by Patricia Sellers

New-product innovation tends to be 1% inspiration and 99% perspiration.

Here’s that 1% that led to the creation of a hot little company called Sheex: One afternoon in the summer of 2007, Susan Walvius, then the head women’s basketball coach at the University of South Carolina, was at practice and wearing a pair of over-sized, super-soft, performance-fabric shorts. “I’d love to have bedsheets made out of this stuff,” Walvius said to Michelle Marciniak, her assistant coach.

“Let’s do it,” Marciniak replied.

The 99% perspiration: These two athletes took their idea–”performance bedding,” if you can fathom that–and ran with it.

They lined up R&D help from the Darla Moore School of Business at USC.

They figured out how to apply to bedsheets the moisture-wicking and heat-transfer technology that Nike (NKE) and Under Armour (UA) use to make athletic clothing–and patented the technology for sheets and blankets.

They quit coaching last year. They raised $1 million from friends and family, picked a name, Sheex, and after hustling far and wide to find a manufacturer that could produce the high-tech fabric in the form of sheets and pillows, they contracted with a factory in California.

They started selling Sheex online in April. The tagline: “Sleep Better. Play Better.” It appeals to professional athletes, weekend warriors, and–though Walvius and Marciniak would never say it–menopausal women.

In September, Fortune selected this duo to be among 10 Most Powerful Women Entrepreneurs–a new program that we recently launched with American Express (AXP). The Sheex founders and nine other honorees attended the Fortune Most Powerful Women Summit. There, Walvius, 45, and Marciniak, 36, appeared on an entrepreneurs panel along with SBA Administrator Karen Mills and Gilt Groupe CEO Susan Lyne.

Ever since, they have ferociously worked the network of MPWomen Summit participants–meeting with Allen & Co. investment banker Nancy Peretsman, Jones Apparel Group (JNY) COO Cindy DiPietrantonio, bank-industry analyst Meredith Whitney, and others. Today, I asked Marciniak how many nights in the past two months she and Walvius have been back home in South Carolina. “Three nights since September,” she replied. “Six total since June.”

They’re constantly on the road, running their business from planes, trains, automobiles, and even buses. Constant hustle. Two weeks ago, in a meeting with Heidi Ueberroth, the NBA’s head of global marketing partnerships, the Sheex women struck a game-changing deal to distribute their products in the NBA’s flagship store in midtown Manhattan. That could lead to distribution on the NBA and WNBA websites and team sites and stores as well.

Full disclosure: I first met Walvius and Marciniak in July at the LPGA U.S. Open in Pennsylvania–and learned that Marciniak went to my high school, Allentown Central Catholic, where she was the top-ranked high school player in the nation. They called her “Spinderella” back then. She went on to play for the NCAA champion Lady Vols at the University of Tennessee, where she was MVP. I’ve come to know Marciniak and Walvius fairly well and have given them a few leads that have helped them with their business. It’s important to acknowledge that, but it shouldn’t detract from their achievement.

Here they are on video talking about their hustle to build Sheex–though as long as they’re using their own product, I guess you’ll never see them sweat.

P.S. Another window into Marciniak’s raw ambition is a 1998 cover story in Sports Illustrated about her relationship with her former coach at the University of Tennessee, Pat Summit–who today has more career wins than any other coach, woman or man, in NCAA basketball history.

I’ve been reading Credit Suisse (CS) analyst Gary Balter’s reports on hardline retailers since the mid-’90s, when I wrote about companies like Home Depot (HD) and Sears (SHLD). Balter is not only a savvy analyst. He’s also a very good writer. This morning at 7:17, Balter emailed this note to clients about Black Friday shopping, which he titled “Bring Back the Good Old Days.”  I’m on his email list, so I read it and enjoyed it so much that I asked him if we could reprint it on Postcards. “Absolutely,” Balter replied. So here’s a veteran Wall Street analyst on how Black Friday 2010 is upending our holiday shopping rituals.–Patricia Sellers

Guest Post by Gary Balter, managing director and senior analyst, Credit Suisse

What is happening to America? For years, we looked forward to getting together with the in-laws on Thanksgiving, watching some football, eating some turkey, and most important, pouring through every Black Friday ad and dividing up which stores we would each wait in line for. Waking up at 3 a.m., we would not only rush to get in line but would be in communication with the team–figuring out if Circuit City had fewer people in line, by 4 a.m. knowing if we would get one of the better door-busters at Best Buy (BBY), what the lines were like at Wal-Mart (WMT), etc.

Things began to change well before the Internet. About six years ago, CompUSA (SYX) decided to begin its Black Friday sales at midnight. That meant getting in line on the way back from turkey dinner, and then getting but a few hours of sleep before beginning the hunt in the a.m.  Of course, since it seemed that every CompUSA purchase required one to fill out a rebate form, that effort used up any time otherwise reserved for sleep.

Returning home from all stores by 8 a.m. at the latest, we would call the family and discuss splitting up the prizes, meeting somewhere between New York and Allentown, Pa., to celebrate together. Total savings on anything we really needed was likely nothing, but the thrill of the hunt kept us going. Friends of our cousins, when meeting us, would know exactly which product we had waited for and how much money we had “saved.”

A few years ago, sites like bfads.net started to compare all of the Black Friday ads. Although it made it easier, it seemed to take the thrill out of comparing the products. However, even with that, we still had the cold weather to look forward to the next morning.

About four years ago, our world changed. We discovered that in some stores, including Circuit City, one could go online on Thanksgiving and buy the Black Friday ads. The following year, others followed, but the better stores still kept their best sales for those who would wait in line.

