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	<description>David Thomas writes about issues important to seniors, retirement activities, finances, health, and aging. He asks questions that may test senior memories, reminisces about food and drink, and offers comments about current events and business subjects. He has also been serializing his 1999 book, “The Common Sense Manager,” and writing letters to his grandson.</description>
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		<title>One reason we have workforce problems</title>
		<link>http://fundamentalsgroup.wordpress.com/2012/01/27/one-reason-we-have-workforce-problems/</link>
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		<pubDate>Fri, 27 Jan 2012 17:34:59 +0000</pubDate>
		<dc:creator>David Thomas</dc:creator>
				<category><![CDATA[Curmudgeon]]></category>
		<category><![CDATA[The Common Sense Manager]]></category>

		<guid isPermaLink="false">http://fundamentalsgroup.wordpress.com/?p=721</guid>
		<description><![CDATA[The mismatch between job openings and skilled applicants is a hot topic these days. Every few days there&#8217;s another interview with a CEO who says he has a lot of job openings he can&#8217;t fill; then there&#8217;s a panel discussion calling for the country to do a better job of workforce preparation. Let me tell [...]<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=fundamentalsgroup.wordpress.com&amp;blog=5764521&amp;post=721&amp;subd=fundamentalsgroup&amp;ref=&amp;feed=1" width="1" height="1" />]]></description>
			<content:encoded><![CDATA[<p>The mismatch between job openings and skilled applicants is a hot topic these days. Every few days there&#8217;s another interview with a CEO who says he has a lot of job openings he can&#8217;t fill; then there&#8217;s a panel discussion calling for the country to do a better job of workforce preparation.</p>
<p>Let me tell you why an attempt at this failed some 20 years ago. A blue-ribbon committee in a major North Carolina county got behind something called a &#8220;tech-prep&#8221; program.&#8221; High schools would team with industry councils to offer apprenticeship programs in such fields as automotive repair and computer programming. There were jobs waiting out there that paid more than $50,000.</p>
<p>The program was promoted widely as a successful approach to workforce preparation.</p>
<p>And just what could be wrong with that? Just one thing. Parents who had been conditioned by years of &#8220;a college education for everyone&#8221; believed that their children had the right to end up in white-collar positions. They had absolutely no interest in seeing them join the &#8220;workforce.&#8221;</p>
<p>&nbsp;</p>
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<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
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			<media:title type="html">David Thomas</media:title>
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		<title>CSM 35 &#8211; The hierarchy of objectives</title>
		<link>http://fundamentalsgroup.wordpress.com/2012/01/23/csm-35-the-hierarchy-of-objectives/</link>
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		<pubDate>Mon, 23 Jan 2012 17:58:10 +0000</pubDate>
		<dc:creator>David Thomas</dc:creator>
				<category><![CDATA[The Common Sense Manager]]></category>

		<guid isPermaLink="false">http://fundamentalsgroup.wordpress.com/?p=716</guid>
		<description><![CDATA[This installment of The Common Sense Manager continues the review of Fundamental 6: Plan, Act, Review, Correct. Creating a hierarchy of objectives for your own organization works the same way.  Here’s an example with three levels in the hierarchy of marketing and sales. The hierarchy of objectives today                                 THE COMPANY            MARKETING                        SHOW MANAGER [...]<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=fundamentalsgroup.wordpress.com&amp;blog=5764521&amp;post=716&amp;subd=fundamentalsgroup&amp;ref=&amp;feed=1" width="1" height="1" />]]></description>
			<content:encoded><![CDATA[<p><em>This installment of</em> The Common Sense Manager <em>continues</em> the review of Fundamental 6: Plan, Act, Review, Correct.</p>
<p>Creating a hierarchy of objectives for your own organization works the same way.  Here’s an example with three levels in the hierarchy of marketing and sales.</p>
<p align="center"><em><strong>The hierarchy of objectives today</strong></em></p>
<p>                               <span style="text-decoration:underline;"> THE COMPANY</span>            <span style="text-decoration:underline;">MARKETING</span>                        <span style="text-decoration:underline;">SHOW MANAGER</span></p>
<p>Objectives:            Grow by 20%                        $1M hexadecyl                   Produce X leads</p>
<p>Strategies:            $3M New products                Sampling plan                  Cosmetic formulation</p>
<p>Tactics:                    Intro hexadecyl                     Intro at show                   Display gift and forms</p>
<p>In this example, the company has an objective of growing by 20%.  More than one strategy will be employed:  expanding overseas, increasing share of market with existing customers, and introducing new products to three markets.  Our example deals with introducing one of those products, hexadecyl alcohol, to the cosmetics industry.</p>
<p>Introducing the product is the company tactic, which becomes one of several objectives of the marketing manager.  This particular objective is to generate one million dollars in sales of the new product.</p>
<p>A strategy chosen is to offer a plan to cosmetics company chemists, in which the company will  provide sample formulations using the product.  This will allow the customers to evaluate the product’s efficacy for themselves, and is expected to lead to the order volume in the objective.  (A strategy rejected is a common one used by competitors:  paying for storage tanks on the customer company premises and offering steep discounts for quantity purchases.)</p>
