Indra Nooyi is not an idiot !

No No. PepsiCo is not foolish enough to launch Doritos for women. For Gods sake, PepsiCo is one of the greatest consumer marketing companies on earth. Sure, even the finest companies can lay a goose egg once in a while. But  not such an obvious bloomer like Doritos for women.

The brouhaha started with an interview Indra Nooyi, the Chairperson of Pepsico gave to Freakonomics. As reported in the New York Times -

 Ms. Nooyi told the interviewer that women did not eat Doritos the same way men did.“They don’t like to crunch too loudly in public,” she said. “And they don’t lick their fingers generously, and they don’t like to pour the little broken pieces and the flavor into their mouth.”She was asked whether PepsiCo — which owns Frito-Lay, the manufacturer of Doritos — was planning “a male and female version of chips.”

Ms. Nooyi responded: “It’s not a male and female as much as, ‘Are there snacks for women that can be designed and packaged differently?’ And yes, we are looking at it, and we’re getting ready to launch a bunch of them soon. For women, low-crunch, the full taste profile, not have so much of the flavor stick on the fingers, and how can you put it in a purse? Because women love to carry a snack in their purse.”

The Sun (of the  notorious British tabloid fame) took this and reported that Doritos for women was being launched. Social media picked it up and hyped it with juicy headlines.

Feminists responded by lashing out and saying this simply reinforced gender stereotypes. Men  lashed out saying this was PC going too far. Sending a tweet is easy - you don't have to think and you can spew whatever banality you wish to without any consequence;  just ask a certain old man occupying a seat of power. And then before you could say Doritos, a full blown controversy had erupted. The company had to issue a statement that No, they were not launching Doritos for women !

Indra Nooyi must be scratching her head in bewilderment. All she was outlining in her podcast was how Frito Lay really tried to understand consumers, tried to get insights and tailor products accordingly. Very likely they may have launched a variant that was less crunchy, if that's what women preferred. But they wouldn't do something as dumb as launching a "Doritos for women".

Just goes to show how careful anybody has to be when making a public appearance. It seems altogether appealing not to appear in public at all - after all no human is infallible enough not to utter an inanity. It also shows how lots of people have nothing else to do but to respond to every nonsense and tweet some rubbish. A certain distinguished reader of mine is a prodigious tweeter. He may want to pause :)

Read More

CEOs sacked for conduct don't deserve severance pay

This blogger has been fascinated with lululemon for some time. The Vancouver based company has been peddling fashion wear for yoga and been successful at it. Firstly this blogger is amazed that you have fashion wear for yoga. Secondly, can a company really be named lululemon ? And spelt without a capital L ? There was also the business of yoga pants that, er, revealed too much, a few years ago. With that sort of pedigree, it is a "must follow" company !

(Wunder Under Hi-Rise 7/8 Tight Full-On Luxtreme 25" for $98.00 USD - Note the price !)

They are in the news again. They fired their CEO yesterday. The gobbledygook announcement they put out said "lululemon expects all employees to exemplify the highest levels of integrity and respect for one another, and Mr. Potdevin fell short of these standards of conduct." In plain English, the Board fired him. He did something wrong, relating to employees, and they fired him. Plain and simple. Nothing earth shattering about that - CEOs are fired for a variety of reasons and this happens all the time. But clearly he was fired, not for poor performance, but for something he should not have done with employee(s), but did. We should not speculate further.

So far nothing spectacular. But what got my goat was also the statement in the announcement that "Potdevin will receive a cash payment of $5 million, including $3.35 million upfront and an additional $1.65m over the next 18 months, according to a separation agreement filed with the Securities and Exchange Commission." This is outrageous. He's guilty of misconduct and you pay him $5 million ? I'm gobsmacked. Yes, there must have been a separation payment in his employment contract. That's standard in almost all CEO contracts. Why CEOs - any employee's contract. You have to be paid a severance pay (however measly it may be) if you are fired.