This year, we are getting Black Friday sales for weeks before Black Friday at Sears, Kmart, Wal-Mart and Best Buy, among others, and have the ability to buy just about every ad on-line, with many stores opening on Thanksgiving. Looking at what looked like prizes worth standing in line for, at Staples (SPLS), for example, we were dismayed to read that we could buy the same products on-line from 6 a.m. to 10 a.m. That is going to hurt sales of winter clothing, as we won’t have to stand in below-zero temperatures for that sliver of a savings.

May we suggest that someone in the government, at least in the colder northern states, pass a law that does not allow one to call savings ‘Black Friday’ until Black Friday? Until then, enjoy the warmth, and Happy Thanksgiving.

Steve Jobs is Fortune’s “CEO of the Decade.” As my colleague Adam Lashinsky says in the current issue’s cover story, Jobs has created more than $150 billion in shareholder wealth–meanwhile, “transforming movies, telecom, music, and computing, and profoundly influencing the worlds of retail and design.”

I’ve met Jobs just once, three years ago, when he came to Fortune’s offices here in New York. I remember, he walked into our conference room in his uniform–the black turtleneck, the jeans, the sneakers–and sat down beside me. What could be cooler? For 90 minutes, he demoed a sleek little gadget that was weeks away from launch. Even the most jaded journalists were dazzled. It was the iPhone.

To help report the Jobs cover package, I walked over to Avon (AVP) and interviewed Chairman and CEO Andrea Jung. She didn’t know Jobs well until early last year when he asked her to join the Apple (AAPL) board. Now she’s the only female director, with six guys. She’s also on the board of another famous company founded by a famous creative guy: Thomas Edison. That’s General Electric (GE). So Jung has a front-row seat to how power works, and innovation as well.

Here’s Jung’s first-person take on Jobs.–Patricia Sellers

Steve called me one day two years ago and said, “I’m in the city, Can I come up to your office?” He sauntered in, wearing his black turtleneck, jeans and sneakers. He showed me the new shuffle. We had had some conversations before. I was a huge admirer of the company. There isn’t another consumer business like Apple. About six months later, I joined the Apple board.

All of us would like to think that we’re as focused on the consumer and the end-user experience as Steve is—that maniacal passion for the best phone, the best mp3 player, the best PC, the best retail experience.

Steve is singularly passionate about making products that people love and understand. He does it in a very black and white way, while the rest of the world gets caught up in the gray–or caught up in themselves. He is, on the one hand, the most simple and clear thinker. I so often think, ‘It sounds so simple.’ But he’s taking on things that are extraordinarily complex and arguably risky.

He breaks down barriers. If you have that disruptive vision, you don’t look at historical facts to make a new future.

Steve refuses to compromise on integrity or the consumer experience for the sake of commercialism. He’s laser-focused on getting it right. It’s a great lesson in this quarter-to-quarter world. I leave Apple board meetings thinking, ‘I’ve got to do a better job.’

The board is small—seven directors–smaller than most boards, including Avon’s. There is an extraordinary openness in the board room, and it’s incredibly interactive.  Any board member would feel free to challenge an idea or raise a concern.

He’s a real listener and wants your opinion. He’ll call on a Sunday—like one day he called to let me know that they redid the store in Soho and wanted to know what I thought of it. My son will look at my iPhone and say, “Steve Jobs is calling!” Not many CEOs have that effect on 12-year-olds.

I’ve been really impressed by his humility—his willingness to talk about mistakes or things that need to be corrected. Or things they wish they hadn’t done. It’s been not only gratifying, it’s been great. I feel like I’m part of history being made.

I was not in Germany for the fall of the Berlin Wall 20 years ago today. But I got a front seat to business history-in-the-making three months later, when I went to East Germany to report a story about Coca-Cola’s (KO) aggressive ramp-up in Europe following the Communist collapse.

It seems like yesterday.

Talk about a capitalist invasion. I remember how euphoric–genuinely euphoric–East German consumers and shop-owners were to suddenly have access to not only Coca-Cola but “luxuries” like bananas. Bananas! East Germans were, until the Wall came down, practically as unfamiliar with bananas as they were with Fortune magazine.

The visit was surreal, in so many ways. I flew on the Coke plane (no shame in corporate jets back then) on a glorious sunny Sunday from Weimar, a gray city in East Germany, to Nice, in France. Polly Howes, the young and eager Coke PR woman, and I then helicoptered over the deep-blue Mediterranean to Monte Carlo. Coke’s top brass was convening its senior managers and bottlers at Monaco’s elegant Hotel de Paris.

Walking into the bustling lobby, I ran into Don Keough, Coke’s president and Roberto Goizueta, the company’s CEO, who was wearing canary-colored trousers. What a scene! It was stranger still since Goizueta, whom I had come to know, was a quiet, cerebral chemical engineer. Not the yellow pants type of guy. But he was celebrating that day. Here was a man who grew up in Havana and fled Cuba in 1960–now navigating Coca-Cola, the icon of global capitalism, into new markets, now free and open.

Coke’s “speed and seat-of-the-pants decision-making,” as I called it in my 1990 Fortune story, seemed to be just right at the time. Now, 20 years later, we can see how right Coke’s aggressive response really was. Coke’s market share of carbonated soft drinks in Germany stands at 39%. Pepsi’s (PEP) share is 6%, according to Beverage Digest. Consumption of Coke products has risen significantly. And one fellow who was, back when the Wall fell, key to Coke’s European expansion, has risen as well. He is Muhtar Kent, now Coke’s chairman and CEO.

