And obviously the new Star Wars movies have a female lead character because they want to get more girls into the franchise. And so there's just so many good things about it, there's all this technology in Star Wars, there's a lot of science. Ray herself is a thinker. So that felt really good. And so we started to talk to the Lucas Film team about what we could do together. And we had hundreds of ideas of things that we want to do and the Lucas Film team focused us on you know what down to the real fundamentals, what are the things that every kid will want to make. We created the Droid inventor kit. So the Droid inventor kit is a kit that has everything inside of it that you need to make your own R2 unit. The idea is that you make it from scratch, you build it up. You have all the accessories, all the plastics, all the Little Bits pieces to assemble it and the app is your mentor, so Ray is in the app and she's mentoring you through your invention journey. After you create R2, you take him on these missions where you're controlling with your phone with Bluetooth, you're making him drive around, you're sending him an obstacle course, courses, you're sending secret messages to him and doing all sorts of things guided by the app.
BDEIR: And so that's you know the play phase. And then the last phase is called the invent phase which is where you invent things that are completely new. And so we encourage you to go around your house and use household materials like cardboard boxes or milk cartons or feathers and make a droid of your own invention. And so that's where your daughter could make a pink droid, she could make a character droid, she can make whatever she wants because we can encourage that invention, open ended invention process. The product is really resonating. And we've had doors open to us that wouldn't have opened. And that's largely because we were able to have a real kind of compelling Disney product or Disney licensed product.
CROWSON: Do you still play do you play with your products? I know you do.
BDEIR: I do, I do, unfortunately not as much time as I would like. But it's always good to squeeze it in. I have, let me see do I have some of them here? Maybe I can play them.
CROWSON: You carry them around with you? That's great!
BDEIR: Of course. I'll play this for you, I think it will be nice, so I have the bits in my hand. One of the things that we designed very deliberately was the first snap. So it's really important when you're working with kids. Kids have a very short attention span as I'm sure you know from your kids, your daughter, but you have to grab them right away, so you have to get their attention and tell them you're gonna be worthy of their attention for the next few hours. And so the first thing we do is we design this experience we call the first snap, which is when you first snap the first two bits together, something happens. So let me see if I can make that work. *droid sounds*
CROWSON: And that's the sound of the astromech droid from R2, from Star Wars.
BDEIR: Exactly. So what I did is I snapped two bits together, a power bit and the control hub bit and as soon as I snap them together, R2 comes to life, that's the first thing that you hear and it's within a second. *droid sounds* So that kind of you know hooks them in right away and then they can kind of embark on their invention journey.
CROWSON: One of the things that I knew that because and full disclosure, I grew up on Star Wars so I would be what would be what would be probably referred to I mean as a Star Wars geek. I know the sound of the astromech droid, the R2 unit as you just did there. Man that sounded bad. But anyway, I know Lucas Film and Disney are both very protective of the Star Wars brand and of their products. You said you had hundreds of ideas. Beyond the R2 droid are there other ideas you guys may be developing? Or could we tease the possibility of other things in the future?
BDEIR: You know I'm not gonna share that. We have a lot of ideas. What I will say is that we're really invested in this relationship and Lucas and Disney are very invested as well. Disney is now an investor in the company and so it's an investment on multiple levels kind of in the relationship and obviously in the business. And so we're in it for the long haul, there's a lot of things that we want to do together.
Host: That certainly seems like a game changer.
CROWSON: Do you enjoy what you do? Is it as much fun as it sounds, yes. You did say it was a labor of love and sometimes it was very difficult and challenging. But do you really love what it is you do?
BDEIR: I love what I do. I love what we make happen in the world. Sometimes I have to do things that I don't particularly enjoy. I'm not gonna tell you I'm a big fan of doing you know financial reviews, it's not my favorite thing to do. You know I don't love sometimes when you have to think about organizational issues and process and stuff like that in order to grow the company.
BDEIR: There are things that I don't love doing. Sometimes I'll tap into the engineer in me and kind of get excited about the problem I'm solving and so I'll find joy in some of these process type questions. But other times, you know the maker and creator in me kind of misses going back to that. And so I find different ways to do it. I participate in community events. I give talks. I attend workshops. I play when I can. And I want to do more of it, that's something that I want to do kind of more going forward. But on the whole I'm very very lucky to be doing what I'm doing. I don't take it lightly at all. We're not even halfway there to the vision and the mission that we want to fulfill in the world, so there's a lot more to do.
CROWSON: Knowing that part of that mission is bringing the idea of engineering to younger people for the purpose of education and entertainment and play and everything we've talked about through the course of this interview, I have to ask you, are you optimistic?
BDEIR: Well if I wasn't optimistic I would you know pack up and go home. So I'm absolutely optimistic. I think that's another strand of entrepreneurship that you have to have. Optimism is a key key ingredient. Sometimes even naïveté. I'm very very optimistic because when you when you expose kids to the right kinds of content and experiences, they consistently respond very well to it. Consistently. In 10 years of me doing this, less than 5 percent of the time you have a kid that's not interested and walks away. 95 percent of the time, you get immediate interest from the kid and they start to get curious. At different paces. Some of them jump right in. They're snapping things together, they're asking questions. They come up with ideas of what they want to invent. Other kids, they go a little slower, they want to follow instruction, they want a little more support but they still suddenly, kind of their eyes open wide and their curiosity can extend and when they make something, they become proud. So this is not just because of Little Bits, this is because of the theory of learning through making and learning through play. It works, it really does work. And so I'm optimistic because we found what works, not just us and kind of a whole we sit on the shoulders of giants that have come up with these theories. But as a society we have found what works in terms of getting kids to want to learn and learn better. And now the challenge is how do we integrate more into classrooms and after-school programs and homes everywhere. And that seems to me like the easier problem to solve, the difficult problem is when you don't know what works.
CROWSON: We want to know...what was your favorite toy growing up, and what do you think about toys today? Tweet us @WalmartToday. Or leave a comment in your favorite podcasting app. Also, if you like what you hear, take a moment to subscribe, rate and review this podcast - it helps other people find the show! Thanks for listening! This is the end of Season 1, but we’ll be back soon with Season 2 - see you next year!
CROWSON: If you’ve been following the news lately, you may have heard that pretty soon you’re going to be able to pay for things by scanning your face directly into your phone.
VOX: I’m a little scared of the facial recognition stuff. / Kind cool, a little creepy. / My first thought was what if like you have an identical twin that you don’t want to use your phone. That was the first thing I thought of.
CROWSON: Some people are skeptical.
VOX: Being anonymous is probably over now. / Reminds me of Minority Report, society exists on, like, retina scans. Which is kind of scary.
CROWSON: Others can see how it will fit right in with our other modern conveniences.
VOX: I guess to some extent if everyone’s doing it then it’s kind of normal, right? / I thought fingerprints were at first, sensitive information, but I use them every day now. / Biometrics is cool, I mean fitbits are basically that. / The more I use these technologies that feel feel invasive at first, for convenience, the more I forget about the invasion and get used to it.
CROWSON: I’m Charles Crowson, and this is Outside the Box, the podcast about retail and all things related. And today on the show: the future of technology. We’ll hear from two people on the forefront of technologies that seem like they’re out a movie, but are really waiting for us at a store in a future that’s not so far away.
GOURLEY: Yeah I guess on some level the world never really made sense to me so I was always trying to figure out what was going on with it.
CROWSON: That’s Sean Gourley, CTO of his own augmented intelligence company, QUID. He’s also a TED fellow, a Rhodes scholar, and a decathlete. It might be hard to believe he ever felt that he didn’t have the world figured out.
GOURLEY: And you know whether it's building new kinds of intelligences or it's building new kinds of tools and software or you know enabling people to come out and use them and interact with them, it's very much driven by this idea that understanding this world is incredibly important and with that we can do great things. And so yeah that's probably the main thrust in my work and it's probably a common thread going right back to when I was a kid. [...] I remember like trying to understand the iron and I felt like if you turned off the iron it would get cold, but it couldn't quite occur to me how quickly that would happen so I had to touch it to see when it would be cold again, I didn't quite understand how thermodynamics worked and of course I burned myself. But it was sort of a curiosity and a whole range of different things. Although I think my parents will say that I used to stay awake at night as like a five year old trying to solve math equations with a torch under the bed clothes. Which was probably slightly abnormal but I tried to stay awake and solve as many math problems as I could. So yeah I think if it hadn't been for kind of my ability to get out and just run really fast I probably would have spent all my time solving math equations. So maybe I was just sort of lucky and kind of blessed that I could be very good at sport as well.
CROWSON: Sean Gourley has followed his childhood curiosity into the way things work -- and his drive to excel both physically and mentally -- into a fascinating career that uses both skills. His goal? Bringing humans and machines closer together. Now, when we think about artificial intelligence, we often think about pop culture, and the way that films have tried to imagine our augmented future. Stanley Kubrick’s 2001. Ridley Scott’s Blade Runner. James Cameron’s Terminator. These are the movies that shape how people see artificial intelligence. So, I wanted to know -- are those the kinds of examples that scare people about this idea?
GOURLEY: Um yeah that's an interesting question. I mean look people I think are certainly scared whether they're scared because of these movies I think is an interesting question. I think you know if you look at Blade Runner and Ridley Scott you have a very interesting narrative there about what it is to be human. And of course you know the main character you know Deckard in that movie and the sort of the question's always well was he a machine or a replicant or was he a human. Which is fascinating and I think you know people get a little bit scared in that right because the moment you sort of ask these kinds of questions of what does it mean to really be a human, you get into some pretty deep philosophical questions there. I think when you look at 2001 I think you see the kind of the kind of distrust of machines and this idea that they might turn on you. And that of course explored massively in The Terminator when a machine sent from the future comes back to try and you know destroy the past. So it's kind of are machines good, are they bad. Is it scary. On the surface it's all there but once you go a little bit deeper the relationship between us and machines I think starts to become perhaps the most interesting thing that we as a society have to grapple with and for me that's always been a core piece of interest is what is our relationship with these intelligences.
CROWSON: You mentioned Ridley Scott's Bladerunner, that movie was set in 2019 so to pull things out of the fictional world into reality in 2017, with regard to AI, where are we today?
GOURLEY: I think we're getting very proficient at artificial narrow intelligence. Artificial narrow intelligence is building machines that outperform humans in narrow or well defined, well specified tasks. And so I feel a very strong path for artificial narrow intelligence in all sorts of different areas from, I think what we're seeing with the self-driving cars through the kind of automating the production of accounting reports through the kind of automated trading and financial institutions, high frequency trading and the like. So I think there's a very clear path for machines to kind of take those human tasks and do them better than us, cheaper than us, faster than us. That's very very different and very distinct from building machines that are human or building machines that are super human. And I think that's a lot further away; I think at the risk of making a prediction, I think that's plus 20 years, past 30 years at least and that puts it far enough away for us to kind of not need to be worried about building it or the consequences of artificial superhuman intelligence. So we should expect more surprises in terms of what machines are able to do but it doesn't necessarily make them human.
CROWSON: Is there a difference between artificial intelligence and augmented intelligence?
GOURLEY: There's many different kinds of intelligences and you know we tend to think of human intelligence as this sort of multipurpose this sort of human intelligence is general intelligence right. Which I think is actually a mistake. Human intelligence is actually pretty narrow and you only need to look at the behavior of a squirrel; and it'll plant its acorns or its food in a thousand different places and the next springtime it'll come and dig those things back up, it'll remember where a thousand different objects are. And you know in that regard a squirrel's intelligence supersede us. But we like to think of human intelligence as being the sort of you know the benchmark for all intelligence. The reality is it's quite narrow. So when we think of artificial intelligence we tend to think of the mimicry of human intelligence. But I think the reality is that artificial intelligence is actually quite a different kind of intelligence. So then you start thinking about well how do you combine the things that humans can do which is the certain kind of human intelligence with the things that machines can do, which is artificial intelligence. And how do you bring the two of them together to have a higher level or an even kind of smarter intelligence. And that's when you look at augmented intelligence. And augmented intelligence is really about that relationship between humans and machines. to solve some of the most difficult kinds of problems. And then I think that actually starts to kind of blur the lines between what it is to be a human and what it is to be a machine. But to make these separate and distinct I think in the future will be seen as very anachronistic.
CROWSON: It's interesting as you were answering this I began thinking about examples that may exist today that many of us take for granted where this is already beginning to play into our life. And I stopped on Watson, the robot that competed in Jeopardy. There's now an ad campaign around the use of Watson. Is that an example of what you're discussing here?
GOURLEY: The advertisements for Watson are amazing. I think the reality of actually using some of that technology is a little different from the ad campaigns that are propagated. But look if we take that um, if we take the ad campaigns at face value which I think there are many reasons why you wouldn't do that but if you did then you would be looking at an example of augmented intelligence, that relationship between humans and machines as they come together. But I don't think you even need to look that far. You can look very closely at the phone that we carry in our pockets and the idea that any you know any kind of piece of information can be retrieved you know potentially through voice or you know a quick search. And you know the storage of memories through photographs or the ability to run directions from A to B. So we already sort of augment our intelligence by putting a phone in our pocket that takes all of these different capabilities. And as you think about the advancement of that intelligence, more and more will be able to be done by having that intelligence with you at all times. An whether it reaches the um the capabilities purported from the advertisements for Watson, at some point it will and those that have access to that will be able to see the world differently than those that don't have access to it.
CROWSON: What do you see in the next 5 years? I mean I don't necessarily want to go Thiel's route of the flying car but what do you see between now and 2022?
GOURLEY: I think we will get flying cars. I think they'll look like very large drones that you can pilot using huge amounts of AI, but for the most part we can fly them as a relative novice and maybe you'll get half an hour of fly time on these kind of oversized drones and away you go. I think the other thing that comes through is what we're seeing I think in the technology around AI and that is getting more applications into enterprise. But you know we're seeing all sorts of jobs being able to be replaced and automated and you know I think the ability to kind of, the exciting thing there is the ability to kind of build intelligences that are different than us and they're gonna see the world differently and so to me when you create a new intelligence, what is it gonna say about the world that a human intelligence can't see or can't understand and it's gonna be able to tell us things about the world that we've never seen before. So I think some aspect of virtual reality but just again it's hard to see exactly how that's gonna manifest itself. I don't think we'll have, we've got a clear idea where that's gonna go. Again the hard bit of all this stuff is to kind of say we know it's gonna be big and we know something's gonna emerge in that but what exactly. And I think when you look around the Valley you have hundreds of people trying to figure out that question. But I would say probably as a bridge towards that I think augmented reality, the layering of the virtual onto the real you know the new technology we've got coming out with image processing I think there's a huge amount to kind of really layer the virtual world onto the real world and that seems like a huge platform that a lot of people can build on. So you know perhaps we'll see a bigger advancement into kind of augmented reality before we'll see virtual reality fully realized.
CROWSON: Applying this and putting this in the world or retail, how will consumers be able to benefit from this in the years ahead.
GOURLEY: I think a lot of issues there are around this idea of having to make decisions, right. And the cost or the tax intellectually of making decisions and there's some really interesting science that looks at that. And the more decisions you have to make to kind of balance budgets and allocate your money and resources, there's actually less cognitive ability you have to make other kinds of decisions. So when we think about retail one of the things you start looking at in the future is you know how do you build intelligences that can work for the consumer to kind of buy the things that the consumer would have bought. Or at least the ones that they're not gonna achieve a lot of joy from buying. And so the idea of subscription becomes very very important. The idea that things just show up when you need them. I think with said of AI is making decisions about when you need something and what you need and having that show up, it'll be I think for a lot of consumers very very refreshing to not have to make those decisions and all the kind of cognitive overhead that goes with that. Now there'll still be some decisions that humans will make in person and they'll want to make them with deep thought and there'll be some sort of joy in that. But you know a lot of things I think a lot of consumers would rather a machine took care of that, provided the machine is working for them. I think if they felt as though the machine was trying to take advantage of them then perhaps they would feel a little differently. So again that issue of relationship and trust that goes with it.
DOUGLASS: I had two boys that play baseball. In the summertime if I wasn't at work, I was at a baseball park. So for me to get something delivered that I needed, it would have been great if it showed up at the baseball park. I think the future of how retail works is you'll give it to me where I need it, where I want it, and just in time.
CROWSON: That’s Tom Douglass, and he’s got a really cool job title.
DOUGLASS: So I'm director of emerging technology in lab 415C at the Walmart technology center here in Bentonville.
CROWSON: Tom’s work, and the way he thinks about augmented reality in retail, is fascinating to me. He is working on a future that isn’t so far away.
DOUGLASS: I don't think you'll see people shopping for certain items anymore because those items will be at their house when they need them the day before they need it. I set up an avatar that thinks about all the things I think about when I'm shopping and it takes care of that for me. You know it's gonna be interesting from a marketing perspective. Do we market to a machine or a human being? 'Cause the machine may be doing a lot of purchases in the future. That saves me time and effort. Whatever my values are as an individual, my avatar is gonna dictate how those purchases happen so that it saves me the most effort. Because I really want that effort directed more towards my family or towards that things that I enjoy, not necessarily shopping for replenishment. Now there's two kinds of shopping too I think that you're gonna find. There's the replenishment shopping which everybody views as boring.
