From the pinnacles of power by Fortune editor at large Patricia Sellers
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November 24, 2009, 6:07 pm

Power Point: Heed the ham!

“All of a sudden this ham… hit me full long in the face and ’bout knocked me cuckoo.”

–Celebrity cook and Food Network star Paula Deen, who was hit in the face by a ham today while volunteering at an Atlanta food drive. Deen, who was helping to unload 25,000 pounds of meat donated to a local food bank, was the honored guest at a recent “Fortune Most Powerful Women Evening With…” dinner in Atlanta, where she told the guests, “Ladies, I have got a revelation: Eat the cookies. And chase them with bacon.” (Click here for Pattie’s post about Deen and the career wisdom she served up at the event.) –Jessica Shambora

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November 3, 2009, 3:44 pm

Avon’s ex-president’s odd leap to CEO

by Patricia Sellers

2005_smith_liz new small

Photo courtesy of Avon

Liz Smith, who was on track to succeed Andrea Jung as CEO of Avon Products (AVP), is moving to a new company and a new industry. Again.

The onetime star exec at Kraft (KFT), who made an unlikely leap from food to cosmetics in 2004, is the newly named chief executive of OSI, a chain of casual-dining eateries.

“What?!!” is a question that Smith admits she’s been asked often throughout her career. She says she follows her own guideline: “Be open to opportunity.”

There’s plenty of opportunity–and risk–at OSI, which you may not have heard of but is a giant in the casual-dining category. With 2008 revenues of $4 billion, OSI operates chains such as Outback Steakhouse, Carrabba’s Italian Grill, Bonefish Grill, Roy’s, and Fleming’s Prime Steakhouse and Wine Bar. Good brands, as restaurant brands go–and as Bain Capital and Catterton Partners thought when they acquired the company for $3.2 billion in 2007. But the global recession brutalized the business, which operates across the U.S. and in 20 other countries. OSI lost $739.4 million last year, and it’s been suffering serious declines in same-store sales.

Which may be ideal for Smith, since she adores companies that are ripe for overhaul. “It’s really always been in my DNA,” she told my colleague Jessica Shambora in September, on the day she announced her departure from Avon.

Smith’s exit from Avon shocked many people, since she was crucial to the cosmetic giant’s turnaround, well-liked across the company, and widely viewed as Jung’s eventual successor. But “eventual” was looking to be too long from now. While Smith, who is No. 29 on Fortune’s Most Powerful Women in Business list, is just 46 years old and has plenty of runway ahead, she lost patience. That’s understandable since Jung, who was named Avon’s CEO at age 41 a decade ago, has no plans to retire.

So now, Smith–who began her career at Morgan Stanley (MS) and then, as a Stanford MBA student, “wanted to start the next Microsoft or H-P”–is off in yet another new direction. Geographically, this time it is Manhattan to Tampa, Florida, where OSI is based. Smith plans to commute initially and then relocate with her husband and two young sons.

And though retail isn’t entirely new to Smith–she’s on the board of Staples (SPLS)–she’ll be testing herself against her own measure of leadership. “Nothing is more important than a nimble, agile leader who is comfortable with ambiguity,” she told me a few months ago.

“We have to be comfortable figuring it out as we go along,” Smith added. Definitely, she’s living her philosophy.

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October 12, 2009, 7:01 pm

Power Point: Find out what you are good at

“Ultimately if you can put a wall up, if you can paint, if you can work with other people and, most important, if you find out what you are good at, that’s the key.”

– British chef Jamie Oliver, in the New York Times Magazine, challenging the myth that a traditional education is the only way to be successful.  Today Oliver’s hyperactivity is his trademark but as a child he was branded “special needs” and pulled from regular classes to learn to read and write amidst classmates’ taunting. “We’re not supposed to be all academic. What is education? A bunch of stuff that people think we should know.”

Oliver, who was working in the kitchen of his father’s pub by age 13, recommends starting early. “Kids can do detailed, technical things, and they can do them well. Have you seen them on skateboards and surfing? It doesn’t have to be a BMX, it can be a pot and a pan and a knife.” Time to put your young ones to work in the kitchen! –Jessica Shambora

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October 2, 2009, 1:23 pm

Starbucks Via: What’s the secret?