Here’s an excerpt from my 1990 story, “Coke Gets Off its Can in Europe”:

[Coke's bottling plan in] Dunkirk increased production in a flash after the Berlin Wall fell last November. ”If it hadn’t been for this plant, we wouldn’t have been able to move into East Germany so quickly,” says Goizueta. Coca-Cola has left competitors in the dust in East Germany, and the chairman predicts that annual sales there should reach 100 million cases — around $1 billion at retail — in two years or so.

Coke’s success in East Germany shows the increasing importance of speed and seat-of-the-pants decision-making. Heinz Wiezorek, 51, president of the German division, was traveling in Rochester, New York, last November when he saw the Wall fall on TV. He called his West Berlin bottler and said, ”Get Coke out there!” Border crossers in their sputtering Wartburg and Trabant automobiles received free cases of Coke, while East Germans on foot got six-packs and single cans. At one checkpoint, delivery trucks dispensed over 70,000 cans in a few hours. To Wiezorek, diving in fast was crucial. ”There won’t be two colas in restaurants and small outlets,” he says. ”They’ll choose the one that’s first in the market.”

One day in January while strolling East Berlin’s Alexanderplatz, Wiezorek and Coca-Cola senior vice president Doug Ivester (since promoted to head Coca-Cola USA) made a quick, risky decision to accept East German currency, even though they then couldn’t convert it into Western money. Coke and other companies selling in soft-currency markets instead have almost always countertraded, exchanging their goods for local ones, then selling the local products in the West for hard cash. Coca-Cola plans to invest $140 million in East German bottlers, which will package and sell Coke locally.

Ivester, by the way, went onto great success, as Goizueta’s No. 2. After Goizueta died of lung cancer in 1997, Ivester moved up to CEO–and lasted just two years before the board pushed him out. After a couple of poor CEOs and years of disappointing results, Coke finally got back on track under chief Neville Isdell. And now Kent is steering Coke aggressively again.

“The age of thrift is here. You have to do innovation at both ends–premium innovation and innovation for the value consumer.”

– PepsiCo (PEP) chairman and CEO Indra Nooyi in a recent Q&A with Pattie Sellers. No. 1 on Fortune’s 2009 Most Powerful Women in Business list (for the fourth year in a row) Nooyi today delivered another quarter of solid earnings. PepsiCo beat analyst expectations with net income of  $1.72 billion, up 9% over last year.

Nooyi is relentless in reinventing a company that many others might have thought didn’t need reinventing. Investing in healthier products, reorganizing her core team, spending billions to acquire Pepsi’s two largest bottlers…the list of changes go on and on. “Any capital we invested in the company has to be rethought,” Nooyi said in the interview, noting, “The bottom line is: Through this downturn, you have to increase your investment, not cut back.” She added, “Now is a wonderful time to look for disruptive models.”

Click here for a series of video clips from Pattie’s interview with Nooyi. –Jessica Shambora

Hey, Starbucks lovers–and critics too! Have you taken the Starbucks Via Taste Challenge? The drip vs. instant coffee faceoff began this morning in Starbucks (SBUX) stores across North America.

If you want to know the science (it involves micro-grinding) behind Starbucks’ new instant, check out this story today by my Fortune tech-writer colleague Michael Copeland. He talked with Andrew Linnemann, Starbucks’ director of green coffee quality and operations, whose mission these past two years has been to make Via worthy of Starbucks branding.

The mission is incomplete, as I see it: I did my own taste tests earlier this week and gave Via lukewarm reviews. So, what do you think of Via?

P.S. To read a barista’s advice to Starbucks CEO Howard Schultz, click here.

Addendum: The Starbucks Via Taste Challenge kicks off Friday and runs through Monday in Starbucks stores across the U.S. and Canada. But I got a head start Tuesday morning, as I noted in the post below: I disagree with CEO Howard Schultz’s “guarantee” that you won’t be able to tell the difference between Starbucks’ drip and its new instant (or “ready brew,” as he calls it). Starbucks Bold drip handily beat Bold Via in my taste test–for what it’s worth. This morning (Wednesday) at my local Starbucks, I tried the lower-test brews: Pike Place drip vs. Columbia Mild Via, side by side. Verdict: Via wins. Then again, what true coffee lover loves Pike Place?

“We’ve literally cracked the code on being able to replicate a cup of Starbucks coffee that I can guarantee you would not be able to tell the difference.”

- Starbucks (SBUX) CEO Howard Schultz on his entry today into the $20-plus billion instant coffee market. I tried Via, Starbucks’ new product, this morning: The barista served me a cup of the new instant bold brew and a cup my usual bold drip coffee, and I drank them side by side.

Howard, I have to tell you, they do taste different. Your new Via lacks the burnt taste that causes some people to call Starbucks “Charbucks.” I actually prefer the burnt taste of your bold drip. Via seems to me to be short on flavor. Though the barista insisted that the regular Via is better than Pike Place drip.

It’s interesting that Starbucks is introducing its value brand, Via (“less than a dollar a cup,” notes Schultz in the video below), the same week that the guy who tried to balance value and quality and got the boot, Jim Donald, landed a new CEO job elsewhere. Former Starbucks chief executive Donald, whom Schultz replaced with himself in January 2008, has been under the radar for almost two years (roaming, rowing, speaking, teaching, and serving on boards), but he just accepted a job as CEO of Haggen, a food and drugstore chain based in Washington state. (Haggen’s website claims that it was the first grocer to have an in-store Starbucks Coffee shop, in 1989.) Donald’s earlier career was in grocery–senior posts at Safeway (SWY), Wal-Mart (WMT), and Pathmark–so he’s going back to his roots.–Patricia Sellers

by Jessica Shambora

Photo courtesy of Avon

Some say patience is a virtue. Others say that if you want something, you have to go for it. This is the tactic Avon (AVP) president Liz Smith is taking, as the company announced today that she will step down from her post on October 30, to pursue a CEO job elsewhere. Smith, No. 29 on Fortune’s Most Powerful Women list, will not be replaced, and the global business units she oversaw will now report to Avon CEO Andrea Jung, No. 5 on the list.

