Monday, December 31, 2012

Recent Reading

Mayors are where it's at

"The deal would be you take no federal, state or city monies. You can do anything you want to make a living but you gotta live in Detroit for seven years with your family, and if you survive seven years we'll give you your citizenship. What would happen is they would buy those derelict houses and fix them up by hand, they would send their kids to public schools and force the schools to improve because people would value education as opposed to the people left in Detroit who are poor and don't understand the value of education. The carrot of offering the potential of being an American citizen is so great that you would get people to go to Detroit who would never otherwise go. The mayor of Detroit, Dave Bing, once said, 'Bloomberg doesn't understand. We don't have enough jobs here.' Yes, he's right. They don't have enough jobs and they never will unless they do something like this."
- Michael Bloomberg
You can say what you want about Bloomberg, the mayor of New York City, his proposal, and his typically insensitive language. But you can't argue with the fact that what he's saying is audacious, thought-provoking and might actually do something.
If you're watching the national fiscal cliff debacle, are sick of national politics and are seeking a glimmer of hope in elected public officials I recommend you take a look at some mayors. They didn't seem to get the message that government sucks and are doing some of the most innovative work in government.

I think part of what Bloomberg and his fellow try-something mayors get is that failure is an option. So many ideas are spoiled out of existence by people seeking perfection. Government seems particularly plagued by that phenomenon. In business it's not that way. We fail all the time, we kind of pride ourselves on it. In my experience it's the only way to learn and get better.

If you find the intersection of politics, cities, environmentalism and urban design interesting I recommend the documentary Urbanized (streaming on Netflix or rent/dowload at iTunes or Distrify) Among the heroes of the story are mayors who are at the forefront of urban design and its revolutions. In the movie there's an especially interesting point made by architect Rem Koolhaus: cities compete for people. What he means is that if you make a place where bright, ambitious people want to be, your city will become a bright, ambitious beacon and all kinds of good things—including business—will follow. Think of Austin and Portland. They're relatively small cities, dwarfed by million-plus metropolises like Houston or Phoenix, but their reputations, magnetism, and their economic and cultural influence are far larger than their size. They compete for people better than almost any other American city.

As I write this I recently learned that Cory Booker, mayor of Newark just helped some people in a car accident. This is on top of saving a neighbor from a house fire last spring and signing a huge education deal for his city with Facebook's Mark Zuckerberg. Like I said, watch out for mayors.

Thursday, December 20, 2012

The third stage of holiday grief

December 19, 2012

The 3 Stages of Mail Order Holiday Grief
1. Hiring grief: will we get enough people
2. Order grief: will we get enough sales
3. Shipping grief: will we ship them all out the door on time

The third stage has arrived. You can tell it's in effect when someone (Riki) says something like "Thank God it's Tuesday. It was Monday for three whole days."

We're now quickly rolling through the signposts of the last phase of holiday grief. The deadline for shipping a box to arrive with UPS ground shipping has passed. The deadline for 2 day shipping is gone. The deadline for overnight packages looms. Then there's overnight with Saturday delivery on Friday, select zip codes only, sorry!

This year Christmas falls on a Tuesday, the absolute worst day of the week for us mail orderers, especially those of us in the food business. Perishable foods don't like to travel over the weekend. It means the last day for most folks to ship for Christmas is today, Thursday, for delivery on Friday, five full days before Christmas. Bah humbug!

OK, now for the crazy numbers. We've been packing orders at a rate of one every 9 seconds 24/7 the last 10 days (with a short break for breath on Friday). Nine per second means 400 boxes per hour. Back in 1992, the first year I did a mail order Christmas, we shipped 113 boxes total on the biggest day. (It almost broke me.) This year it was 12,000, the week will total over 30,000 boxes. To put it in perspective, that's equal to what we shipped in June, July and August combined. 

You might have noticed I didn't mention much about grief. That's because we kind of skipped the grief part of the third stage this year. Outside of our order releaase computer that refused to work the night shift (it crashed in the evening and started back to work each morning) most everything hummed along. We're hand wrapping bread, cutting cheese to order, and making every gift one at a time just in time.

