hi, everyone welcome to "on the money." i'm becky quick. going back to the lab. how one really big company is brewing up change, embracing innovation, and trying to stay nimble. tariffs. you hear the word all the time these days, but how do they work, who pays, and are they effective? it's almost summer travel season, so when you take that vacation you've been planning for months, should you buy trip insurance? and the toys of summer forget the beach pal and shovel. what the cool kids will be playing with in the hot weather. "on the money" starts right now. >> announcer: this is "on the money," your money, your life, your future. now, becky quick

we begin with a cup of joe starbucks was launched almost 50 years ago with one store in seattle. today the brand has 30,000 stores around the globe, serving 100 million customers a week so, how does a company of this size and scale continue to innovate and stay nimble brewing up change is this week's cover story and our kate rogers has more >> reporter: inside this 20,000-square-foot facility at its headquarters in seattle, starbucks is trying something a bit different. the coffee giant is acting more like a start-up than a 48-year-old global corporation this is the trier center, where starbucks projects are going from idea to action in 100 days flat. >> we now have 30,000 stores around the world serving 100 million customers a week and with scale and complexity, it can become the enemy of speed. and so, this was all about how we transform the way we work at starbucks so that we can accelerate the velocity of innovation. >> reporter: employees at the

company's headquarters are able to pitch ideas via a crowdsourcing platform and have them test it out in the facility stephanie lim designed a single-cup brewing prototype made on the lab's 3d printer it went into five stores in may. >> we had this idea about 30 days ago, and we got to our first prototype in about a week. but since then, it's transformed in many different ways this is probably version ten >> reporter: workers are also trying out new delivery mechanisms for the company's partnership with uber eats, reformatting stores to see how different programs like mobile order and pickup might work, and looking for the next big thing when it comes to the menu at its cold pop shop. beverage innovation has been a real priority for starbucks, as its cold drinks in particular tend to see a lot of success so here they're testing out new potential menu additions and much more. since launching some six months ago, more than 100 projects have been tested and more than 1,500 partners have come through the center to either participate in projects or see what's being worked on. but beyond just new ideas,

johnson says he hopes the center signifies a new way of working at starbucks. >> it's a mind-set it's a mind-set that says, let's pick a problem or an opportunity that we're going to focus on and let's try something, let's get it out there, and then let's learn and adapt. >> so, the whole idea here is to draw on the deep knowledge that so many of these employees have from different parts of the business and to use that to make the partner and customer experience even better. >> it's kind of amazing to think somebody can have an idea and 30 days later can have a prototype in five stores. >> exactly. >> how does the pitch process really work? >> they're using an internal crowdsourcing platform called springboard. so, right now, at the company's headquarters, basically any employee at any level can pitch an idea, but they eventually want to open that up to partners all around the country and even open it up in the future to customers who could say this might be better if you tried this in stores. >> kate rogers, thank you very much joining us from seattle, julia sandler with pioneer square

labs the firm works not only with entrepreneurs, but also with large corporations to try to develop innovation labs. julie, thanks for being here it's great to see you. >> hi, becky thanks so much for having me on. >> we saw in kate's piece that the success starbucks is having with its innovations labs is pretty amazing your firm helps corporations develop similar labs, so what makes them successful? what makes them tick >> the corporations that really get this right have two things in common -- they keep really close contact with customers and they're incredibly data-driven like you saw with starbucks, this allows companies to iterate really quickly based on realtime customer feedback and improve the product from there all that being said, the world-class innovation labs out there focus maybe less on process and where the ideas are coming from and really hone in on talent, on people how are you attracting entrepreneurial minds to an organization and how are you developing your rising stars in house to become innovative and entrepreneurial leaders of these new innovations, these spin-offs >> who's doing it the best

>> you know, right now, amazon and google are leading the charge, both in the tech sector. google x, now known as x development, is one of google's most-famed innovation centers. they have spun up waymo, their self-driving car technology. amazon has many examples of this, one of which is lab 1-2-6, innovation centers that created the amazon kindle. >> you mentioned the companies that are doing it best and i can't help but think those are companies with really deep pockets. they're generating a lot of cash, have a lot of things that are kind of out there. can other companies do this, or is the potential for this to be a money pit and suck away resources that maybe are essential to them just doing their basic delivery >> yeah, it's really expensive to build and run an innovation lab in your company. that being said, you don't have to be a massive corporation investing millions in a fancy lab to achieve innovation lablike benefits we've seen a lot of companies, both large and small, focus on

