When They’re Not Quite Bad Enough to Fire
In our latest podcast episode, the owners talk about what they do with mediocre employees.
Good Morning!
Here are today’s highlights:
Can Google keep its cookies and eliminate them, too?
Target built an AI chatbot for its employees. They call it $#@%bot.
CrowdStrike was a warning; here’s how to prepare for the next outage.
Listen to Ami Kassar explain what’s changing in the lending markets.
THE 21 HATS PODCAST
This week, Paul Downs, Liz Picarazzi, and Jaci Russo discuss how they review employees and how they make the hard calls when someone is right on the cusp. The conversation starts with a couple of tricky situations that Paul is trying to think through and then progresses through several other issues: Do you use personality tests to avoid or resolve personality conflicts? Paul, Liz, and Jaci have very different takes on Myers-Briggs and the like. Do you make sure no one is ever surprised by a negative review? Do you keep mediocre performers even when you find someone who might be better? “I need to go shut the door before I say this,” Paul tells us.
Plus: Jaci finds a use for ChatGPT. Liz may have found an alternative manufacturer in an unexpected country. And a business owner asks whether he should report a competing company that is endangering its customers and employees. Should the owner report them even though he believes he could face retaliation?
You can subscribe to the 21 Hats Podcast wherever you get podcasts.
MARKETING
Google decides to keep its cookies: “In a major reversal, Google is ending a plan to eliminate cookies in its Chrome browser after four years of efforts, delays, and disagreements with the advertising industry. The decision to keep the pervasive tracking technology known as ‘cookies’ in Chrome comes after a series of setbacks, as both digital-advertising companies and regulators objected to the plan and to Google’s proposed replacement technologies. Chrome users can already choose to block cookies in the browser’s settings. Now, instead of eliminating them, Google will present users with a prompt to decide whether to turn cookies on or off, said the U.K. competition regulator, which has been overseeing Google’s plan to block cookies. ‘It feels like all the pushback was insurmountable and Google realized they have to come up with a better plan,’ said digital media consultant Matthew Goldstein.”
“Google first announced its intention to kill cookies, the technology that logs the activity of internet users across websites so advertisers can target them with relevant ads and track their effectiveness, in 2020. It said it would phase them out by 2022.”
“Advertisers, ad-tech companies, and web publishers have been working to ensure their businesses could withstand the change, in part by rushing to collect their own information on consumers and build millions of detailed customer profiles.”
“Under Google’s new approach, users may opt out en masse. That could effectively make cookies obsolete, but shield Google from any anticompetitive liability for blocking them, said Arielle Garcia, a privacy consultant and director of intelligence at ad-industry watchdog Check My Ads Institute.”
“If many consumers block cookies, some industry executives said Google’s search and YouTube ad businesses stand to benefit because they rely more on internal company data than cookies.” READ MORE
ARTIFICIAL INTELLIGENCE
Target created an AI chatbot to support employees. The employees hate it: “Last month, Target officially plunged into the AI bubble. Like many of its peers in the retail industry, the company went with something simple and accessible — a ChatGPT-esque bot. But instead of focusing it on customer support, Target focused it on employees. ‘We're continually experimenting with new tools to make it even easier for our team to do their jobs and to bring more of what guests love about shopping at Target to life,’ Target CIO Brett Craig enthused in a press release, touting a ‘transformative GenAI Technology’ that would arrive in the all of the company’s nearly 2,000 stores by August.”
“‘Help AI,’ would be a sort of ‘store process expert and coach,’ helping new and seasonal team members learn on the job. It would also ‘answer on-the-job process questions, coach new team members, support store operations management and more,’ making ‘teams’ jobs easier and allow them to work more quickly and efficiently.’”
“Target employees told Forbes that ‘Help AI’ struggles to provide decent answers, is frustrating to use and is more distraction than anything else. Many described it as a waste of company resources. ‘This tool feels like something [Target] can say: Oh look at we’re so innovative,’ one Target employee who wished to remain anonymous for fear of professional reprisal told Forbes, adding that Help AI felt like a bad version of OpenAI’s ChatGPT, but with more restrictions. Said another: ‘We call it the shitbot because it gives shit answers.’”
“When a Texas employee asked Help AI how to handle an active shooter in the store, it told him to confront the attacker if he was near a weapon, specifically suggesting he use a baseball bat.” READ MORE
SMALLBIZ TECH
Here’s how to prepare for the next global tech outage: “While automatically accepting software updates has become the norm—and a recommended security practice—the CrowdStrike outage is a reminder to take a pause, some CIOs said. ‘We still should be doing the full testing of packages and upgrades and new features,’ said Paul Davis, a field chief information security officer at software development platform maker JFrog. Though it’s not feasible to test every update, especially for as many as hundreds of software vendors, Davis said he makes it a priority to test software patches according to their potential severity and size.”
“An incident rendering Windows computers unusable is similar to a natural disaster with systems knocked offline, said Gartner’s MacDonald. That’s why businesses should consider natural disaster recovery plans for maintaining the resiliency of their operations. One way to do that is to set up a ‘clean room,’ or an environment isolated from other systems, to use to bring critical systems back online, according to Chirag Mehta, a cybersecurity analyst at Constellation Research.”