Friday afternoon it will go ghost quiet, a holiday cliff we cross every year and whose predictability does not make it feel any less eerie. The phones will go quiet. The boxes will be gone. The food will be absent. The shelves will be empty. Most of the crew will have left. Until then we hum with the sound of a hundred  people gathering food and stacking boxes into an endless stream of fifty foot UPS trailers.

Monday, December 17, 2012

The second stage of holiday grief

Our forecast board on December 17, 2012. We update it every day at 11:30.

The 3 Stages of Mail Order Holiday Grief
1. Hiring grief: will we get enough people
2. Order grief: will we get enough sales
3. Shipping grief: will we ship them all out the door on time

When we stop worrying about hiring enough people and start fretting about whether orders will come in we know we've left stage one and entered the second stage of holiday grief at Zingerman's Mail Order.

Half our year's sales arrive in the weeks between Thanksgiving and Christmas. This year that means about $5 million. The daily volume ramps up quickly. Where we're used to taking tens of thousands of dollars in orders a day we leap into taking hundreds of thousands a day in early December.

Because of a few factors — Thanksgiving's date, what day of the week Christmas falls on, how many weekends are in between each, when catalogs arrive in home — the flow of orders, or what we call "The Curve," is always different. That's true all year long, of course. It's just at this time of year small variations result in huge shifts of dollars. And huge shifts of stress.

This year's curve was great in December's first week, crappy in the second week, a little better in the third. Top that off with a whopper of a math miscalculation and we had a surge of holiday stress right around December 8th. We were off by 10 or 20% a day, which meant daily misses of up to $40,000.  By December 12th, when we discovered our math error, it had partly passed. On December 14th we had a $321,000 day, our second biggest ever — over half the sales of an entire month, typically — the grief was officially over.

On to stage 3.

Saturday, December 15, 2012

The first stage of holiday grief

My partner Tom gave ZMO a grand gift this holiday in that he clearly defined our three stages of holiday grief. These are what we go through every holiday. Probably every mail order company has them.

1. Hiring grief: will we get enough people
2. Order grief: will we get enough sales
3. Shipping grief: will we ship them all out the door on time

We just finished stage one and are firmly in stage two. Looking back at stage one we hired 400 people on top of the 60 regular crew, making us 460 strong this December. I just read that total seasonal hiring in the U.S. is 760,000 so we can count ourselves as .05% of that!

If you are a numbers nerd here are more to feast on. We spent $2,000 on help wanted ads. We took in 1,300 applications. That's a lot, but it's 600 less than last year when we hired the same number of people. Of the 400 hires, 100 help customers on phones and email (the office pictured above) and the other 300 work with the food, making the boxes and getting them out the door.  About 15% of this year's crew were folks who worked with us before. 

We hired everyone in 17 sessions. Each session has a kind of skills obstacle course with feats of strength, kind of like Festivus. For the service crew the obstacle course tests were typing, writing, a 4 question interview and a listen-in session on a live call to see if they want to opt out and not take the job (some people do). For the production crew the tests were lifting 20 pounds, picking cards by a set of codes, walking to a fast pace, computer scanning and, when we're hiring captain supervisors, we do a 4 question interview.

Thursday, December 13, 2012

Basic food math

"In order to make delicious food,
you must eat delicious food."

Tuesday, December 11, 2012

Chris Traeger and Ben Wyatt on Fat

 "I don't know if you know this but things with fat in them taste way better than things with no fat."

"Yes. Everybody knows that."

Friday, December 7, 2012

The postal system versus the medical system, which is worse?

There are plenty of worries about unknowns arising from the Affordable Care Act (AKA Obamacare). One that I’ve heard is that government intervention will turn the medical system into the postal system.