Smith won’t reveal who she might be talking to about the top job. But don’t be surprised if it’s a company ripe for overhaul. There are plenty of outfits that could use the help and Smith is known for seeking challenges. “It’s really always been in my DNA,” she told Fortune on Thursday, following the news of her plans to leave Avon.

Prior to her five years at the cosmetics company, she spent 14 years at Kraft (KFT). In 1996 she left a lucrative position running the Jell-O brand to transfer to a small U.S. import business related to a new European acquisition. Thanks in large part to Smith, the funny little mints called Altoids are now a household brand name.

“What has guided my career is that it’s about never settling for being less than inspired. What I’m looking for is to find an organization that I can bring a transformation to. I’m not a big believer in checklists and molds,” Smith said.

Many expected her to remain in the number two job until Jung retired. But Smith, 46, seems to have realized she would be in for a long wait. She may also be following the model set by Jung, who became CEO of Avon a decade ago at age 41.

“I’m 51, not 61, as it relates to my time horizon,” Jung told Fortune, about her commitment to staying at Avon for a while. “It’s bittersweet. It’s difficult to lose someone of Liz’s caliber, and these five years have been incredible.”

With Smith as her deputy, Jung has led a successful turnaround effort at Avon. The company hit over $10 billion in sales last year, and the stock, at $32, has more than doubled since its March low.

“Liz has brought extraordinary change to company as it relates to operating acumen, a new lens of how to look at the business, and how to drive growth and profitability,” Jung says.  “Both of us have groomed the transformation. We couldn’t have done it without her.”

Meanwhile, “extraordinarily visionary” is how Smith describes Jung. “You need business acumen, and you also need that something that’s about inspiring and bring out the best in people.”

Smith was among six women Fortune profiled in a 2007 piece, “One step away,” about rising stars on track to become Fortune 500 CEOs. Only Schering-Plough’s (SGP) Carrie Cox remains in her same job (and not for long as Merck’s (MRK) acquisition of Schering is expected to close by year-end). For more on the other women in the story, click here.

Smith hasn’t said she’s set on becoming the Fortune 500’s 16th female CEO. But Jung is convinced she can handle the job.

“I feel proud that I’ve been a part of helping Liz get to this next stage in her career, and I look forward to seeing her on the list of female Fortune 500 CEOs,” Jung says.

by Jessica Shambora

The 2009 Fortune Most Powerful Women in Business list is out today. You can find the 50 women, ranked in order, here.

Topping our charts: Pepsico (PEP) chairman and CEO Indra Nooyi. She’s been No. 1 in our rankings every year since 2006, when she ascended to the top job.

Last week, Nooyi sat down with Pattie and talked about leading a $43 billion global corporation in the “age of thrift,” as she calls this challenging era:

by Jessica Shambora

We’re toiling away on this year’s Fortune Most Powerful Women in Business list, due out September 10. Anything can happen up to the minute we go to press, and this news today caused us to shuffle those yet-to be-unveiled rankings: Procter & Gamble’s (PG) Melanie Healey is moving up to head the company’s enormous North American business, effective October 1.

No. 37 on last year’s MPWomen list, Healey currently heads global feminine & health care, a $9 billion business that includes Tampax, Vicks and Prilosec OTC. Her new purview brings in 40% of P&G’s total revenue. That’s $32 billion in sales.

Actually, Healey, 48, was destined to be a global operator. She was born in Rio de Janeiro to a British father and a Chilean mother. She went to college in the U.S.–graduating from the University of Richmond–but began her career back in Brazil with  S.C. Johnson and then Johnson & Johnson (JNJ). She joined P&G in 1990. Over the next 11 years until she got worldwide responsibilities, she helped build the company in Brazil, Mexico and Venezuela.

Healey’s promotion follows a raft of management changes at the consumer-goods giant. In March, Susan Arnold, president of global business units and No.7 on Fortune’s 2008 Most Powerful Women list, announced she was leaving. She was a contender to succeed CEO A.G. Lafley. Soon after came the news that COO Robert McDonald would replace Lafley. That transition happened in July.

Healey’s promotion, says P&G spokesman Paul Fox, is simply part of the company’s leadership development program. (She’s swapping jobs with Steven Bishop, who held the top North America post and will now run global feminine care.) Clearly, though, Healey’s new job sets her up to be part of the next generation of P&G leadership.

Whatever the future holds for her, Healey has a claim to fame that’s practically unmatched. Last year at a late-night bridge tournament at the  Fortune Most Powerful Women Summit, she beat Warren Buffett.

by Jessica Shambora

If 2009 has a buzz word, it’s “transparency.”

The consensus is that we got into this mess because a lot of people didn’t know what they were signing up for: adjustable rate mortgages, arcane investment vehicles, credit cards with hidden fees. People didn’t know because the products were too complicated to understand. Or they weren’t transparent. Or both.

We’ve written about this here on Postcards: Sallie Krawcheck, ex-Citigroup (C) and now the boss of Bank of America’s (BAC) global wealth and investment management arm, rails against this racket of making financial products too complicated. (“If you can make them complex enough, then it’s difficult to copy them,” she says, explaining big business’s motivation). She calls for greater simplicity and transparency to level the playing field for consumers and investors.