<p>One of the tactics chosen to implement the strategy is introducing the product at the cosmetics industry trade show and convention.  The company’s trade show manager sets an objective of producing a given number of leads at the show.  The strategy, using a sample cosmetic formulation as a free gift, is decided in conjunction with the company’s lab manager, who has to produce the samples.  The tactic or action plan is to display the gift in the company’s booth, offer it to attendees who fill out an application form.  These forms will provide the leads which will then be followed up.</p>
<p>A complete set of charts showing the hierarchies for each of the company’s growth strategies and tactics will include “Expand overseas” (with specific $ targets by country)  which now becomes another objective of marketing and sales management, with a strategy of using agents (instead of setting up a company sales force) and the tactic is to recruit existing agents.</p>
<p>Similar hierarchies will be generated for “Increase share of market,” which will eventually result in specific sales objectives for each existing customer, set as objectives for each sales representative.  The sales representatives’ strategies for each account, and the action plans for carrying them out, will form the bulk of the sales manager’s plan for the year.</p>
<p>Since the company will have objectives for manufacturing, human resources, finance, etc. the plan for each objective will look like the model hierarchy.  Where a company objective is to reduce manufacturing costs by 12%, for example, the head of manufacturing may establish an objective of increasing material yield to 85%, and another of maintaining indirect labor costs at 5% of total manufacturing costs.  The head of the machine shop will set some objectives for scrap and rework to help achieve the material yield, and the production manager may have an objective of zero direct labor working indirect.</p>
<p>The action plans necessary to achieve the objectives provide information for the departmental and overall budget.  Typical budgets include sales and marketing, production, engineering, human resources, administration.</p>
<p>A sales and marketing budget deals with numbers of sales calls, special customer events, trade shows, advertising, product bulletins, web pages, etc.</p>
<p>Production budgets are based on labor, material and equipment.  They begin with the order input budget produced by the sales organization, or by an inventory buildup and draw-down schedule based on the sales budget.  A production manager will define and display data showing direct and indirect labor hours, equipment utilization and down-time, material costs, scrap rates, etc.</p>
<p>(Software producers have a different problem.  In Japan, they can budget for 9000 lines of code per day per software writer.  In the US, who knows?)</p>
<p>Engineering budgets will cover the professional time required to design new products, fixtures, etc.  Human Resources budgets will deal with the cost of recruiting and training, with benefits changes, compensation increases, etc.</p>
<p>Why doesn’t every CEO ask for plans like these?  For one thing,  CEO’s who are non-business people (most scientist-entrepreneurs) tend to be overwhelmed by the complexity presented (promoted?) by “experts” in the fields of marketing, HR, production, etc.</p>
<p>They also apparently believe you have to know the discipline in order to manage it.  One Ph.D. CEO backed off from evaluating the performance of several key managers because he, himself, couldn’t do their work</p>
<p>This no doubt results from the knowledge-based hierarchy in scientific fields.  Scientists are comfortable supervising and coaching younger scientists because they know more about chemistry or physics than the apprentices.  When supervising scientists, they don’t ask for “results.”  They know what procedures will produce certain results, so they examine the apprentices to see whether they’re following the procedure properly.</p>
<p>What can CEO’s do to avoid this trap?  First of all, they can ask finance, marketing, sales, human resources and production managers to “tell me how it works.”  Production is usually the easiest, and marketing and HR the hardest.  People who worked for Karl Nelson at Enjay were continually grilled about “how it works,” starting at least one manager on a life-long search for a way to give marketing “engineering-type predictability.”</p>
<p>And, regardless of academic or experience background, a CEO can follow the guidelines in the benchmarks and ask for explanations and defense of budgets and plans before the board, the banker of the investors do so.</p>
<p><em>To be continued.</em></p>
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			<media:title type="html">David Thomas</media:title>
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		<title>CSM 34 &#8211; More about objectives, strategies and tactics</title>
		<link>http://fundamentalsgroup.wordpress.com/2012/01/14/csm-34-more-about-objectives-strategies-and-tactics/</link>
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		<pubDate>Sat, 14 Jan 2012 17:16:26 +0000</pubDate>
		<dc:creator>David Thomas</dc:creator>
				<category><![CDATA[The Common Sense Manager]]></category>

		<guid isPermaLink="false">http://fundamentalsgroup.wordpress.com/?p=714</guid>
		<description><![CDATA[This installment of The Common Sense Manager continues Chapter 9&#8242;s discussion of Management Fundamental 6: Plan, Act, Review, Correct. What, then, are the steps you should take to make sure you have a realistic budget that’s based on an operating plan? Start with a forecast of the consumption of your product.  In most industries the [...]<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=fundamentalsgroup.wordpress.com&amp;blog=5764521&amp;post=714&amp;subd=fundamentalsgroup&amp;ref=&amp;feed=1" width="1" height="1" />]]></description>
			<content:encoded><![CDATA[<p><em>This installment of </em>The Common Sense Manager <em>continues Chapter 9&#8242;s discussion of Management Fundamental 6: Plan, Act, Review, Correct.</em></p>
<p>What, then, are the steps you should take to make sure you have a realistic budget that’s based on an operating plan?</p>