more nimble initiatives -- innovation hours, hackathons, that bring together not only the leadership team, but young people, young voices in the organization, across departments, focused on developing crazy, audacious ideas, and then even developing prototypes to test how customers respond to them. these kinds of initiatives can accrue benefits across the entire organization, not just the c-suite. >> i wonder about that there's new ideas that they're generating you're testing new product ideas. you're really making younger employees feel like they are able to think freely and really play a role in what's happened are there other benefits that an innovation lab offers a company? >> absolutely. i think one of the most overlooked benefits of an innovation lab or even innovation infrastructure are the cultural benefits to an organization when your employees at all levels of seniority see leadership investing aggressively and thinking not only about where a customer's headed over the next couple

years, but over the next 10 to 15 years, that builds a cultural mind-set around thinking several steps ahead. it's a really powerful thing to experience across an organization a lot of these old, legacy corporations that we know and love often complain that, gosh, our employees are really resistant to change, they love sitting around in big meetings and bureaucracies, see cultural atrophy. innovation labs and innovation infrastructure allows your employees to really embrace a forward-thinking mind-set. >> i don't know anybody who loves sitting around in these big, bureaucratic meetings never met one of those people if they xisionz but you mentioned the legacy companies. you think about a sears or blockbuster or jcpenney. how much of it was because they couldn't move fast enough or keep up with changing times. >> well, these days it's innovate or perish jeff bezos, the ceo of amazon, is known for saying that companies in their heyday kind of have a lifetime of about 30-plus years or so. blockbuster, you know, is dying

in its early 30s -- or has perished in its early 30s. sears, by contrast, has lasted for multiple generations, over 100 years, but kind of missed a beat in terms of the digital revolution if you build innovation infrastructure in your company, it allows you to think way ahead of where customers are headed. and in 2019, it's kind of survival 101. >> julie, thank you for your time it's good to see you. >> thanks, becky. up next, we are "on the money. are tariffs on imported goods bad for your wallet? what they mean, what they could cost, and why it really matters. and later, you are probably spending a lot of money on that vacation how to safeguard your trip in case the unexpected happens. right now take a look at how the stock market ended the week.

♪ the u.s. has been waging a trade war with china each week you hear the word tariffs, and often, the threat of more tariffs, but how are they impacting you, and can trade conflicts escalate in other ways michael o'hanlon is senior fellow of policy at the brookings institution. his book "the senkaku paradox: risking great power war over small stakes." nice to have you here. >> nice to be with you. >> michael, tell everybody, what's a tariff, and what impact is the trade war with china having on american consumers >> tariffs are sort of our oldest form of taxes, going back to the days of the revolutionary war and before, and shortly after. it used to be the easiest way for a government to raise money. just put a tax on any imported

good and that money would be collected here by americans, but the goods that were taxed would be foreign in their origin and so, in theory, it sounds great. you get to raise money for the government the only producer that's in some way affected is one that's overseas and of course, it is a way now to be punitive towards an overseas competitor that you don't think is being fair in economic terms or that you think is being disruptive in security terms. we've applied them, therefore, to iran, to north korea, to russia these are usually over security threats or over human rights abuses but of course, president trump is now becoming famous for applying them in trade disputes. >> i guess the question is do tariffs work and as somebody who's looking at military conflict all the time, how do you figure this into the risk factoring >> well, they can work, and the broader issue or category of instruments that we could call sanctions, they can work, but you've got to have your expectations in check, because it ultimately requires changing the psychology and the calculus of someone else.

you're not physically changing their policy you're trying to persuade them and depending on how powerful your tool is and how appropriate it is to the problem at hand, you may or may not get the outcome you want i'm interested in a category of problems in this book, "the senkaku paradox," where russia or china does a military strike of some kind, a probing attack, against a very small island in the pacific, against a tiny, little piece of estonia or nato countries in eastern europe. >> in the example that you point to in "the senkaku islands," china lays claim to this as well as japan how do tariffs play into this potential situation, especially when we're already imposing tariffs on china at this point how does that weaken or strengthen what you would plan on doing in a situation like this >> yeah, it does make it more complicated. just a quick word of background, senkakus are uninhabited, they're tiny japan and china both claim them. the united states doesn't have a stance on whose islands they