DOUGLASS: I don't want to call out products because I don't want anybody to get mad at me but there's things that you buy every week that you could do without buying if it just showed up. And then there's the social experience of shopping where you go out and you go out with your friends or your family and you're either trying clothes or looking at sporting equipment or do whatever it is that makes you happy. That is quality time that you would rather have more of while you're not shopping for the things that are day to day necessities. And I think that's how the shopping experience is gonna become. I think retail-tainment takes on an entirely different meaning over the next five years.
CROWSON: Retail-tainment is when retail meets entertainment, like when a Star Wars character shows up at your local store.
DOUGLASS: It's an old term that's gonna make a solid comeback. It may not be the same term anymore, but it's gonna comeback hard.
CROWSON: So I'm gonna ask you again, what do you do?
DOUGLASS: I get to look at all sorts of new technology, talk to up and coming technology companies and figure out what applies to Walmart, our customers, and to the enterprise.
CROWSON: To imagine it, it almost seems like you're in this bunker about four floors down and it's a completely sterile atmosphere. What is it like over there?
DOUGLASS: Actually it's a lot of fun and it's not as sterile as you'd think it would be. We get a lot of folks in there from suppliers from technology companies, internal folks that just wanna come and see what's happening that's new. We have a lot of fun. You can't do this job and not have fun because many times you have to either say the word no or hear the word no about something that you think it really really important or really really fresh. And if you can't do that and have fun with it, it's gonna be a long day.
CROWSON: Our lives now come down to this. Which I'm holding up a smartphone for our listeners. Everything we do from sun up to sun down and even after hours in many instances, all goes through our smart device. So that would require you guys to begin thinking younger and younger as well. Wouldn't it?
DOUGLASS: Yeah, it does. And we have a good age range. Anywhere from about 24 to me, who's the elder right now. But the real interesting part is when we bring in different people. So in the lab and in emerging technology, we've brought in high school classes, and freshman and sophomore college classes to look at different things that we're doing. And honestly, if they say it's not cool, we don't do it because that's the group that's coming up. And if they say it's cool then we really focus in on that and try and get that out there for everybody.
CROWSON: You say you have to either be used to saying no or hearing no. How many pitches would you say in a thirty day period, or innovative ideas which might then turn into pitches do you guys hear about? How many are you approached with?
DOUGLASS: So we're approached with thousands. We generally measure ourselves in diving deep into about seven hundred a year. And then we take those and we actually score them based on relevancy to strategy and whether or not it's something that's viable and likable by the shopping community. And we get that down to about sixty, seventy ideas that we spend the whole time focusing on, so.
CROWSON: So you average close to two a day in a calendar year and then you narrow that down to sixty.
CROWSON: How many of them of the sixty— and of course we don't want to divulge any trade secrets here— what is one that you say that has the coolness factor that you can tell us about?
DOUGLASS: Oh wow, so there's a bunch of things going on in AR, VR, robotics, and AI. It's a little bit interesting, I can't talk much about any of them. Because a lot of them are just now entering the market and some of them, the T's and C's aren't done on the contract yet and I can't even talk about them. So it's hard, but just know that all the technologies, blockchain, robotics, virtual reality, augmented reality, artificial intelligence, all those things are what's playing into what the retail of tomorrow looks like.
CROWSON: How do you describe this when you're at a dinner party? When you're out with friends or meeting new people and they say, so you work for Walmart, what do you do?
DOUGLASS: Well I tell everybody I got the best job at Walmart. And the reason I have the best job at Walmart is because I get to talk to all the associates that I can. I get to talk to all the customers I can, and I get to play with every new technology that ever comes out. And I get paid to do that. So I don't know how much better it can get than that. I get paid to play with things that people are gonna want to use in the future and see if it actually works.
CROWSON: Do you find yourself working often from the position of being like a startup, with a startup mentality?
DOUGLASS: Yeah, so that's the fun part about it, because there's a lot of energy in a startup. And I don't want to confuse the startup mentality with speed. It's more about enthusiasm. We often confuse the startup mentality, the startup nature with being quick. It's not quick. You know, a lot of these folks have been working ten years or more to get their idea to a point where someone will actually accept their pitch. And I think I have to be really understanding of that because these people put their life blood into it. I mean I know a guy that came in and pitched to us that it was him and his dog and he named the company after his dog. That's the only two people that were in the building for him. So these people work ten years or more to get to a point where they can present to a company. And we really gotta treat them with respect for that and understand that their life savings, their blood, sweat and tears are on the line when they come here. So it's really, that's why it weighs on me when I have to say no.
CROWSON: Just out of curiosity, what was the dog's name?
DOUGLASS: I can't tell you because that would tell you what the company is. But nice try, I like that.
CROWSON: Is “no” sometimes not right now or is “no” sometimes, “have you considered this”?
DOUGLASS: So I think it's both. Sometimes it's your idea if you're willing to be flexible, true north on your idea's a little bit left of where you are. And if you're willing to be flexible we can take that idea further. Other times it's not necessarily about when you're ready for the customer, it's about when the customer's ready for you. Wearable technology is a great example of that right now. Not everybody's ready for glasses where they see the world differently. It's coming, but they're not ready for it yet. Everybody's ready for the watch that tells me how many steps I take and that was an idea that was kinda shaky a few years ago. Why would I want to let people know how many steps I take everyday. Now you have competitions on your phones with your friends and neighbors and family to see if you can actually beat thirty thousand in a day. I think the thing we have to keep in mind is what's creepy today is mainstream tomorrow. I mean ten years ago, how many of us would have said that I'd absolutely bank on my personal device. Now how many of your bank writing a check and doing anything else the way we used to do it ten years ago. I know I don't.
CROWSON: Okay so you talk about the cool factor as it relates to things you look for at the lab. What are the other criteria though that have to be met to reach your standard?
DOUGLASS: That's a great question. We actually have a scoring system that goes into does it look at the strategy, does it have a stakeholder that is interested in improving that factor and whatever that is. I think what's really neat about the cool factor is the cool factor and the creepy meter are kind of the same thing. If it's creepy right now, it will be cool eventually. And so what's fun is when you're in a room with a bunch of executives and you start talking about a technology and you see them all back their chair up a little bit and get that kinda weird look on their face, you know you've hit a home run, they just don't know it yet.
CROWSON: Let's put this to the test. Something that met the creepy factor five, ten, 15 years ago that today is now accepted. Go.
DOUGLASS: So the idea that your car could tell you when your prescription is ready at the pharmacy. I had one executive absolutely lose his mind over that. He says there's no way I want my car telling me that. What if I have my boss in the car and it says this and that and the other thing. I said, okay just because you have your high blood pressure medicine on alert at the pharmacy doesn't mean your boss caused it, and number two you can set it up so that it's only when you're in a car by yourself or when family members because we can actually do some things. I think the other thing that is coming along that is really kind of creepy still but is going to be interesting in the future is the idea of identifying a person through their face and letting them pay for product because we know who they are. Yeah you just got that same look the executive got on his face. The idea being that facial recognition—
CROWSON: There are so many directions that can lead us though and it's not superstitious and it's not the unnerving side of it. That can raise some real problems.
DOUGLASS: Okay, so let's do the question a different way. Today, you put your thumb on your phone.
CROWSON: And there are people that don't want to do that.
DOUGLASS: Yeah but that number's shrinking.
CROWSON: Creepy to normal.
DOUGLASS: Creepy to normal. So is facial recognition for payment process that creepy? I mean it is, I know it is. But think about it, you could literally walk up to a camera and pay for everything just because we know who you are.
CROWSON: Earlier in the show Sean Gourley told us that there are many ideas that come out of movies. And certainly facial recognition is one of those! But I wanted to know from Tom, where do those inspirations come from beyond that?
DOUGLASS: So what's great about this job that I have, this role is the fact that you get to go out and talk to customers and associates. And you talk to them about what would make their life better. And there's a lot of different things that they come back with. And there's even companies that are trying to solve very specific problems with what those routines are. And they come back with some really interesting and some really great ideas. Now some of them are possible today, but they don't give you that step function change. Some of them are not even possible yet and you've got to sit down and say okay how do you make that possible. There's great ideas that are born in a garage or born on a jog down the street. How you cultivate those and incubate those is what's the fun part of the job. But you have to be able to reach out and talk to people.
CROWSON: Do you have any new ideas you think could be reality in the future?
VOX: Harry Potter and teleportation that would be sick / Ok in Westworld they have those tablets, they are paper thin. I want that. / I would to be able to like time travel, travel distances, beam me up scotty. That would make my life easier.
CROWSON: Tweet us @WalmartToday. Or leave a comment in your favorite podcasting app. Also, if you like what you hear, take a moment to subscribe, rate and review this podcast - it helps other people find the show! Thanks for listening! See you next time.
CROWSON: I'm Charles Crowson and this is Outside the Box, the podcast about retail and all things related.
CROWSON: Today, we’re talking about a bit of both -- the retail and the related. Specifically, about the disruptions in technology that are changing the retail landscape day by day. The way you shop, drive, connect. Traditional retailers need to move forward with change, or get left in the digital dust.
CROWSON: In this episode we’ll hear from two people who are on the front lines of the retail landscape -- and really understand what shopping and consuming will look like in the next decade. The kind of stuff you and I could only dream about? They know it’s coming.
OWYANG: I don't consider myself a trend spotter, I'm just trying to help large companies connect to their customers. And it is a passion to just track these technologies. I just think of it in that way.
CROWSON: Jeremiah Owyang is a founder of Crowd Companies, which identifies future trends that big businesses should pay attention to -- and how those businesses can adapt.
CROWSON: You have a four year old daughter, I too have a four year old daughter. It's easy for me to explain to my daughter what I do, in fact sometimes she comes to the home office and has a desk right next to mine. How do you explain to your daughter what you do?
OWYANG: It's very challenging. She thinks I talk for a living.
OWYANG: And we just kinda leave it at that. She's seen me present at conferences and she doesn't quite understand it but she just knows that daddy talks for a living. And that's as far as we can go right now.
CROWSON: But he does so much more than just talk for a living.
OWYANG: At Crowd Companies we identify future trends that big businesses should pay attention to. Some of those trends include things like the collaborative sharing economy or autonomous technologies or even my latest report on blockchain. And we're trying to help big companies figure out what are they gonna do with it.
CROWSON: With those trends, seeing those trends, some of them before they even become reality, what was the first one you really noticed where you realized, okay the game is changing.
OWYANG: After the rise and maturity of social media which was peer-to-peer media where people could share content with each other, the next phase, and I was looking closely, was peer-to-peer commerce. And we saw this small little tiny startup that enabled people to do something my mom told me never to do: was get into a stranger’s car. And another startup said you could get into a stranger's house. Another startup said you can get products from other strangers. My mom taught me to never do those things but now with new technologies such as reputation systems and apps and marketplaces, I was able to transact in this collaborative sharing peer-to-peer economy in using startups like Lyft, Uber, Airbnb and a whole host of others.
CROWSON: Where did this all start for you?
OWYANG: I live in Silicon Valley so I always have been around technology and I like to be right in the middle of customers, technology, and business. That is my sweet spot where I can be between those three and I can figure out how do I connect them all. And that's the route that I will continue to take as new technologies emerge. I will always look at the next trend and make sure that big companies can continue to connect to their customers using these new technologies.
CROWSON: It seems like this is, these technologies through e-commerce and the peer-to-peer move you were talking about, it seems like this evolves on an almost daily basis.
OWYANG: This industry is pretty young, most of the startups in the space are just around 8 or 9 years old. Now what happened was this moment in time where three things happened at the same time. Societal factors, economic, and technological. All around 2008, 2009, we saw that people were focused on sustainability and they wanted to transact locally, they wanted to get things from each other and Millennials were coming of age. Economically, this was the trough of the recession, one of the worst that we've seen in generations and people needed to save their homes, people were losing their jobs, people were foreclosing. It was a scary time not just in America but beyond. And then lastly, this was just a few years after the birth of the smartphone and we saw the rise of apps emerge and cloud-based services where you can connect to online systems. Social networks were here that enabled you to get trust data about people that you might be interacting with. And the mobile devices enabled you to put in your credit card and do payment systems. All three of these things, societal, economic, and technological enablers all birthed at the same moment and we saw this new industry emerge that we're all using on a daily basis today nearly 8 or 9 years later. And so the world has changed the way we did things. But it's not limited to just sharing. This also includes things like crowd funding, websites like Indiegogo or Kickstarter where the crowd is able to fund new products and we see new things come to market. And we even see the maker movement where regular people are empowered to 3D print or to prototype things without having any product or engineering type of capabilities. We've seen products like square, the small device that you can do electronic payments with at a local level, or even making foldable kayaks, have emerged out of maker spaces. So the way that we even think about commerce and the supply chain and retail and delivery and transportation, it has all been profoundly changed by this movement, this collaborative sharing on-demand economy.
CROWSON: You now help companies try to find their way and map out strategies in this evolving world. What are you finding now as they're getting ready or taking those next steps forward.
OWYANG: Yes that's a great question. So social media and this sharing on demand economy was just the beginning. And what we found was there's a whole series of new technologies that are emerging at a rapid pace. So we are just 2 to 3 years away from self driving cars being available from a majority of car manufacturers. We're seeing that autonomous vehicles will be changing society in every particular way.. I'm even exploring trends, the next phase could be around transhumanism, when we start to see these technologies embedded in our bodies. Wow that sounds so crazy and foreign and alienesque but it is the next phase for humanity.
CROWSON: What was your first job?
OWYANG: My first job...we’re talking before college...I worked in retail and that was a wonderful experience. I got to learn customer experience, managing my till, yeah till and all of those things and that was a wonderful, as a seasonal worker. And it's interesting to see that we're already seeing some of those jobs might become automated. Another job that I had was I was a gas station attendant. That will definitely go away as we see self charging electric cars emerging and we're seeing those types of recharging beds emerge from the prototypes from Tesla already. So those are two jobs that I didn’t have, the third job which I think will still be around is I was a piano instructor through college. And so that, I was a jazz piano player. So I think we'll see a rise in the humanities when other things become automated.
CROWSON: It was so interesting to hear how jobs that Jeremiah had in his past could be changing so quickly. It sounds like science fiction...but it’s not. So I wanted to know what we are seeing now...and how Jeremiah expects that to evolve.
OWYANG: Right now things are being delivered on demand through human drivers or couriers. Lately I've been seeing self driven drones deliver goods. There's a company called starship that's a 6 wheeled robot in New York and San Francisco area that's delivering food from local restaurants to business owners and to homes in densely populated areas. So that's the next phase. We're also seeing that people want to experiment with drones for delivery although the FAA has kinda put a kibosh on that. But the phase after that in 3 to 4 or 5 years we will see that self driving cars will be a form of on demand delivery. So that's on the logistics side. Additionally we will see the rise of virtual and augmented reality emerge. We'll see some of the technology platforms where at Samsung, Google, or Apple or other to launch it. But a dominant version that would take over the mobile phone. The mobile phone will be put in your pocket and stay in your pocket. That will be the next phase and there will be a digital overlay of technology around you. In addition to that we'll see that these machines will continue to in the next few years talk to each other and there'll be more information and they will become more intelligent. And really seeing the rise of artificial intelligence systems from many of the technology players from Watson to Siri, to Google now and beyond. So those are the 3 big things in the next 3, 4 years that I anticipate happening. Those are the immediate things that are not science fiction. They are on the product roadmap now.
CROWSON: You have mentioned the automobile industry now regarding this and things they're doing to adapt. You mentioned self driving cars. What else is the auto industry doing because it seems like in that area, in that arena specifically the consumer is speaking in ways of getting around those large car payments.
OWYANG: There was an article from a major magazine that the title was that the love affair with the American automobile is gone. And I remember growing up in high school in the 90s and I could not wait to drive. That was, that was freedom. But now we're seeing that this next generation, these millennials or younger, they don't have that desire. They don't want to get their driver's license, they certainly don't want to manage or maintain a car. Now what about their auto manufacturers. Well they're doing a lot to transform. In particular I like to talk about Ford and BMW as really being leaders in this space. In my opinion, Ford has done the most innovation in this space. They are leading the way with self driving cars, they are testing in Detroit, Michigan in the snow, which is a very difficult thing to do. They've acquired startups like Chariot which is private on demand crowd sourced buses in urban areas and they rolled out even bicycle sharing in San Francisco last week. They are truly trying to become a mobility services company. They are even developing apps and eventually they'll figure out ways where you can order a Ford on demand, maybe it's self driving or human driven, through some of these technologies. The other one is BMW. In Germany and in major cities around the US you can actually rent a BMW, a one series or an electric car on demand, pro rata, per hour in a membership model, it includes insurance and miles and charging and even parking solutions and beyond and it's called the Drive Now program. And they're really changing their business model where you can rent the car in certain areas and for certain types of demographics rather than own it. So they're already making that change. And they told me in Germany where this is rolled out in scale that the program is actually profitable. They make more money renting an individual car than selling it outright.