<p>Start with a forecast of the consumption of your product.  In most industries the sales force is asked to do this on a customer-by-customer basis.  Their bottoms-up forecasts are then subjected to a sanity check by someone who has looked at the industry from the top down.  In Chapter four we saw an illustration of this:</p>
<p>If you supply paper-making fabrics and felts to the paper industry, variations in expenditures for consumer advertising are important to you.  The fewer dollars spent, the less ad space is bought in newspapers.  This means there aren’t as many pages in the papers, so the publishers don’t buy as much newsprint from the paper companies.  The papermakers in turn don’t produce as much newsprint, so they run their machines fewer hours, and the fabrics and felts don’t need to be replaced as often.</p>
<p>How do we generate a plan that produces budget numbers?</p>
<p>In chapter four we also saw that a plan consists of objectives, strategies and tactics, or action steps.  The actions cost money, which tells you what the expense budget is.  They are also expected to generate revenue.  The chapter four example:</p>
<ul>
<li>Introduce new product at trade show in March.  Three salespeople, two days, expenses $3000.  Expect X leads.  Target date March 31.</li>
<li>Follow up leads with direct mail and phone calls.   Mailers and postage $1500, phone calls $275.  Expect 0.3X expression of interest. Target date April 25.</li>
<li> Call on interested parties and propose sampling plan.  Five salespeople, two days, expenses $5000.  Expect 0.75(0.3X) response. Target date May 30.</li>
<li> Expect sample order input of $Y [*] based on response.  Target date June 30.</li>
</ul>
<p><em>[*] Typical order is 50 pieces, at $17 per piece, total $850.00.  If X leads = 1000, the plan calls for sample orders totaling $191,250.00     (1000 x 0.3 x 0.75 x 850).  Total costs planned at $9775.00.  </em></p>
<p>This becomes the budget for that event.  And where do these numbers come from?   As in the case of the percentage method, some come from historical data, or your experience with actions like this in the past.  (Or somebody else’s experience).  But more likely the numbers come from assumptions you make (which are subsequently validated, corrected or discarded).  Sometimes the assumptions are pure grit.  If you’re right, you’re a hero.  That’s the thrill of risk being rewarded.</p>
<p>Fortunately, not all budgets are based on introducing new products.  More often than not, you’re working with a known customer base and an existing sales organization.  During the annual planning cycle you can examine the prospect of increasing sales to existing customers, adding new ones, and changing the activities and expense of the sales organization.  When sales executives are asked how they got the numbers, they can refer to history and the new assumptions.</p>
<p>In other words, sales revenue is based on unit volume times price.  Unit volume is based on numbers of customers and the amount they’ll buy.  That is based on knowledge of the total number of customers and the total number bought, and on plans that tell how you’re going to take some business away from competition, or take a major share of the incremental growth in the market.</p>
<p>As defined in Chapter Four, the planning process considers the status of the market, the product, the competition, then reviews conditions and trends in the environment, and identifies problems and opportunities.  After these steps are taken, the CEO is in a position to state the basic objectives for the coming year.</p>
<p>These will ordinarily include the basic financial objectives: revenue, expense, gross and net margins, return on equity.  They should also include any special objectives concerning the way the company carries out its mission, such as expanding overseas, developing strategic alliances, changing its image, etc.</p>
<p>After the CEO reviews these objectives with the heads of various profit centers or functional departments, the head of each unit is asked to prepare objectives that support the overall company’s objectives, and to bring those objectives back to the team table for general discussion.</p>
<p>Depending on the size of the organization and the levels of management, this process repeats until all employees have been involved in the objective-setting process.  Even if the company is just you and your three key associates, do it.</p>
<p style="text-align:left;" align="center">In this process, what you’re doing is establishing a hierarchy of objectives.  A good illustration of a hierarchy relates to the objectives, strategies and tactics used by the Allied Forces on D-Day, June 6, 1944.</p>
<p align="center"><em><span style="text-decoration:underline;">The hierarchy of objectives – D-Day</span></em></p>
<p><em>                              <span style="text-decoration:underline;">ALLIED FORCES</span>            <span style="text-decoration:underline;">U.S. FORCES</span>                        <span style="text-decoration:underline;">TASK GROUP 10</span></em></p>
<p><em> Objectives:             Get to the Rhine            Take Omaha Beach            Land LSTs           </em></p>
<p><em>Strategies:               Take France                    Feint at Calais                    Naval cover fire</em></p>
<p><em>Tactics:                      Land at Omaha            Send LSTs first            2 rds/min 0600-0630</em></p>
<p>In this example the objectives of each organizational unit are derived from the tactics of the unit to which it belongs, forming a hierarchy of objectives. The Allied Forces have the objective of getting to the Rhine.  The strategy chosen is to take France (as opposed to Belgium, for example) and the tactics, or action plans, call for landing at Omaha Beach.</p>
<p>In this organization structure, the U.S. Forces have the objective of taking Omaha Beach.  The strategy is to feint at Calais, using Patton and a dummy force, thereby drawing Rommel away from the real target area.  And the tactics used to land the troops are to send LST’s first.</p>