But this guy is being fired for wrong conduct. Would any low level employee guilty of the same conduct as Mr Potdevin ever be paid a severance pay ? No chance ? Then why should he be paid simply because he was the CEO. If there was an iron clad clause in his contract that said he would be paid no matter what the reasons for firing are, then the guys who drafted such a contract must be fired and made to pay a fine equal to this severance pay.

This sort of action is why companies are hated by the general public. Any corporate action must not only be fair, but be seen to be fair. The Board of lululemon deserves to be fried , roasted and hauled over coals. It is a listed company. What are the shareholders doing ?

CEOs are exactly the same as any other employee of a company. I have no problem with them being paid handsomely for the work they do. But they should not be paid for conduct that necessitates a firing.

Read More

Reading this post may make you blind

We've all made fun of Americans and their crazy law of torts. That's why you have such gems such as "Contents Hot" on a coffee cup or a "Remove baby before folding" sticker on a pram. In that same vein is the recent move in California that may soon have the warning "Coffee Causes Cancer" in coffee shops !  Granted that the land of the free scores somewhere mid tier in the international rankings of IQ, but still .....

A news item about P&G and Tide laundry pods however made me pause. P&G has released an ad featuring  Rob Gronkowski, the New England Patriots' star exhorting people not to eat Tide laundry pods ! WTF ? 

Apparently some teenagers have started a campaign called the 'Tide Pod Challenge". You are supposed to eat a Tide Pod and then post the video online. Reportedly some 40 cases of this nonsense have already happened in the first 15 days of 2018. It became serious enough for P&G to take note and issue the aforementioned ad exhorting people to wash clothes with their Tide laundry pod and not eat it. Without a doubt, their legal department opined that if they kept quiet, it was only a matter of time before they were slapped with a class action suit from a parent that the company was liable because they did nothing to prevent their children from eating the damned pod !

The purpose of this post is not to rail against the stupidity of on line antics. There is enough and more written on that. But where does personal responsibility end and where does company liability begin ? We seem to be living in a day and age where there is no personal responsibility whatsoever and its always someone else to blame. If its a rich juicy company, then great. Blame them and sue for a zillion dollars.  Is it the job of a company to monitor every nonsense that's happening on social media and guard against them ?

I am taking no chances. I am a poor man and will be bankrupted if you sue me ! Please therefore take note that reading this post on a screen may be injurious to your eyes. Please also note that if you are sipping coffee at the same time it might spill and burn your thighs as it is hot !!

Read More

HQ2 Update

Well, John Oliver got on the bandwagon too.

Read More

Insanity in Property

                                                                      (Photo : Google Maps)

 

The world's costliest building it has become. Yesterday, "The Center" in Hong Kong - a 73 storey landmark was sold for $ 5bn. Yes, FIVE BILLION US DOLLARS. For a single building. No you are not hallucinating. It really did happen.

The Centre was a jewel in the portfolio of Li Ka-Shing. If you don't know who he is, well, he was, and probably is, Mr Hong Kong.  One of the richest men in the world. For long he has symbolised money, power and all the glamour of Hong Kong.

This post is not about the old man. It's about insanity in property valuations. Yes land is scarce (anybody who has been to Hong Kong knows how scarce). And yes, it is demand and supply that sets prices.  And yes, it is a free market - nobody is compelled to buy or sell at any price. But even then, it is only right to pause and reflect on what such insane property valuations mean.

It means, most of the world's population cannot afford a house. Full stop.  This is one of the biggest problems in the developed world (ask any Brit how bad it is), and increasingly in the developing world. It simply drives up the cost of doing anything . In India for example, the tuition fees in a school are not for teachers - it is really to pay for the property. Ditto hospital costs. It is also the reason why you will never see a typical supermarket in the city of Mumbai .