are, but we recognize that japan administers them, whatever that means, because nothing happens there, therefore we apply the japan treaty to those islands and say we're sort of on record committed to defending them on behalf of japan if they are attacked this could be a doomsday trip in an inadvertent war -- >> happened in world war i. >> yeah, stakes on their immediate terms but with broader ramifications. you couldn't just watch china grab these things and do nothing, but if they happen to sneak 50 people ashore one night, do you want to really bomb those positions as your main response? so, in that case, i think that's where tariffs and economic sanctions more generally could be very effective. >> as a defense expert, are you more concerned about china or russia >> thank you for that question most people say china. i say russia i think vladimir putin really wants to disrupt the world order in a fundamental way, and he would be willing to do things, accept some risk to try to

weaken nader or dismantle it china i think wants to have its own face, its own characteristics on the existing global order, but that's been for them the goose that lay the golden egg, and i'd be surprised if they want to fundamentally overturn it. i think even though china has more capacity going forward, russia has more of an attitude, more of vain dea vendetta and ie watching both but worry slightly more about russia. >> michael, thank you, good to see you. michael o'hanlon's book is called "the senkaku paradox. up next, we're "on the money. the only thing worse than not getting a vacation is not going on the trip that you actually planned and still having to pay for it we've got tips on travel insurance and what you should do with it. and later, school's out for the summer the toys that will help keep kids and parents entertained be good while i'm gone.

[ laughing ] woo hoo. ♪ welcome to my house mmm, mmm, mmmmm. ball. ball. ball. awww, who's a good boy? it's me. me, me, me.

yuck, that's gross. you got to get that under control. [ dogs howling ] seriously? embrace the mischief. say "get pets tickets" into your x1 voice remote to see it in theaters. ♪ summer travel season is here you may be planning to go to florida, visit europe, or even take an alaskan cruise, but what if some unforeseen complication comes up is it worth having travel insurance? senior personal finance correspondent sharon epperson joins us with some answers on this sharon, it's good to see you. >> good to be here. >> i always wonder about this. i'm tempted. once in a while i buy it sometimes i don't. but when's it a good idea to have travel insurance? >> it really depends on your needs, where you're going and also how healthy you are ask yourself some key questions -- are you traveling outside the country? that usually means it's probably a big-ticket trip, so that's

something to consider. is there a good chance that you're going to need to cancel maybe there are some relatives that are having health conditions back home and you want to make sure you're there for them or can you afford to lose the money you've paid for? that's probably a big one. those are things you need to consider >> if i decide i do want travel insurance, what should i look for in a plan? >> when looking at what some of the biggest claims are, we spoke with folks at square math, which is an online aggregator looking at different plans medical -- nearly a third of claims are for medical reasons trip cancellations, another big issue. and other things people want coverage for, lost baggage or travel delays, they can also be covered depending on the type of coverage you look for, and the cost can vary widely, usually about 4% to 10% of the cost of the trip so if the average cost of vacation is $2,500 and you have to pay $250 for that insurance for that peace of mind, for some people, it may be worth it. >> you mentioned the variation in cost from 4% to 10% is this a situation where you

get what you pay for >> that is exactly right one of the key things to look for, the most important thing is what the exclusions are. you want to make sure that if it does cover medical conditions, that it also covers pre-existing conditions, if you have one. you also want to make sure you don't pay for something you don't need you may already have coverage with certain insurance coverages that you already have, namely, how you pay for your trip. >> with a credit card. >> if you pay with a credit card, a travel credit card, many of them already cover lost baggage, baggage delay some of them do cover that you want to look for that. also look at what happens with different types of insurance carriers go online, do some comparison shopping and then the other thing to consider is when you're going to buy this policy. do it as soon as you book your trip that's the best bet because you're going to be able to have your pick of a lot of different types of coverage. if you wait until very close to leaving on your trip, you may not be able to get -- >> you're going to look suspect, like you're trying to get out of it. >> exactly, and they may charge you more. >> one tip i would give people

if you're going through this, because i've dealt with this myself, if you think there could be a chance that you end up canceling even before you buy insurance, make sure you buy directly from the airline and directly from the hotel. if you know you're in a situation where you may have to cancel a trip, make sure you're not using a third party. >> and also, if you're looking at the cost of a trip versus travel insurance, maybe paying that extra for a fully refundable ticket makes sense. >> right. >> again, you have to really know your family's needs to decide whether or not you need to get the travel insurance, and the type of travel you want to do. >> right you can be stuck in a real bind otherwise. >> exactly. >> sharon, thank you. >> my pleasure. >> sharon epperson. up next "on the money," a look at the news for the week ahead. and looking to keep the kids busy this summer we'll show you the hot, new toys for the season ♪ applebee's new loaded chicken fajitas. now only $10.99.