CROWSON: Earlier in our conversation Jeremiah spoke about the ONE job from his past that should still require a human operator: piano instructor. I wondered if these jobs will become more important to us because of the automation we’re expecting in the future. Skills that require a human touch.
OWYANG: So any role that is repeated will be automated. Any role that's repeated or repetitive will be automated. We already see that in the supply chain, we see that in the fields in the farms. We see that in manufacturing. We see that where we're seeing cars, they're doing these things. We're seeing this in restaurants. The things that are not easily repeated are things that require human interaction. Whether that be a psychologist or a therapist or somebody that can talk to you or listen to you, or might be the arts and the music and society. Or people studying history, or anthropology, things that are softer in nature. It'll be interesting to see. For the last few decades it's people that have a degree in the humanities where liberal arts say that very quietly. But in 10 to 20 years they may boast that from the tops of their lungs because that will be the most important skills that society will need.
CROWSON: Interesting. To the optimistic side. How can we put people’s minds at ease? This is a topic or these are topics that scare people in a number of circles in corners of the country.
OWYANG: Yes and there's a whole political aspect that can be discussed on this too. I mean because they're gonna determine the regulations and this impacts workforce and this impacts H1B visas and this impacts middle America, this impacts coast, this impacts older and younger. The fallout from automation that is so broad that it, we should not be scared because this is the future. So the technology companies are not going to slow down. And even if America's government asked the technologies to slow down in automation through regulation that's not gonna stop other nations from doing it who are becoming quite advanced. There, it would be a competitive disadvantage to slow down technology adoption in America for some of these reasons. So we cannot hide from it. We have to look forward, we have to move forward and even the top leaders in our country need to look at this as a competitive advantage. The fallout from even the amount of workers that could be displaced and the impacts to taxes and to voting and civil unrest could be quite significant. This is something that we can't turn our heads from.
CROWSON: Thinking about the future economy...about how to move forward and value people in jobs...and what the next wave of tech will look like….is something on the mind of Walmart’s Chief Technology Officer Jeremy King. As you might guess Jeremy has a huge job -- evaluating which new technologies would be beneficial to the Walmart experience, whether that’s for customers, or for associates and suppliers.
CROWSON: To explain what you do to a layperson how do you describe it because it is so technical and it is so heavily involved to levels we probably don't understand.
KING: I typically when I tell somebody first what I do all day I say, or what my job is, I say I'm responsible for all the computers inside a Walmart store and I'm responsible for making sure you can buy things from Walmart.com on your phone or when you're at your house. And that usually is enough but you're right it just unbelievably scratches the surface. And most people can relate to the customer view anyway. The register and the iPhone and the app and the website, they can see that. What they don't see is the massive amounts of logistic systems and pricing systems and item onboarding systems that you have to do in order to run a retail business. And that's a fun part.
CROWSON: Tell me about your mom and dad because I understand they have very different backgrounds.
KING: Yeah my dad was 37 years at IBM, a field engineer hardware guy. We spent a lot of, all of our summers and every spare moment was building cars or building houses and we bought a dilapidated house and basically rebuilt it while we were living in it so I got a lot of the love of building things there as well. My mother, artist, the opposite side of the wall. So she really, I remember spending time in the summers up in the art room and we had access to stained glass and rubber stamps and huge painting and all the things. She's done every medium, she gets bored easily so she was doing metal crafts work for a long time, she did wood for a bunch of times. She's an amazing painter and artist as well. So that definitely was probably how I got here.
CROWSON: Left brain and right brain equally represented.
KING: Totally. It was great.
CROWSON: It seems like to really get to the heart of what we are talking about with you Jeremy we have got to go into the past. I mean we've become conditioned as consumers that everything comes from the palm of our hand. And as the world's largest retailer and one that is now merging the physical with the e-commerce side, we're marrying the two. Then I start thinking about, well what was it like when you were ten years old? There was still Walmart. There were still retailers. Sterling’s was still open when I was 8,9,10 years old. Normal local grocery stores. And it was a very different process. What do you remember from consumerism 20 years ago 25 years ago?
KING: It's an interesting question. I grew up in the country outside of the suburb or Silicon Valley and my first job was really picking weeds at the Christmas Tree Farm next door so that was a classic day laborer, but my first real job that I actually drove to and I actually got a paycheck from was working at a drugstore actually. It was a company called Payless and I got to be on the team that grand opened the store and we put all the items on the shelf for the first time and I really, retail was my very first job really. And the funny thing is a lot of things haven't changed with I think about pricing and the way that we distribute products from pallets to cases to eaches to the e-commerce facilities or to the store.
CROWSON: Eaches – that’s retail speak for indivdual items,
That part hasn't changed. What you see at Walmart is just scale. Massive amounts of scale. And I think when from a consumer’s perspective, I think about this a ton because as you mention the iPhone or the phone actually changes everything. And people are obviously wanting to make sure that they marry the relationship they have with their device with their local grocer. Their local supercenter. And it's really trying to figure out how to show them that there's this breadth of items. There's 200 thousand items right down the street from you but there's 50 million more items that you can get there if you just have a relationship with us. So I also talk about my bike parts and things like that that I order from Walmart.com but I pick them up at the store. Most people don't get their head around that yet. They're still thinking specialty retailers and that sort of thing and I think that's what really the internet has changed. You have access to everything but you don't have to technically work with 50 different vendors anymore.
And I think all the retailers back in the early 2000s went through this phase of what to do. They all either bought a little startup or started a little company that they incubated out in Silicon Valley most of the time. And frankly that's partly how Walmart.com got started and frankly that was a lot of the problems with it. Because it started separate and as a result systems were built separately and from a customer’s perspective, they don't care that Walmart.com is separate from Walmart stores and they just want a single relationship when they're looking at their phone. Like hey can I get this in my store or can I order it tomorrow? Can I, I want to know is it available in the store right now and if Walmart.com doesn't have that data then who has that. Is Walmart.com showing me what's in the store or what items I can buy online. And in the end the customer wants both of those things. And that's where the first few years of all the retailers going through, of having separate sites from their stores really opened it up for pure play retailers to come in and really make a headway to the customers.
CROWSON: What excites you? The things you are privy to on a daily and weekly basis.
KING: Yeah there's so much going on in the technology space now. There's a lot of buzz word lingo out there, IOT, machine learning, artificial intelligence, robotics, and these sorts of things that everyone's talking about. And we're just talking about this last night at dinner, I think what's gonna happen is a convergence of all these technologies coming together that are really gonna change the experience. 3D printing comes up all the time and how that's gonna go. What I'm really interested in lately has been what a lot of people will know as optical recognition. Today in order to scan something you really have to look at a bar code and that technology is pretty old at this point. And we have scanners that can do that. But if you can look at an item and know what it is just by its label or by some other tagging device, you could make the shopping experience much much simpler. And not just the shopping experience but also the logistics experience too. Like how many items are on the track, when are they getting there. Are they staying cold, are they the right temperature. All these sorts of things you can see coming true if you change the way you think about labels and the ability to see items in a sort of a camera way. And the great part is a lot of these stores around the world already have cameras there and they're getting feeds. And people pay a ton of money just to understand shopping behavior and traffic. Where are customers going and that sort of thing. And what you're seeing is a lot of companies that are taking the first generation of this was watching for bad guys in airports and things like that and now you can see it's so much more advanced and cheap that you can apply it to a retail environment.
CROWSON: What are you most excited about in the next 5 years, 10 years. You choose.
KING: I love the prospect of turning the stores into essentially mini showrooms if you will. We can carry a lot more items if we didn't have to carry 50 of them. So, as you see our logistics network get not only faster but more efficient, we can carry a lot fewer items, total quantity of items in a store but a lot more items. And items that people want to pick up and touch and feel before they try it. And sometimes big items like maybe washing machines or refrigerators and things like that where you want to have a couple and you can get it to the store the next day. And that I think is really gonna change the way people shop for things like patio furniture and big things that they want to actually sit in the chair and figure out whether they like it or not. So I'm excited about those kind of technologies that allow us to use the power of our overall network. But massively expand the item collection
CROWSON: What would you say to people though who are, what would you say to people who are afraid of it?
KING: You're seeing there's a lot. My parents, my mom in particular was very afraid of this because she thinks it's gonna be used for evil. What we're seeing now is, yes there's been some examples where the government has gone and overstepped their bounds but I think as we grow up and we see folks who have been used to this for a long time, they're caring less and less about this. And maybe that's a bad thing but also I think it's because people are aware that's happening now. In some of the antics that we would do when we were in high school today you would never do today because there's video cameras everywhere. You know, people got their cellphones out in five seconds and some of the stuff we got away with but kids know that now. And people know that. So to me it'll be a boundary of, tech is constantly pushing the boundaries and policy and public policy will push back on it when it's appropriate.
CROWSON: And I think one of the biggest misconceptions was the technologies you're talking about were gonna be for younger generations. My parents are in their mid 60s. They use this stuff.
KING: Oh yeah, my dad is an avid Walmart shopper as you can imagine in Morgan Hill where I grew up and he's in there showing people how to use Walmart Pay and he's like, why would you write a check, you can use Walmart Pay. Things like that. And he's an 82 year old guy walking around. He's always been a technologist to it's a little big of a disadvantage but I see that. We get letters from consumers all the time that are, would be classified as people who are afraid of technology that love it. And it makes it so easy.
CROWSON: Technology is changing fast – Jeremy King AND Jeremiah Owyang know that well. They also know that it can seem scary at first ... but more than anything, it is full of possibilities. And I for one am excited. What do you think? We want to hear from you -- Tweet at us @WalmartToday. Also, if you like what you hear, take a moment to rate and review this podcast - it helps other people find the show! Thanks for listening! See you next time.
CROWSON: Think for a moment about the clothes you’re wearing. The car in your driveway. The food on your plate. Where were those things made?
VOX: Um, probably China. / I know this was made in America but I can pretty much tell you the rest of this stuff was not.
CROWSON: Some of it is made right here in the US of A. A lot of it is made overseas -- China, India, Vietnam. But, there are still LOTS of companies committed to making their stuff here in the United States.
VOX: I’m trying to buy my clothes locally, I try to get them from local designers usually. / I’d love all my clothes to be ethical if possible, but it’s very hard to find things that I can afford.
CROWSON: I'm Charles Crowson and this is Outside the Box, the podcast about retail and all things related -- and we are made in the US of A. And if you like what you hear, show us some love by leaving a rating or review of the show!
VOX: Made in America / Made in America / Made in America
CROWSON: Today, we’re hearing from folks who make and process all kinds of things you enjoy right here in America -- from the bed you sleep in, to the tools you use to improve your home, to the seafood on your dinner plate -- and WHY it is so important to them. For some it is patriotism, others sustainability, or financial reasons. One person committed to American made is Jarvis Green, the Patriots defensive end, and a two-time Super Bowl champion. He played under Coach Bill Belichick.
CROWSON: Was he that intimidating or was he that?
CROWSON: Go ahead.
GREEN: You know like when you're a kid and your dad would give you that look? You don't have to say anything at all? That's Bill Belichick. And he demands respect. Everybody followed the rules. Everyone.
CROWSON: How is he similar or different than Nick Saban?
GREEN: Coach Nick? He was more in your face, screaming, spitting on ya. He's always, uses a lot of his hands when he's talking all the time. So he could be right in your face just screaming. Coach Belichick never raised his voice, he'd go behind you, back of your ear, whisper some things to you. Turned to stone. Big difference.
CROWSON: He got his start in football as a kid, where he learned some early lessons about commitment:
GREEN: I started playing football in the 7th grade, I quit the first day of football. I wasn't this big guy you see right across from you. I wasn't this big. Maybe 140 lbs in the 7th grade. Soaking wet. Quit the first day, but I went back out because my coach he passed away. Coach Rabalay. Back then it was different. I mean the coaches were like parents. You know, they could do whatever they want to really to get you back on the field. And I remember coach said hey what if I tell your mom or your dad or your brothers. because my older brothers played football too. And when he said that my eyes lit up. Please don't tell them anything. I went back out there and I had to tackle this guy. He was my cousin. He was twice the size of me. He had a full beard in the eighth grade.
CROWSON: We all remember that guy by the way.
GREEN: And when the bell rung. I had to go tackle this guy with the full beard every day in the 7th grade. I dreaded it. 2:25 I'm looking at the clock. And I walk slowly as possible to the locker room, put my pads on, we had tackling drills. Hey Green get up there. Every day. 7th grade. So I tell people today that all this thing I've done in football, Super Bowls, I quit the first day. That was the last time I quit ever. Anything in my life after that day.
CROWSON: Today, he’s also the owner of Oceans 97, a proud made in America shrimp wholesaler.
CROWSON: Now being from Southern Louisiana, seafood's just in your blood isn't it? Just something you know.
GREEN: Yeah, yes it is. I was just growing up right by the Mississippi river, just having access to everything. Crawfish, fish, I mean even just frogs. Is frogs considered seafood?
CROWSON: Probably. Frog legs are a delicacy in some areas.
GREEN: Yeah it is. You know, so just growing up. But I was, I was entertained growing up. My mom, my grandmas, my sister, I mean we all cook in the house. My sister's a chef. She was always in the kitchen as a kid. You know if someone was cooking something, you had your finger ready to stick in a pot. Just to taste it. Oh mom that's good. Let's go. Everybody ready to eat? You know. And just doing that entertaining. I remember in high school we used to throw parties and charge 10 bucks to get in. You know and do a potluck. People supported and when you saw people smile and just happy, that was more like a drug to me. Just entertaining people all the time. Like today it's 2017. If somebody asked me what are you gonna be doing at this time, I never thought I would be in the food industry ever.
CROWSON: You didn't? Because I was gonna ask. I mean to play professional football, to play division one college football, that is as much a dream as a goal. But if you were to say you always knew you'd be in the food industry, I wouldn't be that surprised.
GREEN: No. Look, I went to school for engineering. I graduated 2002. I always wanted to create something. I wanted to build something. And just creating. I mean food's the same thing. You're creating something for the customer to enjoy. It's the same philosophy, but food no, never.
CROWSON: You're a nutritional engineer.
GREEN: Kinda. But hey, add butter to it. Tastes great.
CROWSON: What was it about engineering?
GREEN: I loved it. But when I retired, I wanted to do something different.
CROWSON: You wanted to do something different. Is that where Oceans 97 came from?
GREEN: Well yeah, yes it did. I was doing construction work. I was like tired, just like bored, you know. I'm on the couch in Baton Rouge. Take the kids to school here and there. Doing daddy stuff. I have a friend who said hey Jarvis. He said yo I have family and we have about 90 employees. It's a shrimp company. I have about 800 shrimp boats. Would you come and help us sell some shrimp. I said really. Like where in Louisiana? And he said no in Boston where you used to play football there. I said oh smart. But I don't know anything about shrimp. He said we will teach you everything. I met with some of his family friends that owned the business. I worked 6 months for free, And then they worked 6 months internship, gave me a mop and broom the first two weeks. Went from there from everything you can learn under the sun when it comes to shrimp. I go back to the movie, you know, with Tom Hanks. People would say hey Bubba! Yeah but I'm Tom Hanks, I'm not Bubba. I had to learn everything about the business right. Bubba knew about the business, right. Gumbo, pineapple, blah blah blah, shrimp shrimp shrimp. And just learn the business and everything about the sales Went through all of that, a year and a half got into 1700 retailers outside of Louisiana. All my sales. So I learned the business, talked the talk, walked the walk. I was Bubba.
CROWSON: People don't realize how hard from fishing to harvesting to processing to delivery.
GREEN: It's very complicated.
CROWSON: They don't know.
GREEN: No, it's very complicated. I mean it's different because if you go a different place to try to sell domestic shrimp number one the first person asks you, what makes your shrimp taste better. It's shrimp out the same body of water. That's domestic. But then you got import and imports are different. It's like you going out there looking at your farm, your chicken farm, hey you need a certain size today, let me go check. We got some medium large size. 'Cause it’s in a pond just sitting there. That's easy, you could watch that. Wild card you gotta pull a boat out there and you gotta like, you know hail mary's blah blah blah and gotta go and trawl. And when you trawl you don't know what's, you could be pulling up iron. You have, you saw Forrest Gump. You have no idea what you trawling. So every time you pull that net up, it's a chance you take that aw man that might have 50 thousand pounds of shrimp in there.
CROWSON: What's the strangest thing you ever pulled up?
GREEN: Old muddy boots man. A bunch of them. Like in a pile. Like a school of boots. Might have been a ship down there, I don't know. But yeah some old muddy boots.
CROWSON: So as you became more seasoned in this from this kind of accelerated approach, where did this evolve into Oceans 97. Where did it come into where we are today?
GREEN: So I worked three years for the company and I had enough it was time to move on. I said, man I have all these contacts. All these multibillion dollar companies that I sold to across America. I said let me go back and do what I know. What I'm specialized at. So I was thinking about a name and I said hey, I got my number 97, I have Oceans. Everything in the water I can sell it. Oceans 97 Inc. February the 15th, 2015. That's when it started.
CROWSON: Um. Sustainability. You're pretty strict about it.
GREEN: I am.
CROWSON: Talk about that.
