Little Italy's Last Barber

At the turn of the 20th century, a growing tide of Italians, largely from the south, immigrated to the United States. Out of a population of 14 million southern Italians, an estimated five million left by the outbreak of World War I. Those who left Italy apprenticed stereotypically as tailors, bakers, masons and barbers.

A man named Sal came to the United States during the next immigration wave just before the second world war. He was born in Sicily and became a barber after settling in New York. Today, according to his own census, he is the very last working Italian barber in Manhattan's Little Italy.

A few months ago, needing a haircut, I reasoned that there had to be a good barber in Little Italy. After walking just a few blocks from my office, I happened on Sal's barber shop. When I arrived Sal was giving a haircut to an older gentleman as they conversed in Italian. When it was my turn to take the chair, Sal introduced himself and then explained that the gentleman before me was Arturo Di Modica, the noted sculpture of the 7,000 lb. Charging Bull on Wall Street. When I asked if he cut the hair of other celebrities, he said no because of the distraction of the paparazzi. He cut Robert DeNiro's hair once and that was all it took to establish the shop's rule.

Sal's Sicilian accent is still very thick and it takes all of my powers of concentration to keep track of the meaning and direction of our dialogue. While I struggle with his speaking, he has no difficulties at all with mine. I learned that his grandfather lived to be 105 and died of a heart attack after an argument with his 93 year old wife, who had complained about him coming home drunk! His 85 year old aunt just came over for a two week vacation and insisted on seeing all of the New York sights on foot, despite the January cold. Sal apparently has very good gene stock.

After my first haircut, Sal charged me $15 even though the sign in the shop indicated that the price of a gentleman's haircut was $20. The next time I visited the shop, I asked Sal for a restaurant recommendation -- someplace with great food off of the tourist grid. I figured who better to ask than the man who has cut hair at the same location for over 50 years. Two days later, I visited the restaurant and mentioned that Sal had sent me. Within minutes, Sal was at my table -- having walked over from his shop to say hello to the friend (me) having his lunch.

I now give Sal $20 for my haircut plus a $5 tip. But the money I give him doesn't last long in his pocket. After cutting my hair, Sal insists that I join him for a quick espresso and pastry at Ferraro's down the street. He refuses to allow me to pay.

If you are in New York and need a classic haircut, stop by Sal's Shop located on Grand Street just off of Mulberry. The shop is located directly opposite the Italian Food Center identified in the photograph above. He just might buy you an espresso as well. Fluency in Italian is not a requirement.

Pay the fine already!

Believe it or not, Exxon Mobil is still contesting the $2.5 billion punitive fine it was levied for the Valdez oil spill -- almost twenty years after the event! Exxon Mobil will argue in front of the Supreme Court today that under maritime law it owes nothing to the fisherman, residents and Native Alaskans harmed by the massive oil spill. Exxon states that it has already been punished enough by paying $3.4 billion in clean up costs. For more on the story see link

If you find this hard to believe, let me illustrate it with a hypothetical anecdote. Suppose you have a party in your home. One of your guests has a bit too much to drink and backs his car into your above ground heating oil tank, which is adjacent the garage. Luckily no one is hurt. Your neighbor witnesses the accident and immediately calls the local police. The municipal services unit of your town, in cooperation with the EPA, arrives on the scene the day after to clean up the oil -- which has seeped beyond your backyard and into a stream about 100 feet from your house. Two days later, the oil spill is cleaned up and you have a new oil tank installed by your heating oil company. It's hard to gauge the environmental impact of the accident and you hope for the best.

Your guest receives a six month license suspension and pays a $500 fine. A month later, you receive a summons to appear in court and after a brief hearing are ordered to pay the town $6,800 in clean up costs and a fine of $5,000. Since you earn about $80,000, the fines will sting but not bankrupt you. Your attorney successfully files a motion allowing you to pay for the clean up costs but appeal the fine. 20 years later, through appeals and legal maneuvers, you still haven't paid the fine. Most of your neighbors no longer speak to you out of principle.

This is exactly what Exxon Mobil has done. The numbers are proportionate. The company made $40 billion in profits last year. A $2.5 billion fine would sting but not bankrupt. Exxon Mobil doesn't seem to care what most people think of it.

Trix is good for you... really!