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?PATTIE signature

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

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August 6, 2009, 3:55 pm

Advice for Starbucks, from readers

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.”PATTIE signature

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August 4, 2009, 1:11 pm

Guest Post: Advice to Starbucks CEO Howard Schultz

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.

sunminsbuxby 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.

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June 24, 2009, 6:15 pm

Power Point: Don’t go too low

“I believe, this is my own marketing philosophy, that you degrade your brand value if you’re saying, this is not worth but half. At some point people go, ‘I guess it’s not really worth what they charge.’ ”

– Rick Hendrie, senior vice president for marketing at Uno Chicago Grill, in Wednesday’s New York Times. Uno Chicago Grill, currently offering a $9.99 pizza meal deal, is embroiled in a discount showdown with competing chain restaurants like Ruby Tuesday (RT) and DineEquity’s (DIN) Applebee’s. But even if the chains, which grew rapidly in recent years, can ride out this economic storm, they may find they’ve done irreparable damage to their pricing power. –Jessica Shambora

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April 21, 2009, 6:20 pm

Power Point: Be a good neighbor

“Business is essentially like a neighbor in your community, only it happens to be a very wealthy neighbor.”

–Jerry Greenfield, founder of Ben & Jerry’s ice cream with Ben Cohen. Unilever bought their business and has preserved the founders’ socially responsible approach. And today is just one example of how Ben & Jerry’s continues to be a good neighbor: It’s Free Cone day! I recommend Chocolate Macadamia. It’s made with sustainably-sourced macadamias & Fair Trade-certified cocoa & vanilla. And it’s delicious.–Jessica Shambora

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March 20, 2009, 3:55 pm

It’s time to reinvent

Tech companies are rethinking their identities. IBM may buy Sun Microsystems. Cisco (CSCO) is moving into the server market, and also mightily into the consumer space. The latest move by Cisco CEO John Chambers–whose family reportedly owns eight Flip cameras–is a buyout of Pure Digital Technologies, which sells those ultra-simple videocameras. (I love mine.)

Powerful people are busy rethinking their identities too. My  last two stories in Fortune are about ex-CEOs reinventing themselves. One is on the new cover story: Former eBay (EBAY) CEO Meg Whitman is putting her all–including $50 million in personal funds, she ventures to guess–into the race to be California’s next governor. (The Golden State, the sickest state in the nation by many measures, needs reinvention too.)

Before Whitman, I profiled former Viacom (VIAB) CEO Tom Freston, whom we call “The Most Wanted Man on the Planet.” We’re being a little facetious, but since Freston got ousted by the media giant’s octogenarian chairman, Sumner Redstone, in 2006, he’s been in high demand and having the time of his life. Freston is helping Oprah Winfrey start her new cable network, OWN. The first lady of TV is busy recreating herself too.

Bad times are good times to redefine yourself. I recently had dinner with Jim Donald, the former CEO of Starbuck (SBUX), who got fired by chairman Howard Schultz early last year. Schultz retook the reins as CEO and is struggling. (Who would want his job?!) Donald is enjoying his unemployed life. He’s on the speaking circuit, teaching a class at the University of Washington, serving on boards, and is being wooed by Bill Ackman, the activist hedge fund investor, to help him fight for seats on the Target (TGT) board. (That’s a messy matter that Donald might best avoid–my opinion, for what it’s worth.) Meanwhile, Donald has gotten in serious physical shape. He recently won his age group, 50-54, in the Northwest Indoor Rowing Championship. Fame is fleeting, though. The ex-CEO of Starbucks just turned 55.

Others too are deciding to hang it up at that age. Two weeks ago, on the day after she turned 55, Procter & Gamble (PG) president Susan Arnold quit her job. She essentially took herself out of the running to succeed CEO A.G. Lafley (Bob McDonald has long had the edge). Judging from the chat I had with Arnold on that day P&G announced her move, I think she’ll be out of the corporate game for a while. The boss who was No. 7 on Fortune’s 2008 Most Powerful Women list wants to regroup. (See “Why P&G’s president quit.”)