GREEN: It is. I mean sustainability is one word. The other one is traceability right. So sustainable. What's it mean sustainable. Coming out the ocean. The gulf number one. Taking care of the gulf. Taking care of the ecosystem. Because if you don't it will not give back. You know, so protecting that. All the way down from the person at the dock. The way he handle his product. To the person at the shrimp plant, the processing plant. The way he handles, he or she handles their product. And there the guy that get in the truck, he gotta handle it the same way. You know just it's like a piece of diamond out the ocean. That's what that shrimp is to me, that's what that other fish is to me. Or that customer who has to get it at the end, it has to be the same way when they open the bag up and look at it. You know, and being sustainable and knowing where it's coming from. I mean that's why to me sustainable and traceability, they are married together and everything come out of the ocean is going through that supply chain. Everybody is local. And they're putting that product on that personal plate here in the United States and when they eat that and they say man where did this come from, USA.
BASSETT: In American business we need to be winners, we have to think like winners and I say this facetiously. But both of my sons and son in laws got their MBA, but I say we need more football coaches and less MBAs.
CROWSON: Now THAT is John Bassett III. He’s a long running “made in the USA” manufacturer, and Chairman of the Vaughan-Bassett Furniture Company.
BASSETT: Let me explain to you. If you're a high school football coach and you play on the state championship and you have 14 points under you, the coach doesn’t say we should lose by only 7 points. The coach says well what? Well if you're an MBA and you lose by 7 points you'd say well we covered the spread. But let me ask you something. Tell me any SEC coach at Arkansas, Alabama, LSU, Florida or Auburn is gonna keep his job if he keeps losing by 7 points. And that's what we face in business. We don't need to cover the spread ladies and gentlemen, we need to think of ourselves as winners again.
CROWSON: One hundred percent of Bassett’s furniture is crafted in the United States. In fact, Vaughan-Bassett is now THE largest manufacturer of wooden bedroom furniture for adults in the country. And he has a lot to teach us
CROWSON: You have had a fascinating career in business with basically the family business at Bassett Furniture and it seems a lot of these lessons you're sharing with so many young entrepreneurs, up and coming, some of them you learned the hard way didn't you?
BASSETT: Oh yes you learn by your mistakes. I mean I don't care who you are, you're not going to be perfect. Don't get discouraged. At the same time, don't be stupid. Learn from your mistakes. You made them. My father used to say I can tolerate your ignorance but not your stupidity. What he was saying was if you do it wrong once, I will show you where you went wrong. If you do it twice, you're stupid. Don't be stupid.
CROWSON: Do you think that philosophy still applies today?
BASSETT: Absolutely. I was making a talk once to a business group and they looked at my book and they said this is a very simple book. I said if you don't listen to anything else I tell you today about business, listen to this statement. My job is to take a complicated problem and make it simple. For goodness sakes don't take a simple problem and make it complicated.
CROWSON: Something else we tend to do a lot in this world is make simple things very difficult. In that book you were talking about the five principles of business. What are those?
BASSETT: Well the first principle is attitude. If you don't have the right attitude you're not gonna win. If people think they're losers they're gonna lose. I mean let me give you the word I despise. I mean I despise this more than any other word in business and it's the word can't. Because if you say I can't do something, that gives you permission to quit trying and quit thinking. You never quit trying and you never quit thinking. You don't always succeed the first time but you never stop, you never stop. So in attitude I like to say we can do it and you have to convince your whole organization that they can do it too. If you have the wrong attitude you have to go to the second principle. it's leadership. And we yearn for leadership. I don't care if it's politics or business. Whatever it is we yearn for the leadership. Attitude, leadership. Number three is change. We were absolutely drove change and we still are, we're relentless. Let me tell you what else. So often today there's a lot of factories in America that don't want to spend any money in America. If we gon' pay the best wages, we gon' have the best value think about all these other things, we have to have the most efficient operation in the world. Now that means spending money on brick, mortar.. and technology and everything else. We can't just decide something and send to another country, so change is number three. Number four is, very important, don't panic. They want to panic. The easiest fight that will ever be won is when the other guy surrenders before the first shot is fired. It is time for America to turn around, look our competition in the face and go after it. The last one is teamwork and communication. You have to do it as a team and then communicate. Constantly have to tell people, because rumors get started and the way to stop them is telling the truth.
CROWSON: You apply those principles with your business. The wood industry which is of course your bread and butter as you make the bedroom furniture and the tables, it went through a very defined and significant drop off, very big depression and it almost cost one of your companies there in Virginia, one of your facilities in Virginia which you weren't gonna stand for were you?
BASSETT: Well we didn't want to stand for it. Back it those days, it was 2006, what I call the free trading era, that's when everybody had to be a free trader. And everybody wanted to go overseas, and I called it a stampede. It was a stampede....So again it got back to this attitude of leadership. If we said we were gonna close all factories down we would be here today.
CROWSON: Because this is something, you were in a situation you were talking about everyone going to international suppliers and you did not want to give in there. You apply your five principles. A lot of people would have said it was an insurmountable challenge but you guys committed and you applied those principles. What happened?
BASSETT: Well a lot of things happened. We started gaining some grounds. You have to remember we were the only guys swimming against the tide. But most people were looking at you and saying where are those crazy people going. And then we sat down and came up with a lot of different marketing plans that made it a lot easier for our dealers to deal with us than to deal with people overseas.
CROWSON: You speak so passionately about this country. You also place a great deal of importance in your product being American made, being American founded, grounded in the country as you said. Everyone else went international, you stayed here. Why is it so important to you to pass those principles and that heritage on generations after?
BASSETT: If we don't take pride in ourselves, who in the heck do you think's gonna take pride in us. that's our strength. Let's not make it complicated.
CROWSON. Taking pride...and finding ways to make things in the USA, even down to the smallest details. That is something a pair of homegrown inventors has done. Jason DeYoung and Gary Kozminske, of the company One-Tie, formerly known as Dera-Tie. They make a truly one of a kind product - multipurpose reusable plastic straps that you can use to do lots of things -- bundle your computer cables wires, neatly store tools, manage camping equipment, simply get organized at home, or tie your bike to the rack, which is what I do.
CROWSON: Alright Jason, so if you could tell me a bit about the histories and the story of what brought us here to Dera Tie.
DEYOUNG: It started with a project that I was doing for my business partner now, Gary Kozminske, we were standing at the trunk of his car and he popped it open and I happened to see this box of these straps and I said to him I said Gary what are those things. And he said oh it's a reusable tie strap. And I come from the contracting world so I grabbed them and I said where can I get them. He goes oh I invented them. You invented them? And he's the type of guy that you know he had a problem, he wanted to solve it so he got a prototype mold and made these straps. And I took them home with me and I found myself using them a lot and the next time I saw Gary I said Gary you really need to do something with this thing.
CROWSON: Well tell us first, what exactly is the Dera Tie. What is it? Because when I first saw it I thought well it's about time. As someone who deals with zipties, it's about time.
KOZMINSKE: So the Dera Tie is a multifunctional reusable strap. Originally the intention was to be used on electrical cords and to take the place of zipties, bungee cords, velcro straps, etcetera. And the beauty of the product is, once it gets into one's hands. Their mind starts going to all the different ways they could use it, all the different applications and as you see on the packaging we've come up with the term, there's a bazillion uses.
CROWSON: So let's go back to the genesis of this pre-Jason. Gary you're talking about you build these things out of necessity. What was the story that led to your design?
KOZMINSKE: Well many years ago while I was painting a house with a power painter, I was on the top of a two story extension ladder and I had the painter plugged into a cord. Unfortunately the cord fell off and went to the ground. I looked down, went down, picked it up, plugged it in, went back up. It happened again. And then I said there's got to be something here. There's got to be a better way to solve this problem. So when I wrapped up my painting, I went into my shop and started getting materials together and fashioning prototypes of my idea.
KOZMINSKE: And I did that for a while and then shelved it and walked away from it. So it sat dormant for a long long time.
CROWSON: Gary what is your background prior to I guess inventor?
KOZMINSKE: Well I'm a mechanical engineer, I've worked for a number of large companies also as an independent contractor over the years. And I've always been an entrepreneur, a tinkerer, a designer. It's my passion. And I'll tell you a little story about how I became a mechanical engineer, at least what gave me the idea that that's what I wanted to do. As a young boy I visited Greenfield Village in Michigan and if you're not familiar with it, it's a museum that was set up by Henry Ford. And one of the displays was Thomas Edison's original workshop. So as a young boy I walked into that and I saw what was going on there and I thought this is what I want to do. And from that day forward I've always been inventing, tinkering and playing.
CROWSON: When was the aha moment for you guys? When did you realize, okay we're onto something here.
DEYOUNG: Yeah it's one of two things. Either, Gary and I went and did that small little trade show in Kalamazoo. It was like a home improvement show.
CROWSON: Tim Allen style?
DEYOUNG: It's like everyone's there looking for sprinklers for their yard and landscape blocks you know.
CROWSON: Well you mentioned Michigan so it's the whole Tim Allen question.
DEYOUNG: Yeah absolutely. And he's from Kalamazoo as well or he went to school at western. But we ended up going to the Kalamazoo home show. And set up a little booth and we said this is gonna be some of our customer discovery because you've got everybody coming in the there from landscapers to just grandparents, right, just looking for stuff for the house. And we sold product at the show. And three hours into the show we're having to call Gary's daughter saying hey can you start packaging up more product because we're selling these things like crazy. And we sold a ton of them at the show. It was just cash business. I think everyone was looking at us weird because everyone has their booth set up and we've got a, like a Kool-Aid stand at the corner that everyone's lined up for.
CROWSON: It's like the kissing booth. Gary was this a situation where, was this a garage idea. I mean as Jason said you had to call your daughter to say hey can you start packaging more products. Was this something that was coming out of the house at this time?
KOZMINSKE: Oh absolutely. We weren't set up to package. We had no distribution network. Everything was out of the house, out of my garage or out of the living room. And I had the family involved in putting together the original packages.
CROWSON: Toward the production side of this with the project and the Dera Tie, how important, where was it on the priority scale that you guys kept this US based?
DEYOUNG: It was a deal breaker, alright. Gary was very adamant from the beginning when we formed our company that he wanted to make this product here in the USA. It was like one of his things was I'm adamant about having it made here in the US. And really going overseas with a product like this, I don't know that you'd save a whole lot of, that you'd save a whole lot of money doing it anyways just because it's injection, it's all injection moulding. But it was very important to both of us that the product was made here in the US.
CROWSON: Gary, why was it such a priority for you.
KOZMINSKE: I'm a very patriotic person, I believe in the United States and I wanted to be able to share the wealth if you will with Americans. If it creates jobs, if it puts more money into our economy, that was extremely important to me. And as Jason said, I was adamant about it. I wouldn't have it any other way. I had offers to have tooling made overseas and I said no. I want it done here even if it costs me more. It was, it would have been a deal breaker and there was no options.
CROWSON: So many positive things have happened as a result of this invention. I wanted to know from the guys..how do you feel? What does this mean to you?
DEYOUNG: Gary came up with a brilliant idea. And I knew the product would sell itself so it was just all about getting it in the hands of the right people. So I'd like to say I was, I mean obviously I'm excited but I kinda knew that this thing would be a hit if it was given a chance.
KOZMINSKE: I felt truly blessed. It's hard to say, put into words the journey that I've been on with the product and getting to this point is just an excellent reward for me. It's an honor.
CROWSON: Since we recorded this conversation, Dera-Tie licensed their concept to Taylor Made Products. They also changed their name to One-Tie. Congrats, guys! We want to hear from you -- why is made in the USA important to you? Tweet at us @WalmartToday. Also, if you like what you hear, take a moment to rate and review this podcast - it helps other people find the show! Thanks for listening! See you next time.
CROWSON: We hear about them all the time. They’re powerful consumers, they’re becoming leaders in business and in media. They’re disrupting industries and innovating. They’re taking over!
VOX: Millennial / Millennial / Millennium? / It’s a hard word to say / Millennial.
CROWSON: Millennials, no matter what you think about them, are making waves. Sometimes can be a bit...controversial.
VOX: They use the internet a lot I guess / In general people are like oh, so spoiled and use the Internet all the time and are obsessed with memes or whatever / Lazy, entitled, ill equipped to deal with the woes of life. / Yeah, I think it’s a pretty loaded term.
CROWSON: I’m Charles Crowson, not a Millennial, and this is Outside the Box, the podcast about retail and all things related. And while Millennials may be controversial, that’s something they own, they are also the fastest growing generation of makers, doers and consumers. So whatever you think of them….you certainly can’t ignore them. Today we’re talking with two very successful Millennial entrepreneurs. They both make stuff you consume, but in very different ways. And it turns out they have a lot to teach us, too.
ALTCHECK: I sort of became really, really passionate about politics when I got to college like a lot of Millennials, like a real Millennial stereotype.
CROWSON: That’s Chris Altchek, co-Founder of the very popular media company Mic.com.
ALTCHEK: Yeah so I have a funny political background. I went from political internship to political internship. The first serious one that I had was actually in the Bush White House in the national economic council in 2007. I was there when the financial crisis started to happen and there were just some amazing moments that I witnessed. I remember being on a conference call on a Friday afternoon when the first lender became insolvent and everybody was on the call like what are we gonna do about it and I'm like well there's nothing we can do about this. And everyone went home on the weekend and then on Monday it started. And I went from that to work for SCIU which is a big labor union, organizing security guard workers in Boston. Then I went from that to campaigning for Mayor Bloomberg when he was running for his third term as mayor for New York City. So I did these sort of wildly different political jobs. And that's when I realized I was really interested in finding solutions to problems that people had, but I was not ideologically motivated. I didn't really align with any of the people I worked for and realized well what does that mean. I should be a journalist. Because that's really the job of a journalist. Is to not come in with a huge preconceived bias and to actually have an open mind and look for the truth.
CROWSON: And from that vantage point he has his finger on the pulse of how people, especially Millennials, are consuming news. Through Mic.com he and his co-founder Jake Horowitz reach 60 million Millennials a month in the US.
ALTCHECK: So we're in a really unique moment in journalism where people just don't know what to trust. We've had five years of incredible change in how people get their news and how people produce news because of that. Five years ago when social media started to really gain mainstream momentum as a destination to learn and talk about the news, I don't think journalists realized the scope and scale of what was coming, and we've gotten to a place today that's actually pretty scary, where trust in media in the US is lower than trust in Congress. But the opportunity to have a big impact by creating new forms of journalism are bigger than they've ever been.
CROWSON: It seems like today when you think of journalism, we think of politics, we think of current events. Everything has to fit into one of three possibly four boxes. You're either Republican, Libertarian, Democrat or Socialist. And those are kind of the four boxes we go into. And there's no cross-pollination, there's no socially moderate versus fiscally conservative. You're one or the other. And you have mentioned as a Millennial, labels and ideology don't necessarily carry as much weight do they?
ALTCHEK: Yeah it's, for me personally definitely not. I'm looking for people that have great ideas that are gonna fix some of the issues we have and push us into progress and that's my lens on the world and I try to keep that as much as possible. But what we found is actually there's a lot of people who kind of think like me. A lot of people reject any label you want to put on them. Most people under 35 in America believe that climate change is real, for example, and believe that we should do something about it but a lot of them don't want to label themselves as environmentalists because they just don't want any labels. And then when you think about the political parties, it's even stronger where most Millennials identify as Independents, not Republicans, not Democrats. So I think these labels are too simple for how complicated the world is and not particularly inspiring for a group of people that are looking for meaning and looking for purpose. A lot of these people, their purpose is to make their communities better, make their community stronger. Have great families, live a happy life, give back to the world and there's not a great label for that.
CROWSON: As we talk about the desire to walk away from and move away from labels we're labeling you. It's just what do we do. What is a Millennial? Let's just clear the air on that because there are so many different perceptions there. What's accurate and what's inaccurate?
ALTCHEK: Well so let's do the Pew research definition. So Millennial according to Pew is somebody born in 1980 all the way up to 1996. Some people say 2000 but let's say 1980 to 1996. So it's a huge date range. So people roughly 19 to 36 now. There are 80 to 85 million of those people in the US, so it's the biggest generation in American history, bigger than Baby Boomers. Those are sort of the facts and then there's a lot of myths and preconceived notions about what are the attitudes and beliefs of those people. In reality it's a really diverse group. There's a lot of different behaviors in that group and to sort of stereotype them all as one would be a bit dangerous.
CROWSON: What is the voice of Mic?
ALTCHEK: So the voice of Mic is, and we don't deliver on this all the time so we're always trying to make it better, but aspirationally our voice is sincere curiosity. And then there's a few pillars that we're super focused on. One is giving voice to underrepresented voices, so people that have been traditionally excluded from mainstream media and those narratives, we focus intensely on telling their stories. Another is a deep sense of journalistic integrity and transparency about our work. Our assumption is that you don't trust us. And so we need to prove that we deserve your trust with every story everyday. And that's fundamentally different than how older, old school news organizations operate but that's cause we live in this new world where trust has been eroded. We also try to be honestly hopeful. Hopeful not in that we're gonna write b.s. stories but hopeful in that we're gonna look for people that have constructive solutions to problems and tell their stories really actively. So those are some of the key tenets of our voice.