The brand manager of Trix is on the hot seat these days. Parent company, General Mills, is attempting to remake itself by revamping its product line to be healthier and more nutritious. It's one thing to promote the nutritional value of Cheerios, which is made of whole grains and has only a gram of sugar per serving. It's a lot harder for Trix with 13 grams of sugar -- sweeteners are its top ingredients after whole grain corn cereal.

Putting teeth into the company's wellness objectives seems like the right thing to do -- the thinking behind this compensation philosophy is that executives rarely take difficult steps to meet qualitative goals unless they have monetary incentives to do so. The flaw in this compensation philosophy, however, is that it may lead to incremental thinking. Why take big steps to transform a business or brand if it will put at risk the ability to also meet short-term financial metrics. If you are the brand manager of Trix, you won't make big changes to the brand to boost its nutritional value, if the result is that kids are less likely to grab the box for a second, heaping helping.

It's a different story if mothers stop buying Trix because of its high sugar content and the brand incurs a significant loss of market share or profit. Dramatic steps will be the order of the day. But this is more accurately described as a turnaround, not a strategic transformation. Strategic transformation -- ahead of market share or profit declines -- is driven by leadership, not bonus plans.

General Mills realizes this and is hedging its bets. In addition to motivating managers to make healthy changes to its current brands, the company is also making acquisitions to change the composition of the businesses. Next to Cheerios and Trix now sits Cascade, a leading brand of organic, high nutritional value cereals. The brand manager of Trix may fail but General Mills can still succeed in its mission by buying brands like Cascade. For more on the story, see the Wall Street Journal link

What is it about bread?

Exhibit II in the bread with a higher calling category is Ezekiel 4:9 by the Food for Life Baking Company link

The key proposition of Ezekial 4:9 is that it is 100% flourless. Made from "freshly sprouted, organically grown grains," this bread is inspired by the Holy Scripture verse: "Take also unto thee Wheat, and Barley, and beans, and lentils, and millet, and Spelt, and put them in one vessel, and make bread of it..."

According to Food for life, this bread is a miracle of nutrition -- a bread made completely from vegetable sources which matches the protein quality of animal products such as milk or eggs. Praise the lord!

Food for Life also makes Genesis 1:29. What Food for Life does not make is a bread named after Revelation 16:8,9 which speaks to the earth's destruction due to global warming. “And the fourth angel poured out his vial upon the sun; and power was given unto him to scorch men with fire. And men were scorched with great heat...”

Food for Life ships all of its products frozen from its bakery in California across its international distribution chain.

What the heck is yoga bread?

Wandering the aisles of a New Jersey supermarket yesterday, I came across a new product -- "Yoga Bread" by a local bakery (The Baker of Milford, New Jersey). Being a long time practitioner of yoga, I was both intrigued and put off by the name.

These days, yoga is being used to sell just about any and everything -- from Chrysler Town & Country minivans to Chopard limited edition "om" jewelry. It's almost bad enough to push me off the mat and back into the gym.

It's too bad The Baker doesn't have the confidence to sell the bread without a marketing label. "Yoga Bread" is actually pretty good to taste and contains nutritious ingredients such as organic whole wheat and rye, dried unsweetened cranberries, sesame, sunflower, poppy and pumpkin seeds, sea salt, flax seeds and olive oil.

My personal view (more as a consumer than a media and marketing professional) is that The Baker has it wrong. The company would be far better off positioning the bread as nutritious and good tasting -- better for you than say, Pepperidge Farm Raisin Bread, -- while not sacrifing any of the pleasure of eating it.

To top it off, Yoga Bread is described in the context of "five yogic principles" -- proper exercise, proper breathing, proper relaxation, proper diet, positive thinking and meditation. To come up with this, The Baker took the easy route and simply ripped off the Sivananda Yoga website which lists these same five yoga "points." link .

While Sivananda is a respected organization, they have simplified the yoga principles for the American and Western markets. In truth, there are actually eight yoga principles or "limbs" -- not five -- according to the classic text of The Yoga Sutras of Patanjali, the ancient, foundational text from which all forms of Yoga are derived. To learn more about the eight limbs of yoga, here is a quick read on the subject courtesy of Yoga Journal link .

If The Baker insists on using yoga as a marketing prop, then the company should at least credit sources -- and perhaps even make the marketing message accurate!