<p>Task Group Ten, a unit of the U.S. Forces, has the objective of getting the LST’s landed safely.  Their strategy is to use naval cover fire, and the tactics of the shipboard gunners call for laying down a barrage of two rounds per minute between the hours of 6:00 and 6:30 a.m. in a particular sector above and behind the target beach.</p>
<p>As the planning process unfolds, the objectives, strategies and tactics of each layer in the organization are related to those of each other.  And, looking at the chart, it becomes apparent how the specific tactics of units all the way down to the naval gunners fit into the big picture and help to achieve the overall objectives of the Allied Forces.</p>
<p>This is, of course, highly simplified, since there were many more than three levels of organization, and the actual plans were inordinately complex.</p>
<p><em>To be continued.</em></p>
<p>&nbsp;</p>
<p>&nbsp;</p>
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		<title>There are no bartenders in dry counties</title>
		<link>http://fundamentalsgroup.wordpress.com/2012/01/10/there-are-no-bartenders-in-dry-counties/</link>
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		<pubDate>Tue, 10 Jan 2012 18:43:30 +0000</pubDate>
		<dc:creator>David Thomas</dc:creator>
				<category><![CDATA[Wining & Dining]]></category>

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		<description><![CDATA[More recollections about wining and dining in the past. It will come as no surprise to older Americans that many counties in the South are still dry, nor that many more were in that same state years ago.  Neither should it be a surprise that hotels in those counties do not have bartenders on the [...]<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=fundamentalsgroup.wordpress.com&amp;blog=5764521&amp;post=712&amp;subd=fundamentalsgroup&amp;ref=&amp;feed=1" width="1" height="1" />]]></description>
			<content:encoded><![CDATA[<p><em>More recollections about wining and dining in the past.</em></p>
<p>It will come as no surprise to older Americans that many counties in the South are still dry, nor that many more were in that same state years ago.  Neither should it be a surprise that hotels in those counties do not have bartenders on the payroll &#8211; not even hotels attempting to circumvent the law.  I discovered the significance of this in 1966 on a trip from New Jersey to South Carolina.</p>
<p>This was a sales trip.  Dan Zibello, Southeastern sales engineer for Exxon Chemical Rubber Division was taking me, his regional manager, to visit some important customers in and around Charleston.  Ron Kyle, a newly hired engineer, was coming along to observe.  We had appointments at several companies, including General Asbestos and Rubber Company (GARCO).</p>
<p>The technical director of GARCO was Bob Peterson, a former Exxon Chemical employee.  I had known Bob when he worked at the synthetic rubber applications laboratory in Linden, New Jersey.  On several occasions he had solved some very tricky technical problems for customers of mine.  It was going to be good to see him.</p>
<p>“Dan,” I said when we first started to plan this trip, “one thing you need to make sure of is that I get to buy Bob Peterson a martini when we take him to lunch.  I know Charleston is dry, but you ought to be able to work something out.”</p>
<p>Our itinerary included Kingsport, Tennessee before Charleston.  Dan had been there before, so he knew how to solve that city’s “buy the customer a drink” problem.  He had scheduled dinner for our Tennessee Eastman customers at Kozel’s, a popular steak house on the outskirts of town, and one of their favorite places to eat.  Ron Kyle would help Dan with the drink arrangements.</p>
<p>When you ordered a sirloin steak at Kozel’s it arrived on your personal 15 inch oval platter, probably extending past the edges.  French fries and onion rings came in voluminous baskets, accompanied by wooden cutting boards each holding an entire loaf of garlic bread.  Red tablecloths.  Three kinds of steak sauce, plus Tabasco and jalapeno. Lots of napkins.  And setups &#8211; ginger ale, club soda, coke &#8211; into which you poured the liquor you had brought with you in brown bags.</p>
<p>That morning, when we flew into the Kingsport-Bristol-Johnson City Airport, Dan gave Ron the assignment of picking up the liquor we would take to Kozel’s.  The easiest way was to drive a couple of miles north into Virginia, and pick it up in a state liquor store.  After we checked into our motel, Ron took the rental car and went after the booze.</p>
<p>Dinner was a great success.  As we were toasting each other with our Virginia-procured highballs, one of the customers asked “Have you told Ron yet?”  “I haven’t,” Dan answered.  “Would you like to?”  The customer proceeded to do so.  “Ron,” he grinned, “you’re the latest in a long line of rookie salesmen who’ve been sent across the state line for booze.  And we appreciate the risk you took.”  Ron looked at him with a puzzled frown.  “You see, it’s against the law to bring liquor into the state, and every now and then the State Troopers stop cars at the state line and open their trunks.  The fine is $500, and they can impound the car if they feel like it.”  Ron smiled weakly.  “No real need to worry, though,” the customer went on.  “They haven’t caught an Exxon salesman yet.”</p>
<p>That was Tennessee.  But Charleston &#8211; and Bob Peterson’s martini &#8211; was another matter.  As it turned out, Dan had been pretty resourceful.  He had called Bob and told him I wanted to buy him a martini, and asked how that could be accomplished.  Bob said it was about time Dave bought a drink and told Dan he’d make sure we went to the right place for lunch.</p>
<p>The right place was a Holiday Inn.  Bob knew the people there, and he knew they kept a liquor cabinet in the dining room for special guests.  That’s where Dan took us for lunch.</p>
<p>A tall blonde hostess in a royal blue woolen dress greeted us.  She seemed pleased to see Bob, and was very cordial to the rest of us, too.  “We’re going to count on you for a few drinks,” Bob said.  She nodded her head as she led us into the dining room and seated us.</p>