CROWSON: Let's touch on those two words, trust and hope. We'll stick with the journalistic realm right now. When is the last time you heard from a journalistic standpoint those two words married into an approach. A story, a voice. A cause. Think about it. Because when you said those two words I thought wait a second. Full disclosure, I was a journalist for thirteen years so trust and hope. They don't collide much in that profession do they?
ALTCHEK: No, I think a story that we just did that I was really excited about. We profiled this company that's building these new sponge-like technologies that can absorb oil out of water and these sponges can carry I think a hundred times their weight in oil. And so they're being used across different oil spills on oceans and lakes all over the place or anywhere where there's been some sort of environmental damage. And that's, we reported out to see if this technology was real, if this could really have an impact. If this was scalable. If this was gonna be cheap enough to produce to really, how does this work? Are you gonna take huge sponges and bring them around the oceans all over the world? And actually a lot of it proved out. What's really cool is the people who built that are really sophisticated scientists who've dedicated their lives to solving really important problems. And there's a lot of those people and that's what gets me excited.
CROWSON: Where else has this journey taken you and has also taken Jake.
ALTCHEK: All sorts of wild places. Jake sat down with President Obama, one of the youngest journalists ever to interview the president. But in that experience actually it was about the Iran deal at the time, decided that it wasn't enough for him to interview the president and what would be really interesting is if we got voices from all around the world to participate in this interview. And so Jake went out and sourced an activist in Iran which is really hard to do, to find somebody willing to go on camera, who actually asked President Obama a question that we filmed, gave it to him on an iPad and then we did the same thing with a young person in Israel, it was the first time a sitting president had ever answered questions from young people outside of the US. And it was a super dynamic incredible experience. One of the moments that made me really proud and honestly I didn't have anything to do with the journalism here, but one of our reporters wrote a story around police violence, it was last summer now. And the story was so powerful and so well written that Rihanna and Beyoncé and a few other real cultural influencers recorded themselves reading this story and then posted it everywhere on their Facebook, on their Instagram, across all these social platforms and started a conversation that reached a hundred million people in two weeks. And for me to do important journalism on issues that matter and then get it into the cultural zeitgeist is like a dream come true.
CROWSON: In the world of retail, the consumer exists multigenerational. You've got the Baby Boomers, then you've got Gen X, now we've got the Millennials. What is it on the Millennial side, what do they value, what do they want. Is it authenticity or is it something different?
ALTCHEK: So the best way that we describe one of the big changes that this group of people have brought about and obviously not all of these people are the same, but one thing that we have found to be relatively consistent is, consumerism now is a form of social activism. So if you think about it, like twenty years ago, I may have bought my Nike Air Jordans and not worried about where they were made. Today you kind of have to worry. And if you're one of our readers and we reach 60 million Millennials a month in the US. If you're one of our readers, you really do care. And a lot of these people put their money where their mouth is and care about the purpose and mission of the people they support. And they consider purchasing and e-commerce definitely a place they support and so one of the things that we think is really important in serving this audience and if you really want to super serve them is to talk about why you do what you do and make sure they understand that you have good values and the people that you're working with have good values and that you're a brand that can be trusted. And you have to be authentic in how you tell those stories and if you are, you can build a real relationship.
CROWSON: The writer and speaker Simon Sinek wrote a book called Starts with Why and you just talked about the value of the Millennial customer caring about the why. Is that something we've forgotten?
ALTCHEK: I think some places in corporate America have forgotten that. The relentless mark for shareholder value, that message does not resonate with a lot of people in this audience. Millennials are not rich. They're not loaded with cash. They're in a tough financial position when you look at them compared to previous generations. But when you look at where they're gonna work, they put learning and development way above how much they're gonna get paid. And so people who hammer home that the shareholder value as the ultimate purpose of a corporation are not gonna win with this audience especially in the long term.
CROWSON: Some of the stereotypes of Millennials. Some of your favorites.
ALTCHEK: I think my favorite because it's pretty true is that Millennials feel entitled to share their opinion. And in the workplace I know that's rattled people, especially people that grew up in more traditional corporate settings where you have to put in your time before you can share your opinion. And you get this group of people who communicate as if they're the expert and start sharing their opinion from day one. What I found as both a Millennial and a manager is that it really comes from a good place and there's a huge amount of value in actually listening to what's being said. Because largely this is a group of people that's really in tune instinctively with your company's mission and your organization's mission, your organization's values. They're listening to that stuff much more closely than you think they are and when you're off base they're probably gonna flag it to you. Or if you could be meeting your mission or living your mission more successfully they're gonna tell you. And so usually you may not like the style at which they share ideas or the pace at which they do it or all those things, but usually at the core of what they're talking about is something really really important. I would recommend you listen to that. And take it seriously. And so I wouldn't say I think the stereotype of them being entitled is kind of a funny one, but there is some value there if you're willing to listen.
CROWSON: Sharing ideas and opinions at a quick pace is something that Natasha Case, the co-founder of popular ice cream brand Coolhaus, knows well. Along with her business and life partner Freya Estrellar, Case makes ice cream like the Richard Meyer Lemon, Mintimalism, Frank Berry. Get it? They make ice cream sandwiches and name them after famous architects or design concepts. They started out baking cookies and making ice cream at home in the kitchen. Now this year about 5 million people will eat Coolhaus. They are sold in 6,000 plus locations, in every state and 6 countries.
CROWSON: What is a normal day for you like given, I mean you're now in year 8, 7, 8.
CASE: Yeah, year 8 and change.
CROWSON: What is a normal day like for you now?
CASE: Yeah well you know you what's nice is it's not, there's almost no normal day which is what I love about what I do. Each day is unique. What I'd like to say though is overall I'm not at my desk more than 50 percent of the day. So whether that's press meetings, public speaking, meeting with buyers, meeting with my various teams at Coolhaus, or you know just trying to have something leisure every day as well. It's kind of just a general mix and then I have a newborn son as well so that's been also changing the format of the day a little bit.
CROWSON: Congratulations for that.
CASE: Thank you.
CROWSON: At any point has it dawned on you like oh my god I'm responsible for a human being. Business is easy compared to this.
CASE: Yes, it's funny, it definitely has dawned on me. I think business has been a great preparation for it. Freya and I had said it's like we had 200 children over the years. But it's, that's been great preparation because there's so much kind of project management involved you know when you have the kid you have to really be organized and have systems and work with your partner just to an unbelievable degree. And Freya and I who I’m married who we founded the business together so we had a really really good backbone, but I will say also I think motherhood has put business in perspective where little, I definitely would say that petty stuff has bothered me less since having a child. You know, you kind of automatically go to more big picture mental state.
CROWSON: Let's go back several years now to where Coolhaus started. How did this start.
CASE: My background is in design and architecture and I had been searching for a way to make design just more fun and accessible. Open up that conversation. And in general for me I just hate things that are intimidating or that are only cool because you can't access them. And that became my mission in undergrad. I went to UC Berkeley. And this moment happened where a professor criticized my scale model that I built, he said that model looks like a cake, that's a problem. I said why is that a problem. And I baked the next iteration of the model as a cake. And I really saw my classmates kind of light up because instead of looking at balsa wood, there was frosting and cake in the room. And I think it was this really memorable kind of electric moment. And I thought this is it, I can use food to have a dialogue about something else. And then my first real job out of grad school was Disney Imagineering and not long after I started, the recession hit and there was very kind of a dark mood around the office. There were a lot of layoffs, so as part of my food and architecture mashup idea, I started baking cookies, making ice cream, naming the combinations after architects, so if I found someone who had gotten bad news or it was obviously just a little bit down and I would bring them a Frank Berry Ice Cream Sandwich or a Mintimalism Ice Cream sandwich, they would laugh amidst the tears a little bit. So this was more of a passionate hobby and then I had just met the co-founder of the business I had mentioned Freya Estreller. And she first just thought it was a hilarious quirky idea but she came to the table saying this could be a business and I have a really good complimentary skill set to work with you on it. For me I had of course the design, knowing how to design a brand. Let's say I had some sales and marketing experience. And she had more kind of project management. She could make financial projections. She knew how to really do the operations. So that was really kind of the founding moment. This quirky idea but also meeting her and I think also just we were 25 at this time and we really saw let's just take a risk and put it out there, what have we got to lose. We didn't understand wholesale, we couldn't afford a brick and mortar, but at that time which was late 2008 early 2009, the whole kind of food truck phenomenon had really kicked off and we thought that's something we can do. We can afford a food truck and we can use social media to tell people where we are. And you know, we just sort of embraced that moment and just hit the ground running from there.
CROWSON: I want to go back to when Freya first approached you about this. At any point did you stop and say wait stop stop I was just kidding, this was for novelty, this was for fun.
CASE: You know, not really actually and I think part of that has to do with that age. More kind of in the heart of your twenties where you might not be overthinking things there's just kind of a different level of decision-making at a different stage in life because there is more to lose or risk is just gonna affect you in a different way. And I think that's what was so good. We just kind of were like not getting into analysis paralysis. We were just doing it. We bought this ice cream truck that we couldn't even drive. And it looked like, you know it had like bars on the windows and every kind of low end ice cream bar sticker plastered all over it. And we just bought it and towed it to LA with no plan. And while of course sometimes you do need to have a little bit more of a plan and more structure, I think you walk through a wall when you don't know it's there. Because the more you're aware of the obstacles and the challenges and that this is not how things are supposed to work, the more it's gonna keep you from just doing that thing that's totally outside of the box which is what entrepreneurship is really dependent on in order to do something really original and ultimately hopefully have it really succeed.
CROWSON: Tell me about the Coachella music festival.
CASE: You've heard stories?
CROWSON: Yes but I want to hear them from you. You lived it.
CASE: So I mentioned we had bought this truck, we figured out we could be really, actually what we saw is we could be a pioneering ice cream truck in LA. There was some savory food going on, but we could be the first to market for gourmet ice cream from a truck in this generation of trucks. So we, then having the truck and kind of having this idea, okay we need a big event to launch at. So we had both been to Coachella a bunch of years before that and I had even gotten in one year for free in exchange for working at a booth. So we thought okay maybe this can be it. If we can get the truck to Coachella, maybe some of our friends in exchange for tickets can help us. And we just begged Coachella for days, months to let us in. By some miracle they agreed to and it was actually in the campground is where they let us set up which was probably just like okay as far away from the center of activity as possible. And you know you may remember I said this truck that we bought did not drive. So we made our plans to kind of get in to Coachella but as far as the truck, we figured out if we join AAA platinum we got one free 200 mile tow. And that's pretty much how far Coachella is from LA. So the morning of Coachella we pretended the truck broke down even though it never drove in the first place and called AAA. I'm sure they kind of suspected what was going on but just really felt bad for us and end up towing us to the campground which is where we launched. We had to sleep next to the truck in the campground. So we wouldn't get to bed until about 4, and then we had to wake up at 7 and set up. And on the second or third day I remember someone woke me up at 7 and said Natasha you better get up, there's already a line. So that's when we kind of knew, there's definitely, we're onto something here. People want this. People are whatever stoned enough to want an ice cream sandwich at 7am. But it was kind of, it was survival mode. We made it happen and that's kind of all that mattered at that point.
CROWSON: You guys have a fearlessness about you. You and Freya went after this with a reckless abandon, entrepreneurs, entrepreneurs have that gear, that gene, and it is a fearlessness and an obsession. A passion almost to the point of obsessiveness, don't you think?
CASE: Absolutely. I think that's definitely a part of the secret sauce of the formula because if you're really gonna shake a system apart and you know there's obviously a big hot term in entrepreneurship is disruption or disrupting. If you're really gonna do that in a major way, you kind of have to be, it's like, a little bit crazy. And really just ignore everything that's telling you that's saying no this is the way it is, this is what you're supposed to do. I do think there are ways to be smart about it. For example, in this situation, it was so scrappy, the start up. I think the whole start up cost, including the truck is definitely under $10,000. It was somewhere probably in the 7-8 thousand dollar range. Which is very little. And you know we were still kind of working other jobs. And we just kept it all like let's just see what people's response is before we go crazy with this. And I remember Freya's cousin had asked me before Coachella, are you guys, are you freaking out are you really stressed out. I was like oh, yes no not freaking out. 'Cause for me I was like, well I'm gonna bring ice cream and cookies to Coachella. You know, how bad can that really be. And that's been the story I think for me growing a business too. It's like it's ice cream and cookies at the end of the day. We're not doing open heart surgery. We are in the business of making people happy and having fun and so I think kind of holding onto that also helps you embrace the risk taking and not being afraid and just giving it your all. Because the downside is ultimately not really a worst case scenario. I mean maybe you are going to forget the snickerdoodles or something. You can live another day after that.
CROWSON: Coolhaus’s brand story is important and something you like to communicate to customers. How do you do that effectively to Millennial audiences as a story they can relate to and enjoy?
CASE: Yeah the story is everything it is also truly the one thing that nobody can copy. Your story is what truly separates you and especially for the Millennial generation it is more important than ever. People want to know who is behind their brand what they look like, where they are from, you know, and really get personal with brands. They spend twice as long looking at packaging. And reading that story if it is on there. That is where I see huge, huge potential to communicate is really using packaging as that tool to tell the story, not only with words, but show it with set of visual identity of brand, I guess.
CROWSON: How well do you use social media in your business model today?
CASE: Social media remains a huge part of what we do. We are a small team, no more than a dozen corporate and a sixth of that is pure social media. That expresses alone how vital it is. Social media though changed itself over time. We relied on Twitter in the early days bc we were a truck business and had to tell people where we were and what ice cream we were serving, Now Instagram is more dominant network discussion internally especially because it is so visual and so are we. And we really want to paint the picture of what people are getting and make them drool on their phone when they see our latest creation. Now we have really two full time social media employees on our team. One that is purely creating content, photography, gifs, videos, whatever it may be, and then one who is more connected to the strategy with the brand and what content is going to be used for and what content we need. Really letting people in, it is so key..social media is more about what do other people’s social media about you, what does that say and what does that look like and really not getting too lost in own world and your own messaging, but are they getting it, are they posting things that make sense for your brand, is that the kind of post you want to see. And I think once you really get in touch with that, and you really interact with people out there who are doing the lovely favor of posting a picture of one of your pints on their instagram handle it is amazing free PR for you. You need to be there to tell them you’ve seen and you care and also make sure that they know what they are excited about, and really share with them what are those key factors that sets your brand apart.
CROWSON: You and Freya fall into the category of Millennials. But it seems you are bucking the trend of what people see as stereotypical. Does your generation get a bad rap?
CASE: I do think there are some things about Millennials that are written off that are actually good things. One for example is people say Millennials can’t do one thing. They have to be doing a million things at once. Always distracted. That may be true, but may be a good thing. Speaking to my team that works in the shops and trucks, you have to do so many things at once. You are ON social media, telling people what the menu is, taking picture of it, greeting customers, serving things, taking Postmates orderes in, sometimes pre-scooping for grab n go freezer, there are just a million things going on, Someone pops in and they want to book the truck, you got to give them a card for catering. Juggling all these things. I think you need to be someone who can do a million things at once to do that well, and a Millennial can thrive in that. I also think that as the leader of the brand coming into management strategy, knowing you are going to have a lot of Millennials, why not play to that strength. I find that my team we are all very busy, wear a lot of hats and that is how we thrive. I personally think busy people perform better when have more to do you want to get it done, as opposed to when tasks aren’t challenging. I try to flip it on its side in that sense. There are, it’s definitely more of a me generation. People do ask for a lot more, I’ve had an assistant GM at one of the shops want equity in the business and we were barely in business and we weren’t issuing options. I think it is of the generation that you just want more or expect more or feel it is owed to you. I would like to see more of my female employees be that way though, because I find it is more the male employees that are Millennials who ask for more as opposed to the women. But at end of the day we certainly our generation is innovating a ton and questioning a lot and as long as you use properties of your generation to your advantage, the world can be your oyster.
VOX: Um what would you guys say is the best generation. / Um, Millennials. / Why is that? / Because it’s my generation? / Who do you guys think is the best generation? / The next generation / Why is that? / Because they are always getting better.
CROWSON: We want to hear from you -- Tweet at us @WalmartToday. Also, if you like what you hear, take a moment to rate and review this podcast - it helps other people find the show! Thanks for listening! See you next time.
CROWSON: I’m Charles Crowson and this is Outside the Box, a podcast about retail and all things related. Today: the workforce of the future...
Think back 20, 10, even just 5 years ago...remember when you had to go to an actual brick and mortar store to buy anything? Well, now you can order your coffee before even arriving at the café. You don’t have to talk to someone to place an order for Chinese take out. You fill your grocery cart at Walmart… dot com. These new conveniences seem normal to most of us, and it’s hard to imagine life without them.
We’re plugged in at home, but when it comes to the workforce, it turns out we’re lagging behind… in many sectors, the way we live has advanced beyond the way we work and learn. A lack of resources, infrastructure and training challenges have left some workers and companies in the dark...or...unplugged.