The Internet can help level the playing field too. Last week, I met with the Peter Pham, the CEO of BillShrink.com, a Redwood City, Calif.-based start-up that aims to bring transparency to all your hard-to-figure-out bills. Research shows that 80% of people overpay for credit-card and cell-phone services. BillShrink claims to have found savings of $225 million for the site’s 650,000 U.S. visitors in July.

Pham, who was an early employee and head of biz dev at Photobucket, a photo sharing site that News Corp. (NWSA) acquired in 2007, explains the appeal: “The idea is that you don’t have to ask yourself when you get your bill, ‘Am I getting ripped off?’”

Compare mobile phone plans at BillShrink.com

BillShrink, which raised $8 million from Bessemer Venture Partners and Trinity Ventures, started chasing the problem last year, focusing first on cell phone bills. You might have seen T-Mobile (DT) spokeswoman Catherine Zeta-Jones on TV, offering wireless customers “mobile makeovers.” Those makeovers come courtesy of BillShrink.

Using algorithms that monitor more than 10 million wireless plan combinations, BillShrink analyzes your phone bill to tell you which plan and phone give you the best value. BillShrink provides the service to you for free. The company gets a commission for its referrals–which, CEO Pham vows, are unbiased.

If you try BillShrink, you’ll get all kinds of data about your cell-phone behavior. For example, I learned that 72% of my minutes are spent calling the same five numbers. (You lucky people know who you are.) I also learned that I talk most often at 8pm (when I’m walking home from the subway after work).

After it offers this analysis, BillShrink gives you a list of cell-phone plans and shows you how much you’ll save by switching, taking into account the cost of breaking your contract with your current carrier. It turned out that based on my habits, T-Mobile does have the best plan for me. But as soon as I used the filters to tell BillShrink that I have an iPhone and am therefore married to AT&T (T), I got word that I was already on the best plan.

Eager to tap new markets, Pham has expanded BillShrink into tracking more than 200 credit cards, to make sure you’re not getting taken advantage of there. The BillShrink site has a “Credit Card Bill of Rights” that reflects new credit card legislation (some went into effect last week) and tells you if your cards are complying.

A “gas station” comparison tool is in beta. Next up: Savings & CDs. BillShrink won’t stop trying to help you until you understand exactly what you’re signing up for. Making the right choices from there is all up to you.

Home Depot (HD) hammered it home this morning–earnings beat expectations, and the stock is up 3%, to just under $27. Nice surprise after Lowe’s (LOW) disappointed yesterday. The No. 2 home-improvement retailer reported a 19% profit dip in its second quarter and, even more worrisome to investors, a 9.5% decline in same-store sales.

So what is Home Depot, the market leader, doing right? The new Fortune, hitting newsstands this week, delivers some intelligence on that. My colleague Geoff Colvin did a comprehensive interview with Home Depot CFO Carol Tome, who has seen it all. I remember when Tome joined Home Depot from Riverwood International Corp., a packaging and paper products company, 14 years ago. (I was a student of Home Depot back then.) We’ve followed Tome via our Most Powerful Women tracking and watched her weather the tumult as the mega-retailer has gone through four CEOs. Tome has worked for Bernice Marcus, Arthur Blank, Bob Nardelli, and Frank Blake.

Now Blake is Home Depot’s chief, and Tome has an expanding purview. (She’s also on the UPS (UPS) board, where she chairs the audit committee, and last year she joined the board of the Federal Reserve Bank of Atlanta, where she’s deputy chair.) Blake and Tome and their team are doing a lot of smart things. Since you probably don’t yet have your new Fortune in hand and since the Tome interview won’t be on Fortune.com and CNNMoney.com until Thursday, here’s a preview of what the savvy survivor says about “Renovating Home Depot”:

Recognize what you’re good at. “We have a three-legged strategy, and you will recognize this from Jim Collins’ book Good to Great. What are we passionate about? We are passionate about our customers. What are we the best at? Product authority. And what drives our economic engine? Productivity and efficiency. It is no longer driven by square-footage growth. We’re still going to open stores–we’re opening 13 stores this year. But it’s not about that any longer. It’s about how do we get more sales per square foot in the existing stores.”

Rethink your people strategy. “We introduced something we call power hours inside our stores. In the hours when traffic is heaviest, we stop all activity that is not customer-facing–pack-down activities, say–and spend 100% of our time taking care of customers…Even if you’re in the receiving area, if you’re in the vault, you come out on the floor.”

Remember that  the devil is in the details. “The professional contractor is a very important customers to us–3% of our transactions and about 30% of our business. We serve coffee at the pro desk. By changing the brand of coffee–not stopping the coffee, because coffee is important–but by changing the brand, we will save our company $500,000. It doesn’t take too many $500,000 decisions to make a penny per share.”

P.S. Credit Suisse (CS) analyst Gary Balter today reaffirmed his bullish view and raised his estimates on Home Depot, noting that HD’s U.S. quarterly same-store sales, while down 8.5% company-wide and down 6.9% in the U.S., beat Lowe’s for the first time in memory. Guess that cheap coffee isn’t turning off too many Home Depot customers.

“Starve yourself. Don’t take the money. Do it yourself. I recommend a diet of ramen noodles and very little sleep. If you don’t love your business, someone else will love it more than you, and do it better and be more creative.”