<p>When the waitress came she apparently knew we were to be given access to the special liquor cabinet.  “We don’t serve too many drinks here,” she said, “but we’ll surely try to take good care of you.”  Dan ordered a Loewenbrau and Ron said he’d have a bourbon and soda. Bob, as I expected, asked for an extra dry martini straight up with an olive.  I looked up at the waitress.  “Make mine a Gibson, but I’d like it on the rocks.”</p>
<p>She went away and we continued our conversation.  A few minutes she came back carrying a bourbon and soda, which she put down in front of Ron.  “Bourbon and soda,” she announced.  Then she faced Dan.  “We have Heineken’s.  Is that a Loewenbrau?”  Dan said Heineken’s would be fine.  “Your two drinks will take a little longer,” she told Bob and me.   “They’re being looked up in a book.”  We winced a bit, but didn’t say anything.</p>
<p>Eventually the waitress reappeared with a bottle of Heineken’s for Dan and the two mixed drinks for Bob and me.  The martini straight up looked okay:  you could see through it, it was in a stem glass, and there was an olive in it.  I wasn’t so sure about the Gibson, though.  It was a bit cloudy and had a light green cast to it. I kept looking at it.  A gimlet!  “Just a minute,” I called out.  “I can tell this drink isn’t right without even tasting it.”  The waitress looked disappointed.  “What should it be?” she wanted to know.  I pointed at Bob’s glass.  “Just the same as his, except with an onion.”</p>
<p>She picked up my glass and started out of the dining room.  “Just the same, except with an onion,” she muttered to herself.  By the time it dawned on me it was too late to catch her.  Sure enough, back she came with the gimlet, which now contained an onion.</p>
<p>The tall blonde hostess in the blue dress was right behind her.  She looked at Bob, the only one with a familiar face.  “How are the drinks?”  she asked.  “Almost okay,” Bob said, “but your bartender needs to learn how to make a Gibson.”</p>
<p>“I know!” she wailed.  “I’m the bartender!”</p>
<p>&nbsp;</p>
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<p>&nbsp;</p>
<p><span style="text-decoration:underline;"> </span></p>
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			<media:title type="html">David Thomas</media:title>
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		<title>A fresh face for 2012</title>
		<link>http://fundamentalsgroup.wordpress.com/2012/01/09/a-fresh-face-for-2012/</link>
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		<pubDate>Mon, 09 Jan 2012 18:04:17 +0000</pubDate>
		<dc:creator>David Thomas</dc:creator>
				<category><![CDATA[Observations]]></category>

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		<description><![CDATA[How about this new look? It results from about three hours of work by son, David B. Thomas, the world&#8217;s leading authority on social media. He&#8217;s the one who created the blog for me in the first place, about three years ago, more or less as a 78th birthday present. I appreciate it a lot, [...]<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=fundamentalsgroup.wordpress.com&amp;blog=5764521&amp;post=710&amp;subd=fundamentalsgroup&amp;ref=&amp;feed=1" width="1" height="1" />]]></description>
			<content:encoded><![CDATA[<p>How about this new look? It results from about three hours of work by son, David B. Thomas, the world&#8217;s leading authority on social media. He&#8217;s the one who created the blog for me in the first place, about three years ago, more or less as a 78th birthday present. I appreciate it a lot, and I hope you will, too.</p>
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			<media:title type="html">David Thomas</media:title>
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		<title>The wine and whisky hotline</title>
		<link>http://fundamentalsgroup.wordpress.com/2012/01/01/the-wine-and-whisky-hotline/</link>
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		<pubDate>Sun, 01 Jan 2012 17:18:36 +0000</pubDate>
		<dc:creator>David Thomas</dc:creator>
				<category><![CDATA[Wining & Dining]]></category>

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		<description><![CDATA[This time of year the men in my family tend to get into discussions about wine and whisky. We&#8217;re shopping for them as gifts, seeking opinions from wine-shop owners, thinking about the rare Scotch we&#8217;re hoping to receive.  And we go to parties, where partaking of grape or grain often strengthens people&#8217;s opinions. &#8220;Why would [...]<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=fundamentalsgroup.wordpress.com&amp;blog=5764521&amp;post=695&amp;subd=fundamentalsgroup&amp;ref=&amp;feed=1" width="1" height="1" />]]></description>
			<content:encoded><![CDATA[<p>This time of year the men in my family tend to get into discussions about wine and whisky. We&#8217;re shopping for them as gifts, seeking opinions from wine-shop owners, thinking about the rare Scotch we&#8217;re hoping to receive.  And we go to parties, where partaking of grape or grain often strengthens people&#8217;s opinions. &#8220;Why would you pick a Pomerol and not a St. Estephe to go with rack of lamb?&#8221; is enough to get the ball rolling. Or &#8220;Laphroig isn&#8217;t even in the same class as Lagavulin.&#8221;</p>
<p>I used to call my father if the discussion reached an impasse, or if nobody could answer a question. He had grown up in the food and drink business in Germany, and he knew everything. These days my son calls me, as he did one recent evening when his gourmet cooking group was meeting, eating and drinking. &#8220;What&#8217;s the difference between Spaetlese and Auslese?&#8221; I told him the difference between late harvest, which simply refers to the maturity of the grapes, and select harvest, in which grapes are inspected before they&#8217;re picked.</p>
<p>You can get those answers these days by Googling the two terms, but I still appreciate being asked. My father once gave me an answer that led to more questions, the answers to which weren&#8217;t that easy to find.</p>