Reinvention is clearly the trend. Last weekend in Arizona, when I was mini-vacationing to escape the New York stress, my hiking guide was a former lawyer who quit the rat race to lead mountain treks. This guy said he’s never been happier than he is now. Two nights ago at a Most Powerful Women dinner, I heard about one lawyer who just became an acupuncurist and another who turned herself into an entrepreneur. She’s selling her inventions on HSN.

This weekend, think about your life. Don’t leave what you love. But figure out who you are and what you really want to do. There’s less shame than ever in losing your job–in failing. Life is a trampoline. Use it to rebound. - Pattie Sellers

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March 3, 2009, 2:31 pm

Betting on Starbucks’ lofty prices

My Fortune colleague Geoff Colvin writes in our March 2 issue that a few companies–DuPont (DD) and Colgate-Palmolive (CL) and McDonald’s (MCD), to name three–are working overtime to preserve their brand equity in this downturn. Instead of discounting, they are, in some cases, actually raising prices.

Another company loathe to cut prices: Starbucks (SBUX). As I’ve noted on Postcards, CEO Howard Schultz told me last year that the smartest decision he made during this recession was refusing to discount. Investors crying over the stock’s swoon (down 50% this past year) may question his wisdom. But hand it to Howard for floating new ventures–new value-priced breakfast combos, instant coffee, a Gold loyalty card, partnerships with Costco (COST) and Bono’s Product RED–in an effort to shore his sales and once-mighty brand.

Given Starbucks’ struggles to preserve its premium image, I have to share with you an amusing story from my neighbor, Lauren Jacobs, who lives next door to me in my Manhattan apartment building.

Lauren is a teacher. She teaches 11th grade in a public school in Spanish Harlem. Last month, she kindly let me borrow her Hewlett-Packard (HPQ) Pavilion PC to set up my new Verizon wireless service in my apartment. I gave Lauren a $40 Starbucks card to thank her.

A lover (read: addict) of coffee and an intermittent Starbucks fan, Lauren decided to have a contest with her dad in New Jersey to see who could spend more money at one time on ONE Starbucks beverage.

Well, he couldn’t even compete.

Lauren’s dad spent about $3 on some sort of cappuccino, neglecting to realize that Starbucks’ cold drinks are the ones that really suck the money out of you. Determined to wallop her dad in this coffee contest, Lauren walked downstairs to our Starbucks. (We live above a Starbucks. We could go in our pajamas, if we were so bold.) Despite the February freeze, she ordered a Venti Mocha Frappuccino with extra whipped cream. It cost $5.75.

Lauren immediately called her father to gloat. She confessed to him that she was terribly self-conscious carrying the drink around the corner and into the building. People in the elevator stared at her as if she were some sort of coffee glutton. “I didn’t know what ‘Venti’ meant,” she lied.

Four hours later, she called her dad back. She was still drinking that Venti Frap. “I felt nauseous and dizzy after I finished–yes, finished the drink. And I did not sleep well that night,” she recalls. The next day, she swears she had a Venti Mocha Frappuccino hangover. “I didn’t leave the house all day.”

Eventually she did venture out to meet some friends to see Slumdog Millionaire. But when they wanted to go for coffee afterwards…she politely declined.

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Pattie SellersPatricia Sellers has written some of Fortune's most talked-about cover stories, including "Can Meg Whitman Save California?", Melinda Gates ("The $100 Billion Woman"), "MySpace Cowboys," Martha Stewart ("I cannot be destroyed"), Ted Turner ("Gone with the Wind") and Oprah Winfrey ("Oprah Inc."). And she has broken ground with insightful pieces on career management issues such as ego ("Get Over Yourself!"), and "Charisma: Do You Need It? Can You Get It?" Pattie chairs the annual Fortune Most Powerful Women Summit, the preeminent gathering of women leaders in business, philanthropy, government, academia, and the arts. And she has helped oversee Fortune's "Most Powerful Women in Business" cover package since its launch in 1998. She started at Fortune in 1984, covering the big consumer brand companies.
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