Wednesday, January 6, 2016

Run like a business? Really?

We're told to look at the PLCB as a business, as one of the largest alcohol retailers in the world. Well, okay...then let's do that, by comparing the PLCB to one of the largest alcohol retailers in the world: Total Wine & More.

Here's how Total Wine runs their business: Hire people to run your business who already have experience with large retail operations, ideally ones who have actually run businesses larger than you currently are so they can guide you toward growth. Hire people that already fit your business model, not ones you owe a favor to or who "contributed" to your cause. Find executives with experience in the product you sell or the sales model you use. Staff the stores with people that work toward company goals. Make sure there are enough qualified people on duty to cover store hours. Finally, provide a compelling reason for people to go to your stores and not the competition's.

Here's how the PLCB does it: Fill your 'business' with political hacks who have no experience running any business even remotely close to the size of the PLCB, nor any firsthand knowledge of retail or wholesale liquor or wine. Mix with a "we don't care what you want" attitude and staff with people who are almost immune to being fired and get promoted based on time in grade, not product knowledge or performance. Stir in a large amount of "We've always done it this way," toss in a goodly amount of graft and nepotism, and you'll have something that resembles the PLCB.

Drilling down, let's look at the comparative qualifications of the PLCB board chairman and Total Wine's chairman, and see how they stack up.

PLCB Board Chairman Tim Holden
EducationBA Sociology, Bloomsburg University
Work Experience:
  • Probation officer
  • Real estate Broker
  • State Representative
  • U.S. Congressman 
    1. Vice chairman House Agriculture Committee 
    2. Chairman of the committee's Subcommittee on Conservation, Credit, Energy and Research
    3. Member Livestock, Dairy and Poultry subcommittee
    4. Member Transportation and Infrastructure committee.
"Congressman" is a pretty impressive entry on a resume, to be sure, but...Agriculture? Poultry? Transportation? Conservation? Where's the booze, Tim? For that matter, where's the retail? He does have a nice smile, which always helps in retail.

Total Wine & More Board Chairman Adrian Bellamy
  • Bachelor of Commerce, University of South Africa
  • Master of Business Leadership, University of South Africa
Work Experience:
  • Chairman and CEO of Edgars Stores (clothing)
  • Chairman and CEO DFS Group Ltd. (leading luxury retailer)
  • Executive Chairman of The Body Shop International (global personal hygeine retailer)
  • Chairman of Reckitt Benckiser PLC (Major consumer product manufacturer, $13B revenue)
  • Chairman of the Board for Williams-Sonoma Inc. (renowned houseware retailer, $4.5B revenue)
  • Board Member of Action (Netherlands-based value retailer)
  • Board Member River Island (London-based fashion retailer)
  • Previous Board Member
    1. Robert Mondavi Corp (wine)
    2. South African Breweries Ltd (beer)
    3. Starbucks Corp. (coffee; retail)
Nice smile. This is a simply stunning business resume, based solidly in retail and consumer products; experience with the wine and beer industry. Bellamy is clearly a major player in worldwide retail.

Those are pretty close — "congressman," after all — but I have to give the edge to Mr. Bellamy. This isn't a blast against Mr. Holden in particular. He's no more qualified than any of the other PLCB board members of the past 82 years, and just happens to be in that position now as I write this. I could do the same for the other Board Member Michael Negra (who does have significant business and retail experience, if not in booze) in comparison to the rest of the Total Wine Board, but you can follow the links and see for yourself. If this really is one of the top wine and spirits sellers in the world, you would expect it to be run by top management. It simply is not.

We residents have been hearing the lip service about how the PLCB wants to run more like a business. One of the first things you do to move toward that goal is to hire people who know and understand the business you are in, something the State has consistently failed to do. Given the newest PLCB Board member to be nominated, whose qualifications appear to be that he worked for Governor Wolf, gave money to Governor Wolf's campaign, and is a personal buddy to Governor Wolf, that pattern of willful failure will likely continue.

Privatization allows entrepreneurs to use their vision, drive, and work ethic to grow their businesses. Monopoly does not. The choice is simple and has been made by everyone already. Private business is how you buy practically everything else (and it's how you buy wine and spirits as well, apparently, if you live within ten miles of the border). It works, if it didn't, we'd have state-run gas stations, grocery stores, pharmacies, and other retail.

So here's to 2016, may it bring an end to outdated policies from the 1930's. We get closer every time, and as the PLCB supporters themselves admit: we only have to win once. Because we'll never go back.


Anonymous said...

You set up the board chair as a straw man. Typical. Retail operations are run by professionals such as this American.

John Metzger, Executive Director
John Metzger
Executive Director
As executive director, John Metzger is responsible for directing the administrative and business operations of the PLCB and the management of the executive team. He provides leadership and strategic planning recommendations for agency initiatives and is a conduit to the three-member board.

John started his career at the PLCB as the director of the Office of Supply Chain in 2010. John was previously employed at Great Atlantic & Pacific Tea Co. (A&P), most notably working as executive vice president of administration, where he managed IT, Supply and Logistics, Strategic Sourcing and Real Estate/Development. John left A&P in 2007 and developed his own consulting practice, Supply Chain & Technology Transformation. John also served as a visiting professor at Penn State University, Smeal College of Business, supporting the Center for Supply Chain Research. His 36 years of industry experience provides unique perspectives to supply chain and information technology groups regarding business transformation, technology integration, strategies and process/business improvements.

A 1976 graduate of Penn State University, John holds a bachelor’s degree in business logistics. He also holds a master’s degree in business administration from the Crummer Graduate School of Business, Rollins College, Winter Park, Fla., graduating with Beta Gamma Sigma honors and first in his class.