<p>This had to be at least 30 years ago. Whoever was in on the conversation knew something about wine, German in particular, because we were apparently trying to agree on the best German Rieslings. We went through the Rhine vs. Mosel discussion, and someone even invoked history to suggest that Alsatian wines could be considered German.  Finally I said, &#8220;I know someone who can settle this for us,&#8221; and described my father&#8217;s credentials. Everybody waited till I got him on the line.</p>
<p>&#8220;The best Rieslings in Germany,&#8221; he said, &#8220;are the wines of the Widow Thanisch.&#8221; My silence must have told him this didn&#8217;t register, because he said, &#8220;You can figure it out,&#8221; and then he sent his love to the family, and hung up.</p>
<p>He was right: I did figure it out. But without instant searches it took me a while to connect the name Thanisch to the famous Mosel wine, Berkasteler Doctor. It was indeed Doctor Thanisch, and he was indeed the late Doctor Thanisch, and his widow was indeed now the owner of the winery.</p>
<p>If my son ever calls to get me to settle an argument about the best oak-finished Speyside single malt, I plan to tell him it&#8217;s from the distillery closest to the bakery where Walker&#8217;s Shortbread is made.</p>
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			<media:title type="html">David Thomas</media:title>
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		<title>CSM 33 &#8211; Plan, Act, Review, Correct</title>
		<link>http://fundamentalsgroup.wordpress.com/2011/12/22/csm-33-plan-act-review-correct/</link>
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		<pubDate>Thu, 22 Dec 2011 17:30:09 +0000</pubDate>
		<dc:creator>David Thomas</dc:creator>
				<category><![CDATA[The Common Sense Manager]]></category>

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		<description><![CDATA[This installment of The Common Sense Manager begins Chapter 9, which deals with Benchmark 6, PLAN, ACT, REVIEW, CORRECT “Are you going to do that?  Then why aren’t you writing it down?”  Bob Starski Never leave a meeting without deciding and recording “who will do what by when.”  The management team that fails to decide [...]<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=fundamentalsgroup.wordpress.com&amp;blog=5764521&amp;post=693&amp;subd=fundamentalsgroup&amp;ref=&amp;feed=1" width="1" height="1" />]]></description>
			<content:encoded><![CDATA[<p><em>This installment of The Common Sense Manager begins Chapter 9, which deals with Benchmark 6, </em></p>
<p style="text-align:left;"><strong>PLAN, ACT, REVIEW, CORRECT</strong></p>
<p><em>“Are you going to do that?  Then why aren’t you </em><br />
<em>writing it down?”  Bob Starski</em></p>
<p>Never leave a meeting without deciding and recording “who will do what by when.”  The management team that fails to decide on actions, assign responsibilities, set target dates, and check results regularly is the management team that ends the year wondering why they missed revenue, share of market, net profit and return on equity.  Teams like that don’t last long.</p>
<p>In this chapter we’ll examine how successful management teams use the “Plan, Act, Review, Correct” fundamental to manage for results as well as for individual employee development.  We’ll review the benefits of the Operations Review format, which helps managers develop the habit of evaluating their own plans and programs, and taking corrective actions when necessary (not waiting for the boss to react).  The Operations Review handles this in a team context, so that managers are informing their peers about results, what plans worked and what plans didn&#8217;t work, and what changes are in the works to insure that managers meet the commitments they made to their fellow team members.</p>
<p>In “Know Where You Want to Go” we saw that objectives are the key elements of an annual marketing or business plan, and we examined the criteria for a good objective.  We then saw that the “good people (you&#8217;ve asked) to help you get there” need to have individual performance objectives that mesh with those of the overall company.  In this chapter we’ll see how successful companies set objectives and match them with resources, action steps and deadlines.  Finally, we’ll see how this approach leads to the perennial use of a significant management tool:  saving the tools and techniques that work, finding out what’s wrong with those that don’t, and either fixing or discarding them.</p>
<p>Successful companies that have adopted the Management Fundamental “Plan, Act, Review, Correct” have several characteristics that serve as benchmarks:</p>
<ul>
<li>The company’s budget is based on an operating plan.</li>
</ul>
<ul>
<li>That budget and plan can be defended and explained under rigorous questioning by a board, a banker, or an investor.</li>
</ul>
<ul>
<li>Progress vs. objectives is assessed on a regular basis.  Executives and managers are able to report on whether they did what they said they would do, whether it achieved the expected results, and, if not, what they’re going to do to get back on track.</li>
</ul>
<ul>
<li>Executives and managers at all levels acknowledge their accountability for their parts of the plan and budget.</li>
</ul>
<ul>
<li>Executives and managers who are not successful are given opportunities to improve, including training, coaching, etc.  If they remain unsuccessful, they are replaced.</li>
</ul>
<p><strong>BENCHMARK:  The company’s budget is based on an operating plan.</strong></p>
<p>When Dr. Michael Schiff was head of accounting at New York University’s Graduate Business School, he used to tell his students:  “The basic accounting system has three parts.  You have products, you have customers, and you have a little tin box to keep your money in.  When a customer buys your product, you take the money and put it in the little tin box.  When you have to buy more products from your supplier, you take the money out of the tin box and pay for them.  And when you have to pay for heat, light, and somebody to sweep the store at night, you take more money out of the tin box.”</p>