–Robert Stephens, Geek Squad founder and Chief Inspector, on his advice for aspiring entrepreneurs in the Wall Street Journal. In 1994, Stephens dropped out of school, and with $200, he turned his side job fixing PCs into the Geek Squad–sending employees in nerdy attire to rescue tech-addled customers. Fast forward eight years: Geek Squad was acquired by Best Buy (BBY) for $3 million. Now there are 20,000 employees in 1,038 Best Buy stores, plus seven stand-alone Geek Squad storefronts. Says Stephens, “I have an irrational love of technology. I don’t care how much I get paid.” –Jessica Shambora

Tuesday’s Guest Post by Starbucks barista Sun Min Kimes jolted Postcards readers like a pot of extra bold Joe. We got over 50 comments–the most comments, as well as the most traffic, of any Guest Post we’ve run except for “The Great Depression, as I remember” by Walt Stoiber.

She struck a chord. As one reader, Oliver in Chicago, said, “Move this person to the Executive suite ASAP!”

Thank you for the comments. We welcome them, always.

And in this case, we’re hoping that Howard Schultz, the man who built Starbucks (SBUX) and is now the company’s chairman and CEO, read his passionate employee’s–or as says, partner’s–good advice.

For Schultz and all the other folks rooting for a Starbucks turnaround, here are a few highlight comments:

Tom in Denver wrote: “PLEASE, Howard, dedicate just one register in the morning for drip coffee. I have a simple order: ‘Grande House.’” Several Starbucks managers replied that this idea is good in theory but not in practice–and not a path to better profitability.

Jim in Florida suggested more promotions to compete with an ever-more aggressive McDonald’s (MCD): “SBUX could probably get more business if they offered some more promos. McD’s has been giving out coupons for free breakfast sandwiches with purchase of a latte ($3 in my area). It ends up being not a bad deal, considering the latte itself is kind of pricey IMO.”

John, a former Starbucks manager in Philadelphia, griped that corporate is more “focused on communicating profit than they are communicating the side of Starbucks that matters.” He noted that “Howard Schultz went on a training rampage about 2 years ago.” But training has slipped, and “a store manager faced with mandatory spending cuts will likely cut training for a Shift Supervisor or Barista and put them directly on the floor.”

Kevin, a Starbucks store manager in Pittsburgh, agreed thay more training is needed, adding, “I have parters ready to attend the Starbucks Experience class but can’t because no one is available to teach it. What happened to Situational Leadership class, or Supervisory Skills class?”

And Donna in Christiansburg, Va. offers advice that I wholeheartedly agree with: “Please turn down the music. Sometimes it is so loud I can’t concentrate on what I’m reading or hear my partner’s conversation.”

Starbucks (SBUX) is one of our favorite topics on Postcards. We’re in the stores everyday. We vigilantly watch CEO Howard Schultz’s efforts to slash costs, revive the brand, treat employees respectfully, satisfy investors, and fight incursions by very aggressive McDonald’s (MCD) and Dunkin’ Donuts. Today’s Wall Street Journal has an interesting story about Starbucks’ latest efficiency efforts–which could compromise the brand “romance,” which Schultz has long said distinguishes Starbucks, and employee (or “partner”) morale. Sun Min Kimes, a behind-the-counter barista at a Starbucks in Ashburn, Virginia felt strongly enough about the struggles to write this Guest Post. We hope Howard Schultz reads it.

by Sun Min Kimes

I started working for Starbucks a couple of years ago, after I returned to the U.S. from Seoul.  I first moved to America 30 years ago, but my husband and I went back to my native country, South Korea, when my daughter–who is a writer-reporter at Fortune–left for college. Upon our return to Ashburn, Virginia, I wanted to get a part-time job, so I drove to the Starbucks near our house and filled out an application.

I was hired after my second interview. When I started the job, I was very nervous about the long lines of customers and complicated terms for everything. Although I came here from Korea many years ago, English is my second language. Sometimes, customers were frustrated if I took too long or made mistakes.  So I made my own homemade notebook of Starbucks recipes and studied it every night.

Eventually, I became comfortable at work. I began to see the same customers every day, and we became friends, even talking about our lives. I met a 45-year-old woman whose teenage son loves sports (like my children did), and a Filipino girl who thought she had to leave the states but received permission to stay.  There’s a gentleman whose wife is terminally ill–he comes in, sits down, and reads a book most days. I think being here comforts him.

Over time, I grew more interested in the company. In fact, many of us “partners” feel this way. We track what is happening through various blogs. We know the business has been going through tough times, so I was happy to hear that profits recently improved. However, I wish we could increase earnings without cutting costs.

It is very difficult sometimes when there are only two people on the floor doing everything. I think that Howard Schultz has made a lot of smart decisions, but I have some suggestions for him.

Howard, I think you have done a good job of being transparent, but it would be wonderful if you communicated more with the workers. I would like to get an internal newsletter, with information about what successful locations are doing, new products, and the company’s strategy. Additionally, customer service would improve if we received reeducation. I know many of us want the opportunity for advanced training.

I’ve heard that, in Seattle, you’re creating new “stealth coffee shops,” called 15th Avenue stores, without the Starbucks brand. Customers will see through this. Instead, why not empower–and incentivize–managers to appeal to their communities by sourcing food, music, and artwork from locals while sustaining our brand?

A few more suggestions: During the morning hours at busy stores, I think many of our customers would appreciate it if a single register were designated for drip coffee. And regarding new products: I just don’t think the company is successful in creating excitement. We’re told to provide samples, but I rarely see them in stores.

I know that Starbucks has been successful with social media, but I think you should reconsider your resistance to nationwide television advertising.  We need to work harder to create buzz.