A Hockey Pro with Teeth, Brains & Values

There are not many professional athletes who would choose to spend their retirement years this way -- particularly if they are as young, talented and smart as Joe Juneau. In this week's Sports Illustrated, Michael Farber writes about the inspiring path Juneau has taken since leaving the NHL after the 2003-2004 season. link

The setting is the town of Kuujjua in the Nunavik region of the Canadian sub-artic. The town's 2,100 residents -- mostly Inuit -- live in drab pre-fab housing. Temperatures drop to -58 degress Fahrenheit in winter. Suicide is the leading cause of death. The life span of an Inuit is almost 15 years less than the Canadian average. Drug and alcohol abuse is rampant among all ages. As Farber reports, many children are "physically, psychologically and sexually abused".

Why would any sane person with a bright future move to Nunavik by choice?

Joe Juneau is both sane and accomplished. He could probably accomplish almost anything he set out to. When he arrived on campus at Rennsselaer Polytechnic Institute in Upstate New York, he did not speak a word of English (RPI is not located so far north that French is the second language). Juneau graduated in three years with a 4.0 grade point average with a degree in aeronautical engineering. He made almost $3 million a year when he was a pro hockey player. Before his pro career, he was an Olympic silver medalist.

Now, this most famous resident of Kuujjua is the head of the Nunavik Youth Hockey League. Juneau is devoting this portion of his retirement life to 180 children who participate in the youth hockey program. Juneau's not scouting young talent for the Montreal Canadiens. His partner of 10 years and mother to their two children, Elsa Moreau, says that Juneau's "investing in a mission, something bigger than himself. This is a grand projet humain."

Juneau's mission is about the education, health and welfare of these kids. To learn more about the Nunavik Youth Hockey League and lend support to Juneau's mission visit their website link

Clinton's Golden Voice Part II

Searching the Washington Post archives, I discovered a complete listing of speeches that Clinton made during the 2001 - 2005 period.
link Over these five years, Clinton gave over 175 speeches (that's 35 a year) at an average rate of about $175,000 each. He gave 9 speeches for $300,000 or more.

Clinton commands a significant premium versus other retired politicians on the speaking tour. Even George H.W. Bush, the 41st president of the United States and friend of corporations and oil nations alike, only receives $50,000 to $75,000 per speech -- about the same rate as Jimmy Carter, ex-president, philanthropist, peace negotiator and peanut farmer. Then again, former vice presidents and presidential candidates don't do nearly as well -- Bob Dole commands $30,000-$50,000 while Walter Mondale's rate is around $25,000. Ed Koch, New York's colorful former mayor, gets only $10,000 per speech despite the high cost of living in New York City.

If you have the money and want to hear someone other than a politician, you can invite legendary basketball coach, Phil Jackson, for $75,000 or former Yankees manager Joe Torre for about the same. Don't want to listen to a coach either? Even egomaniac Donald Trump gets only receives $75,000 per speech -- less than half of Clinton's rate.

The Newark Star Ledger had an article today about the impact of the steroid controversy on the sports collectible market. Unlike Clinton whose fees seem immune to controversy -- Barry Bonds, Mark McGuire and Sammy Sosa have all seen the value of their collectibles (such as bats and game jerseys) drop to about a third of the value they once had before the steroid scandal struck. link

The nexus of the steroids controversy and speaking fees, has not proven to be a bonanza for former U.S. senator George Mitchell, who authored the Major League Baseball Commission report on steroids. You can get him to speak for the bargain rate of only $50,000. Perhaps his rate would be higher if he actually used steroids rather than simply write about them.

The Clinton Money Machine

The disclosure this week that Hillary Clinton recently loaned her presidential campaign $5 million prompted me to give further thought to the Clintons and their current state of affairs. I am not thinking about the presidential campaign, politics or the health of their relationship. I am thinking about their money – they have lots of it!

Since leaving office in early 2001, Bill and Hillary have created an extraordinary process of personal wealth creation. Very few Americans will ever match this rate or level of wealth creation particularly if you consider the age in which they initiated it.

For perspective, the median household net worth for someone in their mid-fifties earning at least $200,000 is just over $800,000. When they left the White House in early 2001, Bill and Hillary were in their mid-fifties. At the time, they owed upwards of $12-15 million – mostly due to outstanding legal bills related to Whitewater, Paula Jones, campaign fundraising investigations and the Monica Lewinsky scandal. They also purchased a house in Chappaqua, New York and took on a mortgage of $1,360,000. Seven years later, their net worth is now approximately $25 million, a +$40 million swing. We should all be as lucky in the run up to our golden years…

The $186,600 Bill receives from his presidential pension and Hillary’s senate salary of $169,300 are probably sufficient to cover the annual Clinton household expenses – enough to cover their overhead but nowhere near enough to pay down debt. That’s where the Clinton money machine kicks in.