While change is hard -- and some people are scared that they could lose their jobs to a robot -- leaders in retail are working hard towards bringing work, and workers up to speed. So today, we’re talking with the visionaries who are creating systems -- and unique partnerships -- that bring our work, and, importantly, our work force into the 21st century.
NORINGTON-REAVES: My grandmother used to say, some lessons are better bought with than taught with and what she meant was, you can tell someone not to touch the stove because it's hot. But if they touch the stove and burn themselves. Best believe they won’t do that again. And so there are moments in my life where I think about lessons I've learned. Oh bought that one. And sometimes I'm like, oh that one was taught to me.
CROWSON: Karin Norington-Reaves leads the Chicago Cook Workforce Partnership. It is the 2nd largest workforce board in the country.
NORINGTON-REAVES: This is the dream job I never knew I wanted.
CROWSON: But before that dream job, she got her start as a teacher more than 25 years ago with Teach For America. And “bought” some valuable lessons along the way.
NORINGTON-REAVES: I was actually placed in Compton California at the height of the Crips Bloods gang war. And the Rodney King and Reginald Denny incidents. The first time I ever saw my father cry outside of a funeral was the day I told him I was placed in Compton. My dad sat on a log in the backyard and sobbed like a baby. And he said baby they will kill you. And when I got there I said dad, you live in a tougher community than this. Although, I mean, we had five drive by shootings my first three weeks of teaching.
CROWSON: You didn't tell your dad about that did you?
NORINGTON-REAVES: I didn't. It was so funny my first day in my classroom before school started and I was just preparing the classroom, I looked up and saw this hole in the light fixture and the janitor from the school happened to walk in as I was looking at them and he said, yes those are bullet holes, don't tell your parents.
It absolutely changed my life. I loved it. I loved my kids. I loved my classroom experience. I identified with them. I got a gift from my students every single day for two straight years. So I remember their faces, I can tell you the names, first and last name of every student I've had. It was phenomenal.
CROWSON: Where have these students gone on? Because many of them are in their late thirties as well.
NORINGTON-REAVES: Yeah so. Some of them have had really rough paths and some of them quite frankly didn't make it. Yeah, that's the part that you won't see me smiling about. And it is the thing that led me to what I do now in all sincerity. There was this point at which I saw that a disservice was being done to black and brown children by black and brown leaders. And I wanted to figure out a way to have some impact and I realized I could have an impact in my classroom but I could have a larger impact with a law degree and attacking systems.
CROWSON: You are from Chicago, native Chicagoan, so you know the struggles of that city. To ask simply where are the challenges. There is no more open ended of a question.
NORINGTON-REAVES: When people talk about Chicago, they call it the tale of two cities. When they say that they mean the difference between how the average white person in Chicago lives versus the average black person. I don't think it is that simple of a tale. There are pockets of abject poverty and disinvestment in our city. There are communities that are awash in affluence. Right. And so those two polar opposites paint a really disturbing picture. But there are all sorts of folks in between on that spectrum and I think that gets lost in the discussion of the city. I think what you hear about is the violence and horrific crimes. If it bleeds it leads. And I used to get up every day and read the paper and look at the homicide count and look at the shootings. And I use that as motivation. And I got to a place where I had to stop doing that because it is soul crushing and depressing. And so I decided to start looking at the assets in our communities and the assets of our people. And particularly of our young people.
CROWSON: And that’s what she’s continued doing as CEO of the Chicago Cook Workforce Partnership. It’s unique program created by the City of Chicago and Cook County -- to eliminate the bureaucratic boundaries that separate the two, and make it easier for people to get access to job training and job placement services in their own communities.
NORINGTON-REAVES: We now cover a sixteen hundred square mile area, anywhere from a thousand to a hundred forty thousand people a year walk through our doors to receive services through our workforce centers. We now partner with more than two thousand companies in the area as well as industry associations.
CROWSON: What are those career opportunities those thousands upon thousands of people who walk through your doors. What are the career opportunities presented to them?
NORINGTON-REAVES: So they're numerous. We focus on the seven high growth, high demand sectors within the region. So we know that there are opportunities in information technology and healthcare and manufacturing and retail and business and professional services which encompasses everything from accounting to administrative functions. We know that there are opportunities in the culinary area and in transportation distribution and logistics. Our responsibility is to help people understand what the industry sectors are, what the high growth high demand occupations are within those sectors. And then what are the credentials or qualifications that you need to possess. How do you actually gain access to training for those credentials and then where are the job opportunities. So it is a complex host of factors that goes into making those connections for individuals.
CROWSON: The individuals who walk through the door...the worker of the 21st century is different than the 20th century. How have they changed?
NORINGTON-REAVES: We meet people where they are. So we see the full spectrum. One of the challenges is that, particularly for our young people, education has changed. What we value in education has changed. And so I've been in stores where we've helped to place employees in the stores. And I remember very vividly this was a store grand opening. And I went to get some lunch meat at the deli and I told the young man I wanted a half pound. And he put meat on the scale and it was well under a half pound. He didn't know what a half pound was from reading this digital scale. You know, he was as sweet and as kind and as mannerable as possible, the customer service piece was great. But he needed some technical skill support there.
CROWSON: Building skills, a critical piece of the puzzle. Along these lines, Karin’s organization is doing work with Walmart and the Walmart Foundation, who have made a five-year, $100 million investment to work with not just the Chicago Cook Workforce Partnership, but organizations like The ASPEN Institute and National Skills Coalition and the goal of this collective effort is really to strengthen the transferability of skills of the U.S. retail workforce making it easier for front line workers to advance more quickly. Clearly takes many people at the table to help address some of the biggest challenges in workforce development and readiness ….can you talk about some of those relationships and how they work?
NORINGTON-REAVES: So I have some favorite stories around our employer relationships, but I think most relevant is the most recent relationship that we've just started and it's with Industry Associations. So we've just launched a new initiative called Hospitality Hires Chicago. And really exciting outgrowth of our retail sector center work and just our sector driven work in general. But this is a partnership with the Illinois Hotel and Lodging Association, the Illinois Restaurant Association, the Choose Chicago which is the tourism industry for the city, it's the tourism bureau, the Magnificent Mile Association which is the industry association for all of the businesses within the central business district of Chicago. And that covers nine different sectors including retail and hospitality and tourism and attractions. And so we've partnered with them to help meet their business needs, their labor needs. And we just kicked off a huge event with five hundred prescreened, pre-registered individuals and we had two hundred walk-ins on the day of the event. We had fifty-two employers and twelve hundred interview slots. And it was just phenomenal to see all of those partners come together and to see that there's a continuing demand for that level of support and engagement.
CROWSON: Specifically retail. That's an industry that is changing in many instances by the day. What are some of the challenges and how do you overcome the evolution of retail?
NORINGTON-REAVES: Honestly I keep talking about cyber security because I think it's huge as retail shifts from brick and mortar.
CROWSON: Once a quarter there is a story regarding cyber security.
NORINGTON-REAVES: Absolutely. So I think the intersection of technology and retail is an important thing that we've got to pay attention to. It's not just about the computers. And it's not really about robots taking our jobs either. Because you cannot replace a personal interaction in that customer service piece. So one thing that's fundamental in retail that does not shift is the need to deeply engage someone. To look them in the eye. To smile at them. To say yes and thank you and please. And also the skills around conflict resolution and learning to diffuse situations when customers may not be particularly thrilled with something. To me those are the critical foundational pieces. And then the other piece is the technical skills piece on the side of information technology of cyber security if you will. But I think you go a long way with the interpersonal interactions and communication.
CROWSON: At the end of the day, people…people prefer people.
CROWSON: Ok, so Karin Norington-Reaves has us thinking about access and everything that goes into preparing for and placing someone in a job or career … but what next? How do you continue advancement and learning once someone is IN the job?
VAN KLEUNEN: We spend a lot of time thinking about how to educate new workers. But we don't spend very much time thinking about how to educate folks who are already in the workforce. And we're really missing out on folks who would be incredible leaders in our industries because of that.
CROWSON: Andy Van Kleunen is the CEO of National Skills Coalition, an organization that advocates for policies aimed at helping workers meet the needs of today’s industries.
VAN KLEUNEN: I am a public policy nerd I guess. But I kind of started as somebody who was really concerned about how we could make it easier for people to succeed. And so after I left being a political science student, I actually went to New York City and spent a lot of time in working class and low-income communities in New York trying to figure out how we could build economic opportunity for a range of different folks. I was doing work in healthcare, which was considered a low wage high turnover job, but there were many many particularly low-income women who were getting employment in that industry. And we thought: could we create a company that recognized the women for the value they were bringing not just to the company but to the patients they were serving. We made an investment in their training, a commitment to retain them, we paid them good wages and benefits which was not common for folks working in home care back in those days, and turns out we created profitable companies doing that, and we were bringing better quality care to patients and we were bringing a better job to the women who were doing the work.
CROWSON: And since his early days as a community organizer in New York City Van Kleunen has become a leading voice for setting policy and creating opportunities for today’s modern workers to thrive, and for businesses to thrive. And part of that iseducating people about what companies are looking for. And it may not be what you think.
VAN KLEUNEN: We've told everyone that the only way to get a good job in this country is if you go out and go to a university for four years. And so we have a lot of folks with Bachelor's degrees even though we don't have nearly that many jobs that actually require a Bachelor’s degree. But what we've forgotten about is that we have many many more jobs out there that require some kind of training past high school. We call them middle skill jobs. It's some kind of technical training for an occupation that provides an opportunity for a career. 54 percent of the job openings in this country for the next ten years are gonna be middle skill jobs. We probably have about 44 percent of people in this country who are trained at that level. So we have gap. A true skills gap.
CROWSON: So those skills run the gamut -- but basically, if you’re a machinist, you need more than a steady hand, you also need to be able to run a computer. If you’re in manufacturing, you have to maintain all the machinery, the robots, that drive the work. If you’re in healthcare, you might need to learn new computer programs that track patient progress. All this requires education. It can look like apprenticeships, remote community college sponsored by an employer, or, by learning on the job. To get things done, Van Kleunen advocates for a holistic approach -
VAN KLEUNEN: We have programs set up to help adults learn to read and compute. We have government programs that are set up to help people learn how to train for a particular job. But the education programs are run by the education department, the training programs are run by the labor department. And we don't make it easy to bring those two sets of resources together. Those are the things that we could make easier with better public policies. It's what I do in Washington on a daily basis. It's try to figure out again how we can make policy be more responsive to the needs of companies and workers on the ground. And if that means making it easier for these different agencies to work more effectively then we need to pass policies that'll make that possible.
CROWSON: Much of it begins with the training side of it. Apprenticeships. They're learning and they're earning as they're learning this, and the pay scale can go up impressively.
VAN KLEUNEN: Absolutely. Construction trades are where we’ve typically had apprenticeships. Most apprentices in our country, and we only have about a half million or so active apprentices, they generally tend to start like at 26, 27, so somebody who's been in the workforce for a while, everything else hasn't worked out and they've decided to do this. In most other countries where apprenticeship is the way that they train a significant portion of their workforce, their apprentices are starting at age 15, 16, they're starting as part of their secondary education. So their education system is set up in a way where somebody can get their high school diploma whether they're in the classroom or whether they're working at the same time. That's just not the way that we've structured education here in the US.
CROWSON: Is there anyone out there who is doing this the right way?
VAN KLEUNEN: Um, Mark Benioff who's the CEO of Salesforce has made this a big issue that he wants to talk about how apprenticeship could be something that changes that IT industry in some way. In part because the IT industry moves so quickly that they're skeptical about whether or not somebody sitting in a college classroom can keep up with what's changing in the industry anyway. So better to have them working on the job and learning with coders and programmers who are actually working in industry. We have states that have taken this very seriously. So the state of Colorado has created a thing called Careerwise, where they're going to measure the certification outcomes for all of their high school students. They're putting significant numbers of them into apprenticeships. You've got manufacturers and healthcare providers and a range of other industries that are now working with high schools and colleges to kind of restructure the education system in the state of Colorado. It's not gonna look exactly like what things look like in Europe but it is kind of recognizing that we could be doing some new things to respond to a changing labor market.
CROWSON: Doing new things, responding. Van Kleuenen looks back to lessons he learned early on in New York City that have made his current work possible...
VAN KLEUNEN: Back when I was working in those low income communities in New York, I recognized that we were helping but we were not advancing people's lives. We were giving folks some stability, better housing, safer streets, but we weren't really positioning them to advance and that's where I recognize that working with industry leaders who are truly interested in what's happening with their workers. Not every one of them but a lot of them are and they've been frustrated that they have not figured out how to come up with a better strategy of hanging on to their people and advancing their people. To me that's somewhat counter intuitive, but I've always been driven by the political alliances of the strange bed fellows. And trying to bring progressive community organizers together with business leaders and a range of students and workers who never would have ever figured out how to work together collectively on a set of issues. To me that's incredibly exciting. And in the end it's also a win win. The companies are better off, the workers are better off. So that to me is thrilling. To being able to facilitate that in some way.
SCOTT: When you look out there you know 42 million jobs in the United States are retail jobs. And the impact that technology has had over the last 5 years on the retail workforce has been tremendous.
CROWSON: David Scott is the Senior Vice President for Talent at Walmart. He’s seen the company from all angles.
SCOTT: So I started off 20 years ago at Walmart in our retail stores as an assistant manager fresh out of college. I'd always worked grocery throughout my college time period and had a real opportunity that Walmart was looking for great grocery merchants. I was looking for a great job coming out of college. The match was there and for my first three years I spent a lot of time working in our stores. After a while I stumbled into human resource roles, had a chance to be a trainer, had a chance to work on different systems within the organization. And ultimately got to lead part of our field organization as an HR specialist.
CROWSON: So from grocery through college into Walmart, the assistant managerial role out of college. Did you ever think you would be with one company you're entire career?
SCOTT: No. And you know it certainly in the recent headlines you'd believe that no one stays with a job any longer than 20 years.
CROWSON: Exactly. There is sort of a word that causes a number of employees, current employees across multiple disciplines to sort of recoil and cringe. Automation. It's something we have to prepare for and something we have to know is coming down the road. How can we prepare for it and what changes could we see occur?
SCOTT: Yeah certainly there has been a lot of conversation about the robots are coming and in all types of jobs, especially jobs like retail. And what I see is, in all honesty, the workforce of the future has already started. We've begun modifying a number of our jobs, not because technology has replaced them but because there's enabling technology that's out there that lets me have associates do more value-added roles than maybe they've done in the past. And so let me use a couple of examples. One common one is cashiers and self check-outs. So with our cashiers, many of them now having self check-outs in our stores, we've moved the cashiers up to the front of those check-outs so that they're able to engage with our customers, help them find that items that they need, move them to the fastest line and help them utilize the technology as customer service hosts. It’s a better interaction for our customers as they're moving through and our associates are not standing behind a desk or standing behind a register scanning items after items, they're actually engaging with the customers.
SCOTT: Another great example is our online grocery pick-up operations. You talk about a job that didn't exist a couple of years ago. Now that a customer has the ability to place an order online, describe when they want to have it picked up and have it ready for them when they arrive at the store, we now have a new role where you're out picking groceries, often times two or three or four orders at a time. Wearing a wearable on your arm that identifies when a car has started hitting our geofencing around our stores so we know that it's approaching to have their orders picked up, so that by the time they're in the parking lot, that order's already been prepared, is being pulled out and loaded in their car within five minutes of them arriving. It's technology enabled but it requires people to make sure that there's a great customer experience. And as we look to the workforce of the future, how do we make sure that we have the best of both worlds.
CROWSON: One of the things people think about when they consider the workforce of the future is how useful will people be. You say the company values people, can you expand on that a bit?
SCOTT: A lot of questions around the role of the individual and the service economy of the future. And we believe that the ability of the individual, the ability of a person to have a stronger and more sincere interaction with the customer is one of the critical aspects of our workforce of the future. It's the humanity of interacting with another individual. Sharing that experience, helping them find the right item, helping them understand what their needs are and walking them to a side counter. The interaction of having a discussion makes the shopping trip more enjoyable. No matter how much you talk to your computer, you're not going to have that human interaction, that smile, the light in someone's eye that causes that interaction to be both positive or helps you to come back and want to shop in that location again. We know that there are individuals that prefer to shop over the internet and we have and will serve your needs. We know that individuals want to shop on their phone and we'll have and serve those needs. But we know that a lot of our customers, millions and millions of our customers every week come to the store because they want to interact with the individuals in their community. They want to be served with a smile. They want to have a clean, fast, and friendly environment and they want to experience the humanity that is our culture. And that just can't be replicated.
CROWSON: People…making a difference...and the ultimate power of human connection...that’s something Karin Norington-Reaves, knows well… From your time teaching in Compton you still maintain relationships with some of your students 26 years later. With so many lives that you and the partnership have touched over several years, have you kept in touch with any of those people you've helped?
NORINGTON-REAVES: Yes, and she told me I can use her name. Her name is Claunia Young. So when I first started I got this email from a woman who was looking for a position in IT, she was looking for training and project management. So every now and then I would get an email from Claunia and she would say, here's how I'm doing in my class, here's some information you should know about this. She would give me feedback if something wasn't going really well. And then I would get a progress report. I finished my PNP training, I passed my exam, I've gotten my credentials. And so one day I was walking through the lobby of my building, so I'm in the county administrative building. I'm walking through the lobby and she stops me. Now remember I've never seen her before because we've been communicating via email. But she recognized me because she had come to our first annual meeting. And she stops me and she says you don't know who I am. I'm Claunia.