John is active outside of work, having served on the Alumni Board of Directors of the Crummer Graduate School of Business, Advisory Board of Ohio State University’s Business Logistics program and the Executive Committee of the Efficient Foodservice Response industry initiative. He is active in numerous industry organizations including CSCMP, WERC, GMA, FMI and WFLO. In 2004, John was awarded the Robert Pashek Award from Penn State University’s Smeal Business School in recognition of “Outstanding Supply Chain Contributions to Industry.”

He lives with his wife, Peggy, and daughter, Stephanie Hannah, in Doylestown.

Lew Bryson said...

Sorry, you have that wrong. WE didn't "set up the board chair as a straw man," the Governors and the Legislature have been setting up the entire board as straw men (and yeah, MEN; no women, very few people of color), a patronage plum for their campaign donors since this thing began, and we'd remind you that Metzger is the first person to hold this position. Who did they have before? The superbly underqualified Joe Conti; do you really want to go into that?

Metzger is, indeed, one of the best hires they've made. First, why'd it take so long? Second, he's going to be pushing against 5,000 deadweight bureaucrats. And third, the Board is still populated with chumps. The comparison holds: one good hire doesn't change things in an outfit this big and clumsy. The PLCB has a real bad record with hiring good people who then leave in disgust.

Anonymous said...

If you believe a corporate Board of Directors and a State Agency Board are the same thing I cannot argue.

Anonymous said...

If you believe a corporate Board of Directors and a State Agency Board are the same thing I cannot argue. You win!

Lew Bryson said...

If you feel the need to say everything twice, I cannot argue...more than once.

I don't believe it. But the agency, and its supporters, and the Democrats in the Legislature keep telling us that it's a business, so if it is, what purpose does the Board serve? If not that of a board of directors...are they simply patronage pigs?

The fact is, the PLCB is NOT a business. It is a government-imposed monopoly, selling without much regard to profit, more concerned with jobs, patronage, and campaign donations. It needs to be done away with.

Albert Brooks said...

I guess I could post the Curriculum Vitae of the Total Wine Board but that would only prove I know how to cut and paste. Maybe you should post the previous PLCB CEO's credentials so we can see the history of excellence they have. Don't forget to mention the graft and corruption in comparison to the Total Wine Board too.

A board is supposed to guide the business direction of the entity as a whole. The PLCB has guided us to wine kiosks, not knowing who made decisions about TableLeaf, $66 million in cost over runs for computer systems (because they didn't have the expertise to read a contract), rolling out systems before they were fully tested, starting a web portal and then canceling it and starting again. None of those were legislative decisions, they were Board decisions. Need I go on?

Anonymous said...

John Metzger's credentials are irrelevant all because of one fact: he was an A&P executive. A&P started out as a great tea company and later was a great supermarket chain, but for its final few decades of operation (A&P after years of shrinking FINALLY went out of business for good in 2015) A&P was a ridiculous joke of a supermarket chain. It was like the PLCB of grocers. In fact I would compare it more to the supermarket business in the former USSR. The nail in the A&P coffin was their acquisition of Pathmark. That chain was even more of a trainwreck than A&P.

Anonymous said...

What people need to realize is that regardless of Metzger's q1ualifications the Board still calls all the shots and many decisions are subject to political influences. So no matter how qualified you are if you want to keep your job you soon learn how to say "yes sir chairman/board member."

Albert Brooks said...

But A&P has all the traits that the PLCB wants. Ignoring changing consumer tastes, keeping smaller stores when the industry is heading toward larger stores, having multiple names, out of control labor costs, poor selection, decreasing amount of stores and usually more expensive than the competition. Fits the PLCB like a glove.

Anonymous said...

Ironically, the A&P liquor stores (none ever were in PA, of course) are still in business last I checked. Not sure if they are looking for a buyer or not. But the A&P supermarkets are extinct.

Sam Komlenic said...

Let's also not forget that one of A&P's major downfalls was that they were once a union shop and the union helped put them out of business.

Sound familiar?

Anonymous said...

Hey, for any of you who might know, I have a question. I went to a state store the other night looking for a particular item (let's just leave it at that) and the store sales floor was out of it. I asked an employee to check the back for it. She reported they were completely out of it. One aisle of the store was out of several items but I assume the store at least had most of them in the back. So I asked an employee "why is this aisle so empty"? She said "this is a very busy store".

Is "this is a very busy store" a valid excuse? I don't work in a retail setting and I never have, so I really don't know. Sure, they probably could have done a better job restocking, but is it likely the store was so busy (every day) that they really could not restock fast enough?

Albert Brooks said...

Is it a valid excuse? Not in retail. Every state store has had at least one shipment this year to restock from the holidays. Now the majority of ordering is controlled by Harrisburg based on sales although the store manager can modify the totals somewhat. If there are aisles with large amounts of empty space it can only be because:
A: The items in that aisle were on sale with a coupon creating more than normal demand (although the whizzes in Harrisburg should have known that) and the stock truck doesn't come in until Monday or-
B: Typically poor management of product by the PLCB or -
C: Typically poor management of personnel by the store management.

With the bailment system in place any shortages in the warehouse costs the supplier of that product extra in fines for being short so that probably didn't happen unless the flooding in the Midwest was somehow involved.

The only way to know for sure would be to check those products in other stores to see what their stock is and then you would be able to narrow down whom was most at fault for not stocking the items in the store you were in.

Anonymous said...

So would she have a valid excuse if it were the holiday season? (and I don't mean the night before a holiday, but let's just look at November/December as a whole)

I don't think the PLCB runs coupons for 1.5 liter dry red wines (it seemed that most wines in that category were