Regarding our retail items: I haven’t seen sales data, but I question the strategy. The various mugs, stuffed animals, tumblers, etc. look colorful and add to the store’s ambiance, but they sit on our shelves forever.  We always end up marking them down. I think we should offer fewer items, and choose them more carefully.

Finally, you should develop a new plan to reward frequent visitors. Recognition is important to them.

These are pretty small ideas, and they are coming from someone who hasn’t been at Starbucks for that long. But even in my short time, I’ve become invested in the company. I love how it fosters diversity by bringing together people from different countries and walks of life.  After I left my native country for the second time, Starbucks gave me a community. I hope you can keep it thriving.

by Patricia Sellers

Reed Hastings, the founder and chief executive of Netflix (NFLX), came by our offices on Monday. He’s one of the more down-to-earth CEOs you’ll ever meet.

He’s a Bowdoin grad like my boss, Fortune managing editor Andy Serwer. Post-college, Hastings joined the Peace Corps and taught school in Swaziland. Then he played Silicon Valley start-up guy for a stretch and eventually struck gold with his movies-by-mail idea, aimed at easing the hassle of in-store drop-offs and pesky late fees.

He didn’t name his start-up “Movies by Mail” or anything like that to limit the company’s evolution — which helps explain why Netflix continues to grow briskly, even in this brutal environment. The guy had vision when he launched Netflix in 1999. The company went public in 2002 at $7.50 a share, and today the stock, at $45, isn’t far below its all-time high.

Netflix is due to announce quarterly earnings tomorrow after the closing bell, so we’ll see how well it’s riding the the digital revolution, as well as the bad economy. But the ride seems to be pretty smooth. Referring to subscribers, which today total more than 10 million, Hastings, 48, told us, “We were growing 25% when the economy was growing. We’re growing 25% now.”

Among the things that he and his team are doing right, the smartest may be choosing what they don’t want to be. As Hastings told me on Monday, he learned from Jim Collins, the renowned management guru, that it’s just as important to decide what not to do in business as it is to determine what to do.

Especially today, when change is happening so fast and unpredictably,  it’s critical to prioritize. For Hastings, this has meant not competing with Blockbuster at retail. That was smart, given that video-rental stores industry-wide are down to some 10,000, from 20,000 at the peak. “In five or 10 years, video stores will be gone,” Hastings predicts.

A more recent choice he made — “really hard,” he admitted — was deciding not to enter the ad-supported web-video fray against Hulu, YouTube (GOOG), and CBS.com (CBS). “Commercial-free subscription is where we can compete. It’s our best shot,” Hastings says. Netflix offers unlimited DVDs by mail and unlimited instant streaming to computers and TVs for a flat $8.95 a month.

Hastings decided not to compete with pay-per-view purveyors like HBO (TWX)  and cable companies. And recently, he opted not to go head to head against Redbox. That’s the fast-growing start-up that places kiosks–more than 15,000 to date — in McDonald’s (MCD), supermarkets and other heavy-traffic locales. Videos cost $1 a day.

Despite inordinate disruption and confusion around distribution — or maybe because of it — Hastings is clear about his game. An engineer by training and a Microsoft (MSFT) board member, he’s determined  to make video-watching more personal and satisfying — via advancing technology, of course.

Hastings looks forward to the day, a decade or less from now, when an Internet browser will be built into every television, he says. We’ll be calling up movies and channels and websites with a click of a button or just a spoken word: “Wizard of Oz.” Or “ESPN.” Or “Netflix.”

Take a look at my conversation with Hastings for more about how he sees the future…

by Patricia Sellers

David Ogilvy, arguably the most influential advertising man in history, died 10 years ago today.

Courtesy: Ogilvy & Mather

Measured by his creativity, Ogilvy was most famous for the man in the Hathaway shirt, his pitch for Rolls Royce (“At 60 mph, the loudest noise in this Rolls-Royce comes from the electric clock”), and his clever insight to market Dove soap as 1/4 cleansing cream.

But beyond the ads, this elegant and eclectic Brit pioneered consumer research, direct marketing–and built an industry-leading juggernaut, Ogilvy & Mather. Now owned by WPP Group (WPPGY), Ogilvy is the longtime brand steward for Fortune 500 companies such as Ford (F), IBM (IBM) and American Express (AXP).

I had the privilege of getting to know David Ogilvy in the ’80s and ’90s, when I was growing up at Fortune and writing about big-brand consumer-goods companies. We were at the Fortune 500 Forum in Charleston, S.C. in 1991 when I asked Ogilvy, then a vigorous 80-year-old, to share his advice for building and running a business.

Why I asked him, I can’t recall–maybe because he loved sharing his principles of management. In any case, I’m glad I did. I’ve kept his pencil-scrawled note in my desk drawer ever since. What better day than today to share it with you. So, here is David Ogilvy’s best business advice:

1. Remember that Abraham Lincoln spoke of life, liberty and the pursuit of happiness. He left out the pursuit of profit.

2. Remember the old Scottish motto: “Be happy while you’re living, for you are a long time dead.”

3. If you have to reduce your company’s payroll, don’t fire your people until you have cut your compensation and the compensation of your big-shots.

4. Define your corporate culture and your principles of management in writing. Don’t delegate this to a committee. Search all the parks in all your cities. You’ll find no statues of committees.

5. Stop cutting the quality of your products in search of bigger margins. The consumer always notices — and punishes you.

6. Never spend money on advertising which does not sell.

7. Bear in mind that the consumer is not a moron. She is your wife. Do not insult her intelligence.

David Ogilvy

Charleston

November 15, 1991

Do you have a particular article of clothing that’s great for carrying tech gear?

Let us know.