CROWSON: Always comforting words.
NORINGTON-REAVES: I know right. And so I'm like ahh, I'm screaming I give her a big hug. She had just gotten hired by Cook County in the IT department. I have the pleasure of seeing her on a regular basis. In the lobby or on the elevator. And I ran into her just a couple weeks ago. And it always fills me up to hear that she's doing well and she's continued to advance. There are people who started at our agencies and now work for us at the partnership. And when they interview and say I've just always wanted to work with you all because you do amazing work, it just fills me with a sense of pride. It's awesome.
CROWSON: We want to hear from you – how has your career changed over the past few years, and what could things look like in the future? Tweet at us @WalmartToday. Also, if you like what you hear, take a moment to rate and review the podcast - it helps other people find the show. Thanks for listening! See you next time.
CROWSON: Take a moment with me and think about the last time you tasted a mango...what it looked like, tasted like, what it felt like...
VOX: Refreshing, at times. Sweet. Delicious. Feels kind of like I’m on vacation. You know, I’ve never had a bad time with a mango. Delicious. Ah! You will want to taste it, you will want to get one if you never had one.
CROWSON: But did you know that such a wonderful fruit also has the power to make us sick? Like lots of fresh foods can contain bacteria you can’t see, like listeria. Wouldn’t it be nice if those bad mangos could be identified and taken off the shelf before they get to you?
VOX: They should remove the bad ones. I mean sometimes you don’t know. You know you don’t know if you’re picking good or bad. I had a bad mango, it was like all mushed up and rotten on the inside. That wasn’t fun. I don’t mind eating it with the skin, sometimes. It all depends on the mango.
CROWSON: I'm Charles Crowson. This is Outside the Box, the show about retail and all things related. Today on the show: breaking down blockchain.
YIANNAS: So the life of the mango is a pretty complicated journey all the way from tree to the table.
CROWSON: That's Frank Yiannas, Vice President of Food Safety at Walmart. And he knows the long journey that a mango can take to get from the tree to your plate.
YIANNAS: In this hemisphere mangoes are generally grown in Central or South America. So think about a tree maturing taking five to eight years and that tree matures, it starts producing fruit. The fruit is picked by field crews in the farm, they get shipped to a packing house. The box fruit then gets shipped and gets transported to the US by air, land, or sea. Once it crosses the custom border in the United States, it goes to another processing facility where the mangoes will get washed and peeled and sliced and packaged. Those mangoes then get shipped to distribution centers across the country. From there they go to stores and then into the customer's home.
CROWSON: The growth of the food system has brought some incredible advancements. But it has also brings some challenges, like keeping food safe along the way. As Yiannas was talking about, he and his team are preoccupied with keeping the dangerous food away from the consumers. You know, you and me. And technology is helping that team do that.
YIANNAS: Our ability to actually detect foodborne illness has increased exponentially. We can now make the invisible visible.
CROWSON: But keeping bad food out of your shopping carts involves a lot of meticulous record keeping. So Yiannas, who is a microbiologist AND an expert in public health, says that a lot of the tracking for this is still done by paper, manually, as you might imagine, making it difficult to effectively and quickly track down the foods we eat.
YIANNAS: So if I wanted to trace back and say, where did these mangoes that are on my kitchen table, where did they come from? It might take me days or even weeks to track that down on paper.
CROWSON: And there’s a lot of catching up to do. The food system has grown dramatically in just a few decades. It looks totally different than it did 5 years ago. Now imagine what it looed like hundreds or thousands of years ago.
YIANNAS: So just go back in time. Hunter gatherer. You think they were worried about foodborne disease? You think they were worried about e coli? No they were hunting, bringing food home, hunter gather. Just do I have enough food to survive. You fast forward over time you have basically the domestication of plants and animals generally around villages near water. You fast forward into time. Early 1900's what do you see. The establishment of the first formal retail units. Very small, serving just a few products. And even at that time, we didn't have the sophistication to know too much about foodborne disease. But you fast forward today and what do you see. In the 1980s, let me ask you a question. How many different food items do you think you'd find at a grocery store? 10 to 20 thousand. Fast forward to the 2000s. How many food items to do think were in a typical grocery store?
CROWSON: Hundred thousand.
YIANNAS: Close. Not that much anywhere from 50 to 70 thousand. And if you look at where we're going today, what the endless store where you can get online, buy anything you want anytime from anywhere else in the world. It's gonna be an endless shelf. So the food system is increasingly complex.
CROWSON: Traditionally when it came to the idea of food safety for the consumer, what were the ways and what were the techniques used?
YIANNAS: Yeah the traditional techniques that food safety professionals are trained under are pretty basic. I like to say they have three basic tools in the food safety professionals toolbox. Training, we're gonna train people how to produce safe food, and while training is good, it's not the silver bullet. It's inspections, we're gonna do inspections of facilities. And while inspections are good, if you think about it if you're running an operation 365 days a year, an inspector shows up once a year twice a year, it's only a snapshot, so inspections aren't the answer in totality. And then testing. We'll test the foods for microorganisms. And historically the methods have not been that great. Our sensitivities weren't that good or precise. And so testing is getting better. But testing isn't the answer because you can't test all of the food. And so we need new tools in our toolbox. And so some of the work we're doing with IBM on blockchain and bringing enhanced traceability and transparency to the food system is really a game changer tool that we're adding to the toolbox.
MCDERMOTT: So blockchain is all about trust. I'm Brigid McDermott, I'm Vice President of Business Development for Blockchain at IBM.
MCDERMOTT: When my son eats mangoes, I'd kinda like to confirm that those mangoes are organic. I know they say they are but are they really organic? And if there is a food scare with mangoes, am I sure that the mangoes that I'm feeding my son are good mangoes? As a consumer I want to be able to have that information and I don't want it to be a science project to get there. I want to go to iTunes, download a quick app, be able to press a couple buttons, scan something, whatever it is. I want it to be easy, I want it to be informative. And so the whole thing about blockchain should be making information available to whoever needs it, whoever has permission for it. At the right time at the right speed.
CROWSON: Brigid McDermott started out as a software developer and quickly realized that her favorite part was actually helping people use and understand the technology she was working with. So now she’s doing that with blockchain.
MCDERMOTT: When people share information, there's risk that you lose control or that you lose comfort with what happens to your information. And what blockchain does is it uses technology to ensure that you retain the control, you retain the knowledge that your information is not going to be changed, not going to be used in a way that you did not anticipate without you knowing about it. And so blockchain changes what is possible because it's about trust. The way I think about it blockchain will transform transactions the way the internet has changed communications.
CROWSON: Blockchain will do with transactions what the internet has done with communications. That is a bold statement.
MCDERMOTT: It is amazingly bold. And it's the thing that gets me up every morning because I think it's true.
MCDERMOTT: Think about doing a crossword puzzle . You can do it in pencil and you can get to the end and you can show your friend, you can say hey I did the whole puzzle all by myself no mistakes. But nobody really believes you when you did it in pencil do they?
MCDERMOTT: It's when you do it in pen that you have that confidence, you feel better about it even if you made a mistake. And blockchain is really like doing a crossword puzzle in pen. And what you do is you say, hey there is a lot of information that I need to share across the ecosystem. And I want to make sure that people know that I didn't erase that information. I want to make sure people know that I was the one that put that information in there. And so you put it on the blockchain. And what you do by putting it on the blockchain is you create this linkage. It is literally a chain of blocks of information. And by putting them into a chain, you guarantee the immutability of that item.
CROWNSON: Let’s talk about supply chain. For decades people have been trying to figure out how to make information more accessible. How to digitize. But it hasn’t been done. Why?
MCDERMOTT: The answer is because it wasn't a technology problem we were trying to solve. It was a social problem. And the social problem was in order to do these things effectively across this broad ecosystem, you need everybody in the ecosystem to believe that they want to participate. And they didn't trust that their information was not going to be used to help their competitors. With blockchain you can be confident that you are only sharing with the folks that should see it. Then you feel comfortable putting information out there. All of a sudden, the 80 percent of the world’s data that is sitting in silos in companies around the world is now accessible. And now we really get to big data. Like this is what big data's promise is. The missing link which blockchain has solved is how do we get people to share the information so that we can use the information and get the insight out of the information.
CROWSON: In the world of retail, how will the consumer benefit from blockchain and its, I would say it’s furthering into daily use. How does the consumer benefit?
MCDERMOTT: With food safety, something that we're working on now. If we can make it faster to figure out, was the problem the roma tomatoes or was it the jalapeno peppers. Something that took weeks when they had that problem in 2008. Nobody gets sick right. So the benefit to the consumer is better health. Not necessarily for every consumer but if you're the one who has the bad salsa, you want to know right. Directly though, there will be solutions that put the information directly in the hands of the consumer. So food safety is a great example of this.
CROWSON: How does the retailer benefit from blockchain? I should have asked that question first!
MCDERMOTT: No, no, no we should always start with the consumer. The retailer though is gonna benefit absolutely. So the retailer will benefit from potentially better shelf life. If you know that this product is coming when it's coming and you know that these, I'm gonna keep going with mangoes. These mangoes were sitting in hot sun and so are going to go bad more quickly even though they have the same pick date as these other set of mangoes, maybe you want to get those out on the floor faster. The more that you have granular information about particular items, the more that you're able to make smart decisions on how you merchandise them. What blockchain does is provide the information so that along the whole path you are making the right decisions to maximize your chance of always running your business most efficiently. It's all about information.
CROWSON: What are the hurdles to get us there. What does blockchain face right now in terms of challenge?
MCDERMOTT: So my favorite analogy here is actually VCRs. You look at beta versus.
CROWSON: Betamax or VHS.
MCDERMOTT: And who wins? Is it the better technology? No. It's the one with an ecosystem. If you think about blockchain, what matters here is not the technology of any one transaction but the creation of an ecosystem where all transactions are participating so you have all of the information that's going on.
So the biggest challenge I see right now for the success of block chain is this adoption. How do you make sure that you're building VHS not betamax.
CROWSON: So the follow up to that is how do you ensure that?
MCDERMOTT: One of the areas where I think it's a little bit easier is something like food safety, which is not a competitive issue. Nobody wins when there's a product recall. No manufacturer is happy that their counterpart had a food recall because everybody gets hurt in a recall. It's not that you stop buying one kind of spinach. You pull all the spinach off the shelves everywhere across the country. It hurts the whole economy. And so if you think about this as a starting place and you say how do we get everybody engaged in solving a problem that is a true utility for the industry. I think that's where you see real leadership from key influencers in the space.So I think we are at this cusp and I think we’re ready. But it is going to take a lot of people really believing and working for it because it is not just about building a solution it’s about building an ecosystem and working together to make the solution work.
YIANNAS: The food system is absolutely too large for any single entity to do it alone.
CROWSON: Frank Yiannas doesn’t need to be convinced. He has seen the power of block chain in practice.
YIANNAS: I brought a package of sliced mangoes into my staff meeting. I put it on the desk and I said to my team, the traceback study starts right now. Hit the clock. I said tell me from where did these mangoes come from. What farm, what country? And do you know how long it took them to do that? It took them almost seven days. Seven days to do that because they had to actually contact the supplier, get paper records, they then had to contact the importer. So we've been working with IBM to digitize that so the information is captured on the farm with a handheld system. It's captured at the packing house at the supplier. And once we finish the proof of concept, we go to the block chain solution, just log on and my inputting a lot number or you could scan a QR code, how long do you think it took, how long do you think it took us to trace back? 2.2 seconds.
YIANNAS: We've gone from 7 days to 2.2 seconds in the ability to track food back to the farm. And not only that, not only do we track it back to the farm, but now because we're capturing that information on blockchain, we have additional information and insights at each point in the chain. So I've been doing this a long time and we've rolled out some pretty impressive initiatives that I shared with you.
CROWSON: Yiannas and Brigid McDermott agree that this helps everyone involved in buying and selling -- and eating.
YIANNAS: The idea of traceability or tracking food back to a source is important to all system stakeholders. Regulators want to do that if they're investigating an outbreak. We want to do that to optimize and enhance food flow and food chain efficiencies. Consumers want to know where their food is grown and I told you that it's a pretty long journey and it takes a long time. And I don't like to use this term too lightly. This is truly a game changer for food safety.
MCDERMOTT: Collaboration, coopetition, whatever you want to call it when different entities and the same entities, coming together with partners, suppliers and competition you are doing it in a way where the rising tide does raise all boats. And you’re confident that your boat is one of the ones that’s going up.
CROWSON: How do you think it will improve your life? Tweet at us @WalmartToday.
VOX: I love mangos. I can put with anything. I usually make it with Chicken, that sweet and salty sort of thing.
CROWSON: Also, if you like what you hear, take a moment to rate and review this podcast - it helps other people find the show.
VOX: It’s a good fruit! I didn’t know there was a whole podcast on mangos. That’s pretty funny.
CROWSON: Thanks for listening! See you next time.
ROBERTS: I was cleaning out my den the other day and found in an old box, a list of goals that I had made for myself when I was 29 years old.
CHARLES: That’s Carter Roberts, president and CEO of the World Wildlife Fund.
ROBERTS: I wanted to be married, have three kids, live in a house surrounded by big trees and sidewalks and front porches. I wanted to see the Himalayas and the Arctic and dive in the coral reefs of the Pacific. And believe it or not, I actually wrote down a goal: I want to lead a group people saving the most important places on earth. I actually wrote that down. And so I found this, and I talked to my board chair about it and said and good god I found this and look I accomplished all this, and now what do I do? And he said: make a new list.
CHARLES: I’m Charles Crowson, and this is Outside the Box, a new series about retail … and all things related. Today on the show: sustainability.
CHARLES: We hear this term everywhere -- and it seems more and more people are making informed decisions about what they buy, eat, wear, and how their lifestyles affect the environment. We also want to know that the businesses we rely on are doing the same. Today, we’re talking with some of the best minds shaping the present and future of smart, efficient and planet conscious business.
CHARLES: We’re starting with the man whose day job is to literally save the planet -- Again, Carter Roberts of the World Wildlife Fund, which was founded 50 years ago. They work to draw the world’s attention to saving animal species.
ROBERTS: And we realized the only way you can do that is to keep their habitat intact and as soon as you get to their habitat like the Amazon or the Serengeti or the Mekong or the coral reefs. you realize that people live there, that they are a part of that place and depend upon it. And then you realize to really save that place you've got not just to create parks but you've got to deal with the footprint of humanity from all over the world. Whether that's climate change food production, infrastructure, design you name it. And so we've grown to do all these things, to work in all those areas because if we don't we're not gonna succeed in our mission which is to build a future in which people live in harmony with nature.
CHARLES: So toward that movement of sustainability even as you just described it, one of the immediate reservations someone might have about the idea of a sustainable culture is it's so big. It's so vast. You just said Serengeti, you said Amazon. All of these ecosystems. It's more than some people can consider. How do we simplify that to something people might not be so afraid of?
ROBERTS: Oh look, this is all about saving the planet because it's our home. Period.
CHARLES: That's probably the most concise answer anyone has given us in the entire ordeal. I was expecting three minutes of exposition on this and you just nailed it.
ROBERTS: I could give you an hour but that's the bottom line. Is we depend upon this planet and nature in ways large and small. It's a source of joy to us as kids, it's a source of water, it's our source of food. It's the source of all the raw materials that go into the products upon which we depend. It is everything. When I started in this job I asked our guys, take all the places we care about and what are the biggest threats to those places. What are the things that are changing them. And you would expect the number one thing to be climate change. It's in there. But the other thing is food and food production. whether it’s Borneo and palm oil or the Amazon and beef and soy. You find that there is a number of companies in the middle who buy and sell these raw materials and products who have tremendous influence over how they are bought and sold. And the only way that you are going to get a handle on food production and climate change is to go to points of leverage.
CHARLES: You've been with the WWF now for twelve years, thirteen years you've been CEO for a dozen years. In that twelve year period as CEO with WWF, how far have we come?
ROBERTS: We produce something called the living planet report every two years. And it tracks the populations of species all around the world. And it tracks humanity's footprint. I'm here to tell you that both trends are still going in the wrong direction. We now consume one and a half times what the planet can sustain over the long run. When I started in this job it was one point two. And the populations of species are continuing to decline with some notable exceptions. The giant panda populations are going up, the tiger populations are going up, the rhino populations are under siege but still going up and those are all great success stories. So you have to seize upon those stories, popularize them and then give people the tools to do likewise in more places around the world. So I would say the private sector and the biggest companies are seizing on sustainability in a way that we didn't see fifteen years ago. And that's a huge shift.
CHARLES: What was the resistance fifteen years ago?