“Businesses should also hold tabletop exercises to simulate risk scenarios, including IT outages and potential cyber threats, Mehta said. Companies that back up data regularly were likely less impacted by the CrowdStrike outage, according to Victor Zyamzin, chief business officer of security company Qrator Labs. ‘Another suggestion for companies, and we’ve been saying that again and again for decades, is that you should have some backup procedure applied, running, and regularly tested,’ he said.”
“The outage also highlights the importance of insurance in providing companies with bottom-line protection against cyber risks, said Peter Halprin, a partner with law firm Haynes Boone focused on cyber insurance. This coverage can include protection against business income losses, such as those associated with an outage, whether caused by the insured company or a service provider, Halprin said.” READ MORE
RETAIL
There’s a pattern of robberies and killings targeting Latino businesses in Alabama's capital: “Robberies have surged this year across Montgomery, with city data showing that there were almost 300 robberies in the first half of this year, compared with about 403 in all of 2023. If the trend continues, the city could have 50 percent more robberies this year than in 2023. Though the city says it does not track crimes by the victims’ race or ethnicity, officials have acknowledged that Latino businesses in particular have been targeted, in part because they often trade primarily in cash. ‘We see you, we hear you and we’re not going to stand for this,’ Mayor Steven Reed said during a news conference the day after the shooting.”
“‘We’re all afraid,’ said Maria Morales, who with her husband owns a Mexican ice cream shop, La Moraleja. The store has been robbed three times since they opened it last year; the first time was in April, when robbers pointed guns at two of their teenage daughters.”
“The pattern of robberies preying on Latinos has been seen elsewhere, too. In 2023, a man pleaded guilty for his role in a robbery spree that targeted businesses owned by Latinos in North Philadelphia, and Latino street vendors in Chicago were the victims of armed thefts. For years, the police in Durham, N.C., have also dealt with robberies aimed at Latinos.”
“In Montgomery, residents say the situation is exacerbated by police response times that stretch past an hour, a lack of Spanish-speaking officers and concerns among some undocumented immigrants that engaging with the authorities could lead to deportation.” READ MORE
CLOSINGS
Another casual dining spot in Boston shuts down, this one after 35 years: “After two weeks of being mobbed with anxious diners, West Street is back to its normal, sleepy self — though now, one more window front has gone dark. The only sign of life is a sheet of paper, attached to the heavy wooden door with a few strips of masking tape. ‘After 35 incredible years, Fajitas & ‘Ritas has closed its doors,’ it reads. ‘We want to thank all of our amazing customers for the support and memories we’ve shared over the years.’”
“For decades, Fajitas & ‘Ritas served as a welcoming refuge for young professionals and nearby college students looking for cheap, filling servings of food and drinks, especially in an area surrounded by more upscale establishments like Estella, Legal Sea Foods, and the Ritz-Carlton’s Artisan Bistro. It was — and increasingly so in recent years — a stable, solitary island in a downtown that has seen its fortunes rise and fall.”
“Part of Fajitas & ‘Ritas unique appeal was the fact that the prices never changed much since the place opened in 1989; adjusting for inflation, a platter of steak fajitas cost almost exactly what it would have back then — which is somewhat remarkable, given how food prices have outpaced the core inflation rate.”
“‘As new places are built, they may not be able to be built with the price point that Fajitas and ‘Rita’s had,’ said owner Brad Fredericks. ‘The whole project is that much more expensive, so how casual can you go?’ Fredericks stressed that his restaurant did not close for financial reasons; the landlord elected not to renew the lease, likely as a first step to eventually putting the building on the market.” READ MORE
ENTREPRENEURSHIP
Somehow, bookstores and publishers are thriving in Ukraine: “The Ukrainian Book Institute told NPR that bookstore chains have opened dozens of new stores in the past year alone and that independent bookshops such as Sens, in Kyiv, are thriving. Ukraine’s largest bookstore chain added 22 new stores in 2023 and plans to add another 22 this year. [Artem Litvinets, editor-in-chief of Vivat, a major Ukrainian publishing house] says Vivat, which is based in Kharkiv, has doubled its staff and book stock since the war began and tripled the number of bookstores from three to nine. ‘And now, with all the power cuts, when there’s no electricity or internet, books are even more popular,’ he says. ‘People read them by flashlight or candlelight and escape into another world.’”
“About 80 percent of Ukraine’s books are printed in Kharkiv, the country's second-largest city, which is just 20 miles from its northeastern border with Russia. Publishing has thrived even as Kharkiv has been under constant attack since Russia launched its full-scale invasion in February 2022.”
“Though many in Kharkiv spoke primarily Russian before 2022, not a single book in Vivat’s collection is in Russian. ‘We have totally rejected the Russian language, which Russia has used as a weapon to extinguish the Ukrainian language,’ says Litvinets, the Vivat editor.” READ MORE
THE 21 HATS PODCAST: DASHBOARD
What Are You Seeing Out There? As CEO of MultiFunding, Ami Kassar sees a lot of small business P&Ls, and he sees how banks are responding to loan applications. And in his view, the ground is starting to shift But in times of uncertainty, he emphasizes, there are always opportunities.
You can subscribe to the 21 Hats Podcast wherever you get podcasts.
Thanks for reading, everyone. — Loren