Forget about the fact that the premise is wrong—private health insurance companies will still pay private doctors, there won't be any government in the waiting room. But perhaps some aspects of the postal system wouldn’t be all that bad. I’d like to take a bleak moment to defend the postal system, at least with respect to the health industry. My examples aren't meant to line up apples to apples—delivering mail and delivering medicine are very different. I write these posts on what I think is the worst run industry in America from a merchant's perspective, trying to look at the problem health care has with its customers, not with its science. I don't think the post office is a beacon of great service so this defense won’t last long. But they do some things well and, in my opinion, a lot more than the health care industry does.

A recent example. I had to get my daughter’s first passport. I went to the passport website, downloaded a form that explained exactly how to go about it, then went to the post office without an appointment. I waited a short time for someone to review all the documents. They told me how much everything would cost and told me when it would arrive (it beat their arrival estimate). I was done in less than twenty minutes. Could any one of those things have happened with a doctor? Well, I’m sure they could. But for me they almost never do. Doctors don’t provide instructions on websites, don’t work without appointments, don’t tell you what anything costs, and I’ve yet to have a visit last fewer than half an hour, even though I only get to talk to the doctor for a couple minutes. Put the two next to each other like that and the post office comes out looking pretty good.

Here's another. The post office delivers—nearly every day, with remarkable accuracy. When’s the last time you mailed a letter and it went to the wrong place? (I can tell you it happens almost a half a percent of the time in the private sector. That’s the number of mis-ship complaints we get about UPS at Zingerman’s. That doesn’t sound like much but I bet it’s a hundred times more than the postal service.)

But I digress. I don't know how accurate medicine is and that's not the point. I'm asking about delivery. Does the health care industry deliver doctors to your home? Why not? Doctors used to make house calls, after all. Wouldn’t it be better for patients—especially the elderly—if they still did? We don’t even ask health care this question any more because we think delivered modern medical service is impossible. It’s not. Virtually everything else we purchase offers home delivery. Why not medicine?

The health industry is often lauded for its innovations in technology, surgery and drugs. Why don't they spend any time innovating on service?

Monday, December 3, 2012

Push emails are like good spam

I’ve become a fan of push email to serve up information at Zingerman's Mail Order. By push email I mean a note that arrives in your inbox without you asking for it. It's like spam but good spam. The useful more tasty kind. It tells you something you need for your job—or maybe it doesn't but you might get something out of it anyway. (We don't usually limit the recipients of push emails because it's easy for the crew who don't need the information to delete it.)

For example, we use push emails at ZMO to share information about new foods on Friday product launch days. We announce our web launch with a push email every Tuesday. We share our current financial information both weekly (big email) and daily (shorter one).  In some cases push emails have taken the place of meetings altogether.

You don't want to overdo it. Too many unbidden emails and it turns to spam. This is far from rocket science but I have learned some things that help make push mail work better:

Put a lot of information in the email
Go for a lot of data in one email versus many emails with light information. People can scan vast amounts of data quicker than you think.

Use titles like this
They organize the email and make it faster to scan.

Make a consistent structure
Keep the format of the email—headings, sections and so on—the same each time so readers know where to search—and what to skip—for the info they need.

Put new stuff on top
If something is different mention it at the beginning of the email. Many regular readers will skip to the section that's relevant to them but they almost always have to skim from the top to get to their section.

Get right to the data
Nuff said.

Use bold, use color
Spare use of bold type makes scanning quicker. Colors that are clear—when in doubt, stick to red for bad things, green for good ones—speed up scanning, too.

Use a fixed, repeating delivery date, usually once per week
This might be the most important feature. An email that comes every week allows people to wait to see if their question is answered before asking it. It's easy to remember that the email about new products comes out every Friday. You can have longer waits between delivery times—every other week or once a month—but it becomes more likely someone will need a question answered in the intervening time and call you. More problematically, folks will forget when the next delivery of information is due so they'll ask anyway. 

The main benefits I've seen from a push email is that it lets you communicate with less waste. It reduces back and forth by offering a reliable, regular beat of information. Often you'll find you're communicating less frequently but people think you're communicating more.