ROBERTS: I think if you track sustainability fifteen years ago it was kind of a nice thing to do, companies would put in their annual report. And then we went through a period where companies sought comparative advantage versus their competition in doing the right thing. Now we are seeing companies make it a strategic comparative as part of their business model. They are evaluating their employees and their leadership on the basis of sustainability. And now we're beginning to see companies work together. And I think the future is all these companies engaging their customers to do likewise. To give them the tools to make changes in their everyday lives and you see that with Walmart. We see that with Apple. We see that with all kinds of companies that they're not just lightning their own footprint, they're using their muscle and their reach and their marketing and their brands to get people to look at the world in a different way and to act accordingly and that's cool.
CHARLES: Carter Roberts has us thinking about influence...and leadership. Who ARE those companies inventing new ways of solving old issues? That brings us to Smithfield -- and its president and CEO, Kenneth Sullivan:
SULLIVAN: Someone asked me the other day, how I got into this business and I said I like to eat and have been working at it my whole life.
CHARLES: More specifically -- Smithfield is the world’s largest producer of pork.
SULLIVAN: In other words, we raise more hogs than anyone anywhere in the world we're raising twenty million hogs. We do that in partnership with literally thousands of family farmers certainly across the United States but also in places like Poland and Romania and Mexico. And so we have a very wide network of family farms that we work with but more than that we're producing a quarter of all the pork produced in the United States. So I like to tell people that if you're eating pork in whatever form whether it’s a pork chop or bacon or a sausage or ham, there's a very good chance it's come from Smithfield somewhere.
CHARLES: I saw one of the companies that you guys provide meat products for is Nathan's hotdogs. Of course the first thing I thought about was Joey Chestnut and the hot dog eating contest every year.
[SFX: NATHAN’S COMPETITION] “Ladies and Gentleman...
SULLIVAN: Well I keep threatening I'm gonna come up there in New York and I'm gonna participate in that contest. It’s a hell of a lot of fun.
[SFX: NATHAN’S COMPETITION]
CHARLES: What does the word sustainability mean to you?
SULLIVAN: Sure, I think sustainability really to me personally is about optimization and efficiency. At Smithfield though we define it really consistent with our five sustainability pillars. environment, being the first pillar, animal care, helping communities, hunger, and good food responsibly.
CHARLES: As the world's largest pork producer you work with a lot of larger farmers, family farms, generational farming. When you're talking about the five pillars of Smithfield and what your mission is along the sustainability spectrum, how hard is it sometimes to work with these generational farming families to say let's tweak here let's twist here. Let's change just a little.
SULLIVAN:: Believe it or not it's not that hard. What we've found is that by and large people want to do the right thing. And certainly when you talk about sustainability, fundamentally what you're talking about is doing the right thing. Our tagline at Smithfield is good food responsibly. What is responsibly mean? It means that we're trying to do things in the most efficient way possible. We're trying to optimize. That's good for business results but it's also good for the environment. It's good for our animals on the farms. It's good for a lot of different things. So as it relates to our business partners out there, really that's not a very difficult conversation. Certainly there are some old school animal ag people who are a little bit slow to the party if you will in terms of embracing some of the sustainability pillars that we have. But by and large I would tell you that people want to do the right thing and are intent on doing the right thing.
CHARLES: In the agricultural industry as a whole, not just in meat production, growing livestock and processing there, but also on the vegetation and fruit side, do you see that willingness across the entire industry?
SULLIVAN: I think it is. For example, in the production of pork, the principal ingredient if you will is the feed greens, and so corn, soybeans. To the extent that we're raising more hogs than anybody in the world, we eat more corn than anybody in the world. We use more soybean than anybody in the world. To put it in context, I think in the United States alone we're eating a hundred and twenty five million bushels of corn. That's a heck of a lot of corn. And we work with all our grain farmers on our sustainability pillars. We've got a fairly high profile partnership with the environmental defense fund. Some people scratch their head and say, environmental defense fund, isn't that sort of somebody who's against you as a big animal ag player. And the short answer is no. We have frankly the same goals which is we want to do what's right by the environment. So we've worked with them on a variety of different things including things like leveraging technology, like putting optical sensors on fertilizer applications. These optical sensors sense the crop and know when to apply the fertilizer and when to dial it back so that we're optimizing. Again I'll use that word probably over and over in terms of the sustainability discussion. We're optimizing what we do.
CHARLES: We think so much about the industry of agriculture and to the lay person we know a farmer.
CHARLES: We always remember Paul Harvey's God Made a Farmer. But when you begin thinking about what the agricultural industry is and who that farmer is and now you're talking about optimization sensors technology being introduced into this, it's mind blowing.
SULLIVAN: It is. There are many things that we do today that are far and away advanced from where we were a hundred years ago. By the way, we need it. The population has exploded on the planet we all call home and is expected to grow by another two and a half billion people I think over the next thirty or fifty years. And so we need to be efficient and we need to find ways to mass produce food in a responsible way. As the world has become more sensitized to the climate issues and the impact that we all have. Whether it's you sitting here, the two of us sitting here living and breathing, we're actually emitting some carbon footprint here. So the idea that everything we do has an impact on the environment, I think that idea has begun to crystalize in people's mind over the last couple of decades. And so therefore you've got big companies, big agriculture companies like Smithfield who are focused on it because we simply want to be part of the solution, not part of the problem. I think it is incumbent on us as a big companies, it's incumbent on us as Americans, as part of the human race that we need to be cognizant of the environment in which we live and breathe. It's our responsibility, it's our generation's responsibility to make sure that we're good stewards of the planet. And certainly, we have got to leave this world a better place. And I believe, I do. I believe that the large companies of this country are led by people who want to do the right thing.
CHARLES: Next we’re going to hear from someone who has dedicated his life to “doing the right thing”...Matt Knott, is the President of Feeding America, an organization that is working to end hunger -- and food waste. But his path wasn’t always clear…
KNOTT: You know, I worked in the food industry for over a decade. And I loved my work in the food industry, first with Quaker Oats and then as part of Pepsi Co.
CHARLES: And it was while at Pepsi Co that he had something of a realization:
KNOTT: I remember taking my team to volunteer at the local food bank. Just as a way to get to know each other a little better and to build some team comradery, but in the process we learned a little bit about people facing hunger in the city of Chicago in that case and I had no idea the magnitude of the issue and nor did I have any idea that food banks were working at the scale that they were. That organization, Greater Chicago Food Depository, has a warehouse that would rival any that would have been in Quaker Oats or Pepsi Co system. And I was just amazed.
CHARLES: And his amazement then led to an epiphany...
KNOTT: And I came to believe that vocation for anybody really ideally shouldn't just be about what you're good at. It should be the intersection of what you're good at and what the world around you really needs. And if you can find that, the intersection of those two things, you've really found your vocation. So that's what I was in search of and I felt like Feeding America offered me a chance to do that, do discover that vocation and to make an impact in the world.
CHARLES: So if X is the axis of success, does that make Y the axis of service?
KNOTT: I think that's a great way to think about it and always to be headed to the upper right in that kind of a framework, yeah.
CHARLES: And that’s exactly what Feeding America is about -- they have some lofty goals, but their mission is simple...
KNOTT: Our bold goal at Feeding America is to end hunger. We've got a vision of a hunger free America and we're gonna relentlessly pursue that vision.
CHARLES: As we drill down into hunger in America what is that misconception that many of us carry around?
KNOTT: I think many people just don't know it exists. They think about hunger, they think about malnutrition in sub Saharan Africa. They don't necessarily think that it could exist in the country that is the food producer to the world. But the truth of the matter is there's forty-two million Americans who are struggling to put food on the table everyday -- that's one out of every eight. Includes nearly six million seniors, thirteen million children. And that speaks to me as a father. Just thinking about how painful it would be to worry about whether you're gonna be able to put breakfast on the table tomorrow. So I think understanding the difficult tradeoffs that many, many Americans, they're making when it comes to just providing basic necessities for themselves and their families. we know that more than thirty percent of them are having to make difficult tradeoffs like deciding whether or not to pay the utility bill or the grocery bill.
CHARLES: For a number of people who live in America's heartland. We don't really grasp the idea of a food desert in a primarily urban setting. This is a very significant reality where there are people who might have access to food but it's bad food.
KNOTT: Well I think in particular in certain urban areas, lots of different industries have just pulled out frankly. And so you can't find a traditional grocery store in a lot of places and parts of Chicago for example or Baltimore.
KNOTT: They may be shopping at convenience stores because that's all that's there. Fast food outlets or so forth. And so I think food deserts are a real challenge, especially in urban areas.
CHARLES: Matt, you were talking about some of the systemic challenges faced with food insecurity. Explain some of those, what we might not know.
KNOTT: people can have many problems, but people who are hungry, they only have one. And you can't solve the other issues in your life if you're dealing with hunger. So we try to solve that issue first and then start to address some of the more systemic issues. And in particular, some of what we are learning is about basic levels of income and assets that can create some buffers for people when they experience shocks in their life. Like it could be a medical event. It could be your car breaks down. It could be a divorce. Something like that that just throws the family for a loop. And you don't have even a thousand dollars in your bank account to be able to pay the bills. And suddenly, you're starting to make these difficult choices about, gosh do I pay the rent or do I pay the grocery bill. Do I pay the doctor bill or do I just skip going to the doctor altogether even though I've got diabetes or heart disease, whatever the case might be. And so we're starting to think about how do we address some of those sorts of systemic issues so that people are in a better position to be able to provide for themselves, to be able to weather some of those challenges that life brings. And ultimately to be able to thrive. And provide for themselves and their families with confidence.
CHARLES: Sometimes people might have difficulty making connection between food insecurity and sustainability. Connect that for us real quickly here. What does sustainability mean to you?
KNOTT: Sustainability I think, in large part is about making sure that we take good care of the resources that are available to us and we do that in ways that don't harm the environment. And I think one of the things that I've come to learn is that food waste is a real problem. It creates dangerous gasses that can harm the environment. And there's a lot of food waste in the United States. It adds up to more than seventy billion pounds of food a year. More than enough to feed every hungry family, every hungry child or a senior or a veteran or mother or father in America. There's no reason we can't make a positive contribution to the environment while we're working to end hunger.
CHARLES: When you talk about food waste, how exactly do you define that?
KNOTT: In our case we're focused not on plate waste and food that's not consumable, we're focused, when I talk about about more than seventy billion pounds, that's food that's perfectly edible and safe, it's just for a wide variety of reasons, doesn't find it's way to the family's table ultimately. And it could be weather events, so there's fruit and vegetables that are in the field that don't look perfect. We Americans are awfully picky about our produce. It could be food that's in a manufacturing plant that is overproduced. Promotional products that become a little bit dated. They're still perfectly safe to eat but maybe they don't look perfect or maybe there's something wrong with the label. And you wouldn't believe how much that all adds up to. It's a lot.
KNOTT: It's a lot. And so we're working with the food industry to recapture that food, to recover it, And make sure that it stays out of the landfill and its highest and best use is to feed people, in particular to feed people who are struggling with hunger.
CHARLES: What can the individual do? What can I do? What can those of us here in the studio do? And even smaller companies that have smaller work forces, what can we do on our own personal level?
KNOTT: I think one of the simplest things to do is to learn a little bit about hunger in your own community. And an easy way to do that is to check out our website. www.feedingamerica.org. You can just type in your zip code and it'll point you to your nearest food bank. It's a great opportunity to volunteer in your community. Learn a little bit about hunger. But also to learn about how that kind of an organization is partnering with food companies, with distributors to be able to capture food that was going to go to waste and use it feed hungry neighbors. I think another thing is to try to learn about what happens to surplus food in your own.
KNOTT: If you're in a food company. If you're working for a distributor for example or a retailer or a restaurant. To learn about what do they do with their surplus food it can be difficult to think about how to systematize a food donation program. We've had generous support frankly from donors like Walmart that have helped us to fund new technologies like our meal connect system which is basically an app that allows any small business owner. If you own a restaurant, if you own small food company, to be able to post food donations online and we can match those food donations to a local charitable organization who feeds people. So we're continuing to try to innovate, to try to do that not only to address sustainability but to leverage that in a way that helps us to address hunger and to try to solve hunger.
CHARLES: Solving hunger -- big goal. Solving the issue of sustainability in agriculture -- big goal. Saving and caring for the future of animals and habitats -- big goal! The World Wildlife Fund, Smithfield and Feeding America are all playing a role. The thing that they all have in common? Is something called shared value...
KM: Shared value simply means that you will maximize your business value if you're addressing a societal need in a deep way...
CHARLES: ..a deep way that also creates societal value. Kathleen McLaughlin is the Senior Vice President and Chief Sustainability Officer for Walmart. What she’s talking about here is the idea that you can run a successful business and care for the planet at the SAME TIME. They can actually be be mutually beneficial. And corporations have to be leaders, thinking not only of their bottom line, but the planet’s bottom line...
CHARLES: She says she has an opportunity, through collaborating with suppliers, to remove a gigaton of emissions from supply chains. A gigaton. That’s ...one billion tons. Let me help put that in perspective -- according to some calculations that is equivalent to the weight of more than a hundred million elephants. Or more than than 6 million blue whales.
KM: So what we're doing through project Gigaton is inviting our suppliers to collaborate with each other, with us. And to try to draw down emissions. And we're doing it in a few different ways. So first of all, looking at agricultural emissions and accelerating some work we had started a number of years ago to promote more sustainable agriculture practices. And that's everything from fertilizer optimization to crop rotation, cover crops. and everything else that we can work on to lower emissions from livestock. Second, waste reduction. You can lower emissions by producing unneeded food in the first place or making sure food gets channeled into consumption. Reducing packaging. Energy. So renewable energy. Energy efficiency. Products themselves. How do we innovate products. LED lightbulbs is something we had spent a lot of time with GE to commercialize and make available at a good price point for people. Cold water wash is another innovation that we're excited to see through our suppliers. And deforestation. We've been working for a long time on palm oil, on soy, on beef from South America. We're looking at paper. So we'll be sharing our own tools and we want to make it easy for suppliers to share best practices with each other. And we're gonna launch this and really try to create a movement around this so it becomes much bigger than just us.
CHARLES: Creating a movement. That’s something that Carter Roberts, from the World Wildlife Fund knows a lot about. So I went back to him, to ask, what can people like you and me DO, even on a micro scale, to help make an impact?
ROBERTS: It is true that every single person in our society makes decisions everyday. how you get to work, what kind of food you buy, the things you purchase for your kids, all the many choices that you make. And what we want, our dream is for people to think about the consequences for the choices that they make. Consequences for the planet, consequences for people, consequences for the world. And to make that easy. Not to make it cod liver oil. To make it easy. And so for companies large and small, there are choices on how you source products, how you sell products, how you transport products. Everyday you make those choices. And there are better choices and worse choices. And this is all about sharing information, making the better choices that make a difference in solving the problem of climate change. Securing our water supplies. Securing our food supplies and all the rest.
CHARLES: Remember that list of goals Roberts was talking about earlier? The goals he set for himself so many years ago when he was 29 -- that he recently found in an old box? He’s serious about this strategy...
ROBERTS: At the end of the day, the most powerful thing a company can do is set targets. And then drive and update those targets over time. Meet them and then exceed them to secure our food supplies, our water supplies. And to protect our communities and children from the worst risks of climate change. If all you do is trod along the trail that somebody else has always followed then A, you're not gonna do anything new and you're not gonna use your brain. And so if you get off trail, and I do a lot of mountain climbing. And there is a great joy when you're off trail, you're looking at maps, you're using your wits, you get to where you need to go. But not by just turning your brain off. And I think the leadership that we're seeing with the leading companies who are really making a difference in our world is they're inventing new ways of getting after some of these old issues that we face.
CHARLES: Large projects or small actions, what are you doing? We want to hear from you -- tell us about how you’re working towards a more sustainable future. Tweet us @WalmartToday. Also, if you like what you hear, take a moment to rate and review this episode -- it helps other find us so they can hear what you enjoyed.
SULLIVAN: Someone asked me the other day, how I got into this business and I said I like to eat and have been working at it my whole life.
CROWSON: My name is Charles Crowson. And the name of the podcast is Outside the Box, a new series about retail...and all things related. What we’re doing is taking a look into the different layers that exist in the world of retail, e-commerce, social responsibility and where we all fit in both as consumers and as business leaders, toward improving our business and improving our way of life.
KNOTT: I came to believe that vocation for anybody really, ideally shouldn't just be about what you're good at. It should be the intersection of what you're good at and what the world around you really needs.
SULLIVAN: To make sure that we are good stewards of the planet. And certainly, we have got to leave this world a better place.
ROBERTS: If all you do is trod along the trail that somebody else has always followed then you're not gonna do anything new and you're not gonna use your brain.
CROWSON: If you’re a business owner or an entrepreneur - this is the podcast for you. If you’re a maker, a consumer, a doer -- this is the podcast for you.
ROBERTS: It is true that every single person in our society makes decisions every day. how you get to work, what kind of food you buy, the things you purchase for your kids, all the many choices that you make. Our dream is for people to think about the consequences for the choices that they make. Consequences for the planet, consequences for people, consequences for the world. And, to make that easy.
CROWSON: Our first episode comes out on May 30th! It’s about sustainability, and we’ll hear from the presidents and CEOs of the World Wildlife Fund, Feeding America, and more. Subscribe now, and you won’t miss a thing.