Such ridiculous property valuations are one of the greatest causes of wealth inequality. The very few, who for historical reasons happened to inherit land, or buy property make wild fortunes at the expense of the large majority. After all any pricing is simply the value that society collectively places on  any dimension of life . Is anybody in the world seriously going to argue that property must be placed on a far higher pedestal than virtually anything else in life ?

Back to the $5 bn building. In case you have some difficulty comprehending what $5 bn is,  it will pay for 12 years of Honk Kong's spend on Child and Family Services or  6 years of the spending on the elderly, or 7 years of spending the on the disabled or 20 years of spending on youth or 2 years of the entire police budget or 4 years of the health budget ...... Shall I go on ?

Readers must know that this blogger is taking a grave risk by putting up this post. A reader, who is a dear friend has castigated me for becoming a raving loony leftist and has threatened to personally come and clobber me if I write one more example of becoming a "commie" in old age ! I will have to take precautions for my safety tomorrow !!

Read More

Xi who must be obeyed (with apologies to The Economist)

The title of this post is directly stolen from The Economist which ran a cover story by this name a year or so ago. They themselves were punning the quote from here.

The much awaited China's People Congress ended today with the expected climax - the unveiling of the new Politburo Standing Committee ; the men who will run China for the next five years. More of this in just a little while. This ended a week of speechifying and staged events.

First, the two things that stood out during the days preceding the event today.  Xi Jinping opened the Congress with a speech lasting an incredible three and a half hours, reaching new heights of torture and boredom. It was a hugely self confident China strutting about as a world power, with Xi vigorously patting his own back. He outlined some of the directions for the next five years which were typically broad motherhoods, but gave some clues on where they are heading.

The most important outcome was the enshrining of "Xi Jinping Thought" in the Communist Party's Constitution. This is a peculiarly Chinese obsession. Their infatuation with obscure theories and doctrines knows no boundaries. "Mao Zedong Thought" was supposed to be the guiding doctrine of the Party - never mind that it is rubbish, the Party has long ditched many of that nonsense, etc etc. Then Deng Xiaoping "Practice" was enshrined into the Constitution after his death. At the end of their terms Jiang Zemin and Hu Jintao's "theories" were also included, but their names were not mentioned (such semantics are very important in China with those two acknowledging that they are a step behind the two taller and earlier leaders). Xi hasn't bothered with any such finesse. Halfway into his term he has enshrined his name and "Thought" - the implication being he is Mao's equivalent and even above Deng. A dangerous move almost Trumpesque is self aggrandisation. His "Thought" is mostly bland with lots of garbage , but who cares. These are political moves cloaked in ideology.

And then today, came the line of seven men who walked in, and that was how the world got to know about the new Standing Committee. Readers of this blog may recall that this blogger made a prediction in this post a month or so ago. I got one thing wrong - that Li Keqiang the Premier would be dropped and that Wang Qishan, Xi's right hand man would stay on beyond retirement age and would become the Premier. That didn't happen. The powerful Wang retired and Li has stayed on as the Premier. I predicted a 5 man Standing Committee reduced from 7 (that didn't happen) but also named the potential seven man Committee if it stayed at that number. I got that dead right, including the order of seniority - after Xi and Li came Li Zhanshu, Wang Yang, Wang Huning, Zhao Leji & Hang Zheng. I got real lucky !