My friend Kathleen Waterbury Reilly, who lives in Pennsylvania, swears by Wal-Mart’s cargo shorts. There are a few different types on walmart.com, but Faded Glory Women’s Plus Cinched Cargo Bermuda Shorts, with six pockets, are the ones she loves. She has three pairs—at $14 a pop!

She uses the side leg pocket for her BlackBerry (RIMM), and by doing that, she says, “I’m having far fewer accidental dials than when I throw it in my purse. Also, it’s much easier to find and to hear.”

Trust me, Kathleen doesn’t need to scrimp on her apparel. (Her 15-year-old daughter, Tricia, who is a fan of TLC’s What Not to Wear as well as the family’s fashion police, wishes her mom would shop elsewhere.) But don’t you get the sense that just about everybody who’s upscale and sophisticated, like Kathleen, is shopping at Wal-Mart (WMT) these days?

Alas, the six-pocket Faded Glory cargo shorts are sold out on walmart.com. (Guess they’re popular beyond the Reilly household.)

Tell us, please: What’s your favorite tech-friendly clothing or accessory? If it’s a bargain, all the better!

The ideal career path may be: reaching the top of the corporate world, then taking time off for family when your kids need you most, and then jumping back into a primo job at a top-tier global company.

Impossible in this dreadful economy? Here’s someone who’s done it. Remember Jeanne Jackson? At Gap (GPS) in the 90s, she built Banana Republic and then went to help Wal-Mart (WMT) take Walmart.com from start-up stage. But after leaving Wal-Mart seven years ago, Jackson was out of the big game, except for board gigs at McDonald’s (MCD), Nordstrom (JWN), and Nike (NKE).

She’s back. Actually, I follow these Most Powerful Women (and Jackson was one, on our annual list a decade ago), but the announcement four months ago that she landed at Nike–as President, Direct to Consumer, reporting to the CEO–was so low-key that I’d missed it. A few days ago, I spotted Jackson’s name and Nike title on the participant list for our upcoming Fortune Most Powerful Women Summit. I popped her an email. We talked yesterday.

“I made a commitment to my family,” Jackson, 57, told me, explaining why she had dropped out for so long. Since 2001, when she joined the Nike board, Jackson actually had talked on and off with chairman Phil Knight and CEO Mark Parker about joining the company. But not until this year, when her son graduated from high school and her daughter accepted an internship in London, at Burberry, did she decide to jump.

She didn’t think the jump would be to Nike first thing. “I thought I’d do something related to private equity,” says Jackson, who has been quietly running her own private equity/consulting business, MSP Capital, out of Newport Beach, California for the past several years. She expected one of the companies she backed “would speak to me.” But nothing did. (Along with “some spectacular failures,” she says, she scored a couple of hits, including Pure Digital, which sells the Flip camera and recently was acquired by Cisco.)

As the global economy tanked, she felt ever more drawn to the thing that she has focused on throughout her career: strong brands. Says Jackson, who was at Disney (DIS) and Victoria’s Secret early on: “In this economy, consumers default to strong brands.” Now, in this new role that Nike CEO Parker created for her, she oversees the company’s global retail holdings. That includes some 3,500 franchised Nike stores, more than 600 wholly-owned Nike and Cole Haan stores, and five e-commerce sites. Some $3 billion in revenues annually travels through these “direct to consumer” channels.

And despite the global meltdown, Nike is performing well. Revenues reached $19.2 billion in the year ended May 31. Profits fell 21% after five years of 20%+ annual growth, but investors have stayed with the stock: It’s up nearly 40% in five years, while the S&P has dropped 20%. The world’s largest athletic shoe and apparel marketer, Nike has smartly reduced spending and layers of management, while selectively adding key talent like Jackson.

Of course, she’s contending with the retail slowdown–Nike too has cut new-store expansion. But in some ways, Jackson is returning to the sort of thing she did inside Gap and Wal-Mart: playing entrepreneur inside a corporation. Last week, she opened the first Hurley/Converse/Nike store, in Orange County, California. The Hurley brand is for surfers and skateboarders and other cool kids. Converse, she says, has particularly broad appeal–from high school kids to musicians to “my mother-in-law, who is 87 years old and wears Converse.”

The family dynamic–usually a complication when executives, especially women, return to big jobs–is alright for Jackson. At least until her son heads off to SMU this fall, she’s commuting from California to Oregon, where Nike is based. Husband Doug, a retired airline pilot, is flexible and always has been. “I could take any job and he would just relocate,” Jackson says. (He has his own passion: cars. He owns the Batmobile–one of four built in 1966 for Batman on TV.)

Jackson, meanwhile, has simplified her business extracurriculars. She quit the boards of Nordstrom and Harrah’s Entertainment, as well as Nike. The one board she’s staying on: McDonald’s. After all, you can never get enough lessons in smart retailing.

Billy Mays was here at Fortune in early April, after a story about the pitchman appeared in the magazine. (The writer, Brian O’Keefe, penned this tribute to Mays today.) I sat in on the session and took away a few nuggets of wisdom from the guy who earned his fame pitching OxiClean stain remover (“Powered by the air you breathe!”) and ImpactGel in-soles (“It’s like walking on a cloud of air!”).

1. “Know the questions in your customer’s mind.” Answer them as she is thinking of them.
2. “You’ve gotta work with the heckler in your crowd.” Use him to draw others in.
3. “People will step toward you if you step back.” Again, pull the crowd closer to keep them engaged.
4. “Pull out your own wallet.” This will inspire them to do the same. If you nod your head, they will too.
5. “Most of the good advertising is annoying.” When it comes to you, Billy, we prefer “captivating.”