Since leaving office, President Clinton has earned up to $50 million from giving speeches around the world at a rate as high as $350,000 a speech. He earned a $12 million book advance for his autobiography, “My Life.” Hillary also earned $8 million from her book advance on “Living History.” In sum, the Clinton’s together probably generated at least $70 million in earnings in the last 7 years. After paying Federal and New York State taxes and other withholdings, their take home pay was probably close to $40 million or roughly $5.7 million annually.

The math is pretty straightforward. The Clintons’ left office owing close to $15 million. They earned at least $40 million since, resulting in a household net worth of $25 million. This is before Bill receives his $20 million buy-out from Ron Burkle. Hillary can easily afford to lend her campaign $5 million.

This significant wealth creation on the part of the Clintons is extraordinary given how much controversy and scandal surrounded them. President Clinton's affair with Monica Lewinsky on its own is enough to end the money-making abilities of most executives. The increased spotlight on sexual harassment in the workplace has quickly ended the careers and earnings power of many.

How did Clinton manage to avoid this dead-end trap?

Well, it helps to be a worldwide celebrity. Celebrities have an unfair advantage over ordinary citizens when overcoming scandal or crime. It also helps to be hugely talented (Roman Polansky the academy award winning director, not Polansky the fugitive). If you have ever witnessed the Clinton charisma or the power of his speech making, you can't help but agree that Mr. Clinton is talented.

If you are a celebrity and are going to commit a crime or be involved in scandal, illicit sex is probably the easiest to overcome relative to your future earning power. Here's is my celebrity rule of thumb on the topic:

1. Illicit sex is the easiest to overcome (Hugh Grant, Eddie Murphy)
2. Drugs and alcohol are usually forgiven (Eric Clapton, Kate Moss)
3. Crimes of the mouth are unfortunately tolerated (Don Imus)
4. If you are going to cheat, do it on a technicality (Martha Stewart)
5. But never cheat the public of its trust (Pete Rose, Pee Wee Herman)
6. Murder is hardest on the pocket book (OJ Simpson)
7. But hurting animals can be just as bad (Michael Vick)
8. There are limits to just how much you can get away with (Michael Jackson)
9. If all else fails, make them feel sorry for you (Britney Spears)
10. Or, thank God you come from a rich and powerful family (Ted Kennedy)

$40 Billion can't buy innovation

Values such as innovation, open-mindedness and collaboration can't be bought -- no matter how much money a company has. Not even $40 billion.

ExxonMobil reported that it earned $40.6 billion in profits in 2007 --its highest level ever. This isn't all that difficult to do with the help of a near doubling of oil prices to about $100/barrel. But for all of this profit, ExxonMobil is standing still as a business.

Last year, it replaced the oil and natural gas that it produced with as many new reserves. But this accomplishment will be difficult to repeat in the years ahead. ExxonMobil is competing for energy reserves with producing nations such as Saudi Arabia and Venezuela as well as national energy concerns in developing countries such as PetroChina, Petrobras (Brazil) and Gazprom (Russia).

Today ExxonMobil and the three other western oil majors -- Chevron, Shell and BP -- have an ever decreasing share of the global oil market. Today they control just 6% of this market and ultimately their share will drop to near zero as producing countries protect their economic interests first.

The demand for energy -- and the worldwide chorus for new, non-fossil fuel sources --should be a bonanza for a company of ExxonMobil's size and financial strength. Unfortunately, ExxonMobil lacks the confidence and core competency to invest, innovate and capitalize on this demand. Instead, it acts more like a bank -- paying shareholders $40 billion last year through a rich mix of dividends and buybacks. Based on how ExxonMobil spends the money it makes, the energy problems of tomorrow appear to be bigger than its balance sheet today.

Like ExxonMobil, Microsoft has the money but not the skill to innovate. Microsoft made headlines last week by setting in motion a $44.6 billion hostile takeover of Yahoo. While this is a bold step financially, it will not strengthen the software giant's position over the long term. Bulking up its advertising audience will do very little to protect Microsoft's desktop dominance against Google or new technological threats.

Innovation costs a lot more than $40 billion... particularly if the legacy of your values has more to do with Goliath than David.