Here is my take on the implications of what happened over the last week

- Xi is all powerful. That we knew of course.
- Xi has decided to not break all traditions and to preserve some of the norms and continuity. Hence the  retirement of Wang Qishan and the continuance of Li Keqiang.
- No successor to Xi has been named, as expected. This leaves Xi's options open. He can stay on as a power centre either formally or informally after his term ends in 5 years.
- The two possible successors Hu Chunhua and Chen Min'er are on trial. They have to earn the right to succeed over the next 5 years. But even after, they will probably have to be subservient to Xi.
- The Party is going to tighten the hold on China even more. Forget any liberalism, tolerance and such other "esoteric" concepts.
- China will be aggressive in world politics. The world simply has to learnt to adjust to that. America will be the county most affected. It will be on the losing end more often than not.
- Zhao Leji will be the new Wang Qishan. He will continue the anti corruption drive and Xi's political opponents will continue to be targeted.
- China is entering into dangerous territory of authoritarianism.  Chinese history shows  how much the entire country loses when such autocratic tyrants take charge - recent examples of Ci Xi and Mao are enough to illustrate this danger. There is every risk of Xi going the same way - generating sycophants, staying on too long, getting drunk on power and doing stupid things.
- The Deng Xiaoping era is finally over (that it lasted 25 years after his death is amazing by itself). Most of the safeguards he tried to institutionalize are slipping. The wisdom of Deng is being frittered away. In many ways, he is the loser from what has happened. China will learn to its cost, the implications of ignoring its wisest man in recent history.

Life returns back to normal in China. This blogger will not blog about Chinese politics for the foreseeable future. A parting thought however - watch out for Hu Chunhua, Chen Min'er, Zhao Leji, and of course, above all, Xi.

Read More

Wooing HQ2 ? Yuk !

If you are an American, here's a a nice issue to distract you from your fixation about you know who and direct your attention to a different issue you can get all worked up about.

Witness each city falling over each other and doing the most stupid of things to land HQ2. Tucson Arizona, where one of the readers of this blog lives ,  uprooted a 21ft cactus and tried to deliver it to HQ1. The mayor of Kansas City actually bought one thousand items from the company in HQ1 and wrote a review of each one of them. Mayors of cities are looking silly in videos that they have made asking Alexa where HQ2 is going to come up and Alexa answering of course, the city they are mayors of. Shall I go on ?

If you are wondering what all this hullaballoo is  about, this is all to do with attracting Amazon's second head office. Amazon is based in Seattle (this is HQ1). They want to create a HQ2 somewhere else. And why are cities willing to stand in a line and kiss Bezos' ass (cue the nod to the awful American version of the Queen's English !). Because he is promising to invest $5 bn and create 50,000 jobs. How did they come to this magic figure of investment ? Because he says the average salary of the jobs created would be $100,000. 

The antics of Tucson and Kansas City are harmless on their own. HQ2 won't come there anyway. The real danger is the big cities offering tax breaks to Amazon. Without a doubt this will happen.

This is a terrible idea. Cities and states that do sweetheart deals to tempt businesses into moving are doing an appalling act of profligacy.  This is worse than a bribe.  Think about it - this is a perfect way of taking money from the poor (remember indirect taxes are not progressive and a fair amount of the state revenues in the US come from indirect taxes) and giving it to somebody who does not deserve or need the money. One city does this , and the next city will do the same for another company.  And before you say Bingo, everybody has been given a dole.

The right way to attract companies is to do the boring things - create infrastructure, make a talent pool available by vigorous education and training, attract outsiders by making it a great place to come and live, have a favourable business atmosphere in the form of ease of doing business and reasonable tax rates.  That is when companies will come and stay on. That's why New York in Finance and the West Coast Cities in technology are what they are.  Not because they gave tax breaks.

If you are an American, you should vigorously protest against your city doing a sweetheart deal with Amazon.  

For Indians, who can look at all this with an amused smile; we have of course been long guilty of doing such deals with companies. But I want you to get agitated in a different angle. The capital of the IT industry in the country did all the right things 30 years back - great place to live in, pleasant weather, abundance of talent, a cosmopolitan place for people to come, etc etc. It did not give a tax break. And yet every IT company worth it's salt came.

And then this city let it all go to seed and become the appalling wreck of a city that it is today.  This is the best way to drive every company out. No member of the Homo Sapiens species will ever come to this place again. Instead the entire population has mutated into Pithecanthropus Erectus, which being extinct, is delighted to be able to come back into existence even if condemned to living in a hellhole ! How does this blogger know of such a mutation ? Because he has mutated himself !

Read More