<p>There may be some people with tin boxes who don’t worry about budgets, but not very many.  Sooner or later, even the tin box accounting system will force you to make some predictions about how much you’re going to sell, what price you’re going to get, what the product costs you to buy or make, and what your other expenses will be.  Either that, or you’ll take your empty tin box and go home.</p>
<p>But doesn’t every company have a budget?  Most likely.  The question is where the numbers came from.  They can either come from a comparison with last year, or they can be zero-based.</p>
<p>Most often the budget is based on last year’s performance, with an increase in revenue and a decrease in expense.  This is, after all, the mantra of a stock-market driven corporate community: compounded annual increases in earnings per share.  It’s enough to make someone think the answer to “what business are we in?” is “beating last year.”</p>
<p>Zero-based budgets force people to look at what they want to accomplish, and how much it will cost.  Some such budgets use percentages, others (the kind we want) are based on action plans.</p>
<p>In the percentages method, you forecast your sales, figure your gross margins at 25 to 35% of sales, and allocate 6% of sales for selling expense, 13% for general and administrative expense, maybe something for R&amp;D.  What’s left is profit.</p>
<p>Where do you get numbers like this?  Some come from historical data, or your experience with actions like this in the past.  (Or somebody else’s experience).  Some come from standard data, which may be published by trade groups, or result from studies conducted by researchers at universities or companies.</p>
<p>Chief financial officers like to work with percentages that are average, usual, or acceptable.  They usually disagree with the manufacturing, sales and administrative people, mainly because those line managers don’t have as much data as the CFO would like, and can’t demonstrate a cause and effect relationship between expenditures and revenue generation.</p>
<p>Needless to say, the budget should reflect what you expect to do.  When it’s based on factors other than planned actions and the results they are expected to achieve, the budget will probably create false hopes.</p>
<p>According to a partner in a firm that helps arrange financing, the problem with many small company business plans is that they don’t actually meet their projections.  This, he says, is because they build “unrealistic expectations into a plan’s financial projections and try to inspire excessive optimism in prospective bankers and investors.</p>
<p><em>To be continued.</em></p>
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			<media:title type="html">David Thomas</media:title>
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		<title>Ursulines&#8217; wine pitch flops</title>
		<link>http://fundamentalsgroup.wordpress.com/2011/12/21/ursulines-wine-pitch-flops/</link>
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		<pubDate>Wed, 21 Dec 2011 17:38:06 +0000</pubDate>
		<dc:creator>David Thomas</dc:creator>
				<category><![CDATA[Wining & Dining]]></category>

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		<description><![CDATA[If you&#8217;re familiar with French vineyards you may want to skip the background and go right to the limerick. That&#8217;s right: limerick. In the French region of Beaune, the Ursuline Sisters produce wine at their estate, the Clos des Ursules. Further south in Rhone lies the estate of Chateauneuf du Pape, or the Pope&#8217;s new [...]<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=fundamentalsgroup.wordpress.com&amp;blog=5764521&amp;post=689&amp;subd=fundamentalsgroup&amp;ref=&amp;feed=1" width="1" height="1" />]]></description>
			<content:encoded><![CDATA[<p>If you&#8217;re familiar with French vineyards you may want to skip the background and go right to the limerick. That&#8217;s right: limerick.</p>
<p><em>In the French region of Beaune, the Ursuline Sisters produce wine at their estate, the Clos des Ursules. Further south in Rhone lies the estate of Chateauneuf du Pape, or the Pope&#8217;s new castle. Legend has it that the older nuns once persuaded a novice to call the Pope by telephone and attempt to sell him some wine from their Clos. Legend further has it that the Pope was selling his Chateauneuf du Pape to the Vatican in great quantities, and wanted no competition.</em></p>
<p><em>Here&#8217;s the tale:</em></p>
<p>An eager young Novice from Beaune</p>
<p>Tried to sell the Pope wine on the phone.</p>
<p>But the Pontiff demurred</p>
<p>And said, &#8220;Haven&#8217;t you heard?</p>
<p>I&#8217;m flogging my own brand from Rhone.&#8221;</p>
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			<media:title type="html">David Thomas</media:title>
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		<title>November celebrity birthdays</title>
		<link>http://fundamentalsgroup.wordpress.com/2011/12/16/november-celebrity-birthdays/</link>
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		<pubDate>Fri, 16 Dec 2011 14:20:10 +0000</pubDate>
		<dc:creator>David Thomas</dc:creator>
				<category><![CDATA[Retirement]]></category>

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		<description><![CDATA[The celebrated among us celebrated 90+ years in November; we also note those who entered their 80s for the first time. Jaques Barzun is 104 He was Professor and Dean at Columbia University, taught the “Great Books.” Two of his books, Teacher in America, and The House of Intellect, became popular and had a great [...]<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=fundamentalsgroup.wordpress.com&amp;blog=5764521&amp;post=686&amp;subd=fundamentalsgroup&amp;ref=&amp;feed=1" width="1" height="1" />]]></description>
			<content:encoded><![CDATA[<p><em>The celebrated among us celebrated 90+ years in November; we also note those who entered their 80s for the first time.</em></p>
<p><em></em><strong>Jaques Barzun is 104 </strong>He was Professor and Dean at Columbia University, taught the “Great Books.” Two of his books, <em>Teacher in America, </em>and <em>The House of Intellect, </em>became popular and had a great deal of influence on American attitudes toward culture and education in the 1940s and 50s.</p>
