CEO Daily: The Best in Business Reading
Speaking of more-than-meets-the-eye in a seemingly pedestrian occupation, this obituary of a McDonald’s franchisee in Uniontown, Pa. who invented the Big Mac is a lovely paean to good old American ingenuity and stick-to-itiveness. Jim Delligatti, who just died at age 98, created the megahit almost 50 years ago despite active opposition from the parent corporation. How did McDonald’s compensate Delligatti for an idea that made the company billions of dollars? It gave him a plaque.
Following The Money—Mystery Edition
Before media coverage was largely subsumed by the presidential election, one of the big business stories of 2016 was the publication of hacked documents from Mossack Fonseca, the Panamanian law firm that is apparently expert in shielding financial holdings for moguls, dictators, and many others, through webs of offshore entities. The challenge for journalists in telling such stories is comparable to the one facing the lawyers and investigators trying to untangle what’s going on: The complexity is overwhelming. And so when “revelations” appeared in myriad articles based on the Mossack Fonseca files, I dutifully trudged through a number of those reports, feeling it was my civic duty and that I really, really ought to read every word. Zzzzzz—pardon me, I dozed off just at the memory.
Now comes the New York Times magazine, which has solved the storytelling conundrum by delving deep into one multi-millionaire’s machinations to shield his assets from his soon-to-be-ex-wife as their divorce proceedings began. “How To Hide $400 Million” is a financial detective story and a reminder of something I was taught in journalism school: Often the best way to shed insight on a huge issue is to find a bite-sized way to capture it. The tale of a husband and wife at odds infuses emotion into the narrative and the mystery-style structure creates urgency. Along the way, you’ll learn a ton about how the shell-company game is played.
Why You Love Costco—And They Do, Too
I will admit that I tend to gravitate towards journalism, particularly in the business arena, that is critical and probing. But every now and again, I encounter a company that truly deserves to be celebrated. In this instance, it’s the quirky retailer Costco, and Neal Gabler’s “The Magic Inside the Warehouse” in Fortune goes a good way to explaining not only why customers love it so much—but why people love working there, and yes, the two are closely connected. The story is crammed with rich and fascinating detail about Costco’s culture and how, even in an age in which almost every retailer aims to emulate Amazon, it is Jeff Bezos’s company that copied Costco—by adopting its Amazon Prime subscription model—rather than vice-versa. As for Costco’s culture, the one paragraph below reveals a lot about its lack of arrogance. I wish there were more companies like it:
Just about every executive has grown up that way, including CEO Jelinek. “I know what it’s like to shag carts,” he says. “I know what it’s like to clean bathrooms. I can come in and tell you where you missed the tiles around the urinals. I know what it’s like to cull produce or to grind beef. So when you talk to people, it’s not somebody coming in off their white horse. They know you’ve been there and done that.” Longtime CFO Richard Galanti has a term for the company’s culture: “jerk-free.”
Why Did The EPA Change A Fracking Finding?
In the “substance over style” category, take a look at “EPA's late changes to fracking study downplayed risk of polluted drinking water,” by APM Reports, the print sibling of public radio’s Marketplace. This story is told essentially as a very extended newspaper article and its worthiness stems from the classic public-interest focus: If you want to understand how things happen in Washington (and why there are many forces as potent as the president's administration), this is a good article to read. The reporters can’t uncover exactly who did what at the crucial moment but they do identify a key change in an EPA report that appears to have suddenly weakened a major report on the environmental consequences of the fracking industry. Here’s the key passage:
The documents obtained by APM Reports and Marketplace show that on April 24, 2015, an executive summary was circulated that said "hydraulic fracturing activities have contaminated drinking water resources in a variety of documented cases. Despite these risks, the number of documented impacts is quite low." Nowhere did the draft state that there was no widespread, systemic impact on water. On May 4, EPA officials met with key advisers to Obama, officials from the U.S. Department of the Interior and the Department of Energy to make sure they were "clear on messaging," according to public documents. By May 12, the executive summary had changed to include the phrase: "We did not find evidence of widespread, systemic impacts."