♪ here are the stories coming up that may impact your money this week. on monday, the national association of homebuilders will release its survey on the state of the housing market. on tuesday, we've got more housing news coming. we'll see how many new homes were started in the month of may. then on wednesday, the federal open market committee will release a statement after a two-day meeting and make a decision on interest rates then on friday, existing home sales for last month will be out. and, by the way, happy birthday to prince william. he's going to be 37. plus, enjoy the sunshine while you can. friday will be the longest day of the year, which means

saturday, the days start getting shorter. boo-hoo-hoo. summer's almost here, and whether you're hitting the road for vacation or staying home, you may need some toys to help keep the kids entertained. joining us right now is jackie briar, editorial director of the toy insider. thank you for being here. >> thank you for having me. >> i usually think of toy segments as something we do around the holidays, but i love this for summer. >> oh, yeah. >> because the kids are out of school, you need to entertainment them. >> keeping active, having fun all summer, it's important. >> let's start with some of the hot toys looks like we're starting with bubbles? >> lick-a-bubble >> what's lick-a-bubble? >> a bubble blower everybody loves bubbles, but these are edible, flavored bubbles. you take the miventure, add a drink. we have gatorade, fruit punch. try to catch them. they make a lot of fun bubbles it tastes like -- >> doesn't taste soapy. >> it doesn't taste soapy. >> how do they make bubbles without it tasting soapy >> you have to put your favorite

drink in these are gatorade fruit punch flavored bubbles >> not bad. >> and you want to keep them active, having fun today this is ribbon ninja so, let's have your wrist. everyone's going wear their little wristband with a ribbon attached to it you're actually going to wear three when you're playing. >> uh huh. how do you win >> you have to try to grab my ribbon and i have to try to grab yours -- >> like flag football? >> no, like using your ninja moves. see? it gets tricky then when you have a lot of people playing, it gets really -- she's determined [ laughter ] >> i like those. this is good for the kids. you can chase them around. >> yeah, we play it in our office so, travel -- >> what about this one >> travel's big. a lot of families are going on vacation for the summer. this is our scribble scrubby vet set and salon. so, this is really fun so cute. easy to take to grandma's, on the road, where you're going comes with these adorable little pets they have washable markers, so you're going to color them in

really cute. >> looks like somebody's already gone to work on this one. >> yes, so cute. but the best part is when they're done, they can spray water on them, put them in the tub, brush the color off and do them again. >> oh, cute! >> kids can do it over and over. >> this looks like a toy i've seen before. >> "toy story 4" is coming out next week. everybody loves buzz lightyear this is blast-off buzz lightyear. he's got a lot of fun sound. >> greetings, i am buzz lightyear, coming in fast! >> it's small, great for taking with you on the go kids can bring the action and fun of the movie home with them. >> everyone around you on the plane is going to love it. >> maybe not on the plane, but you know. >> what about for a big kid like me >> absolutely. so, adults want to have fun, too. this is 5-second rule, perfect for adult game night so, with this game, you have five seconds you flip this over the balls go for five seconds. you have to try to name three things before the time runs out. >> you didn't even get the card out of there before the time ran out. >> i was just showing you.

ready? things in a nightstand. >> a clock, your retainer, water. >> i think you got it! so, whoever gets the most before time runs out is the winner. so, you could play all day i tried to pick clean ones for you. >> oh, good. good idea. is there dirty ones in there, too? >> oh, yeah. it's uncensored. >> okay. >> adult version. >> this is fantastic jackie, thank you. still didn't get my ribbon, but thanks for coming on today and everybody, thank you for joining us that is our show for today we will see you back here next week at that point, we're going to be talking about vacation destinations, where your strong dollar can go further. each week, keep it here. we're "on the money. have a great one and we will see you next weekend

hey, there we're live at the nasdaq in new york city. carter, khouw and dan are getting ready for a big show here's what's coming up. ♪ disney shares have been on a magical rally, and one of the traders says its run is far from over he'll tell you how to play it. plus -- ♪ that sums up what happened to semis today. and carter and dan say it's about to get much worse for the group. they will break it down. and later -- athleisure stocks are on fire thi