<p><strong>Billy Graham is 93, </strong>and has just been released from Mission Hospital in  Charlotte, NC, where he was being treated for pneumonia.<strong>  </strong>This legendary Southern Baptist has been a spiritual adviser to 12 US presidents. He is number seven on Gallup’s list of admired people for the 20<sup>th</sup> century.</p>
<p><strong>Efrem Zimbalist, Jr. is 93.  </strong>Son of a famed Russian violinist and father of a successful actress, this perennial favorite was best known for his long-term starring role in <em>The FBI </em>series.  He’s also remembered for <em>Maverick </em> and <em>77 Sunset Strip</em>, although he might have been outshone in <em>Strip</em> by Kookie, who kept combing his hair.</p>
<p><strong>Judge Joseph Wapner is 92.  </strong>He was the first TV judge, presiding over <em>The People’s Court</em> from 1981 to 1993.  He served for 18 years on the Los Angeles County Superior Court, and started on TV the year he retired.  He also presided over <em>Judge Wapner’s Animal Court </em>from 1998 to 2000.  In  2009 he received a star on the Hollywood Walk of Fame.</p>
<p><strong>Alan Young is 92.</strong>  If you remember the 1960s TV series, <em>Mr. Ed,</em> you’ll recall Alan as the owner of the talking horse (who wouldn’t talk to anyone but him).  He won an <em>Emmy</em> for that role. (no indication of any award for the horse).  He also was the voice of <em>Scrooge McDuck.</em></p>
<p><em>No new octogenarians this month.</em></p>
<p><em>Many happy returns to these good people, and greetings to any of you who celebrated in November</em></p>
<p><em> </em></p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
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		<title>The Winter Curmudgeon</title>
		<link>http://fundamentalsgroup.wordpress.com/2011/12/07/the-winter-curmudgeon/</link>
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		<pubDate>Wed, 07 Dec 2011 19:08:38 +0000</pubDate>
		<dc:creator>David Thomas</dc:creator>
				<category><![CDATA[Curmudgeon]]></category>

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		<description><![CDATA[Hot political buttons We don&#8217;t want excessive taxes for our friend, the small business owner in town who runs an insurance agency. Stick it to those hedge fund operators in Greenwich, Connecticut who build those $50 million dollar mansions and buy their own 747s. We don&#8217;t want to deport that nice couple who came here [...]<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=fundamentalsgroup.wordpress.com&amp;blog=5764521&amp;post=683&amp;subd=fundamentalsgroup&amp;ref=&amp;feed=1" width="1" height="1" />]]></description>
			<content:encoded><![CDATA[<p><strong>Hot political buttons </strong></p>
<p>We don&#8217;t want excessive taxes for our friend, the small business owner in town who runs an insurance agency. Stick it to those hedge fund operators in Greenwich, Connecticut who build those $50 million dollar mansions and buy their own 747s.</p>
<p>We don&#8217;t want to deport that nice couple who came here 25 years ago and operate that cozy restaurant in town. Get rid of all those guys who live in the big city and sell drugs.</p>
<p>We don’t want the banks to foreclose on our neighbors.  Go after those guys on the other side of town who didn’t put any money down and lied about their assets and income.</p>
<p><strong>Customer ratings</strong></p>
<p>Amazon asks us to rate our shopping experience with their used book contractors. Okay. I ordered a book. It arrived. Why is that worth any stars?</p>
<p><strong>Jazz nightmares</strong></p>
<p>In his 11/12 WSJ column, Joe Queenan resurrects an old joke about the worst things in music. An explorer has been captured by an African tribe. In the distance, drums keep up an incessant, devastating beat. &#8220;When will those drums ever stop?&#8221; cries the explorer. The tribal chief warns him: &#8220;When drums stop, very bad thing will happen.&#8221; The explorer quiets down, until he can&#8217;t stand it anymore. &#8220;What bad thing will happen if the drums stop?&#8221; he asks. The chief gives him a morose answer: &#8220;Bass solo.&#8221;</p>
<p><strong>Male memory test</strong></p>
<p>What does the TV announcer say between the words &#8220;Viagra&#8221; and &#8220;erection lasting more than four hours?&#8221;</p>
<p><strong>Mr. Language Curmudgeon</strong></p>
<p><strong></strong>What is with &#8220;it&#8217;s so fun?&#8221; Fun is a damn noun, damn it!<strong><span style="text-decoration:underline;"><br />
</span></strong></p>
<p>Writing a good cop show requires that you adopt a cop vocabulary.  It’s a shield, not a badge. And it’s the two-four, not the twenty-fourth precinct.</p>
<p>What is a Forward slash? How does it differ from a slash? If you&#8217;re worried that we might mistake it for Back-slash, say &#8221; Sinister to Dexter slash.&#8221;</p>
<p><strong></strong>Peggy Noonan (WSJ 7/16) or the proofreader let someone perish in “a hale of bullets.&#8221;</p>
<p>Another case, this one from TV.  Bret Baier (Fox News), or the teleprompter script-writer: “statue of limitations.” Not to be confused with the statute of liberty.</p>
<p>A news announcer reported that a cargo train derailed.  Would that be what I’ve always known as a freight train? Come to think of it, they don’t have freight planes.</p>
<p>If you want to illustrate the vagaries of the English language, ask someone to pronounce this: “A four-hour tour.”</p>
<p><strong></strong>We’re having grammar problems in our attempts to avoid convicting the accused in advance.  Here’s the latest: “assaults he is allegedly to have committed.”</p>
<p>Just what is the logic in using the phrase, &#8220;I&#8217;m just saying?&#8221; All I can think of is, “You can’t attack me, because I may not mean this.” If that’s the case, maybe we could solve that “conviction in advance” problem this way: “Assaults he committed.  I’m just saying.”</p>
<p><strong> </strong></p>
<p>&nbsp;</p>
<p><strong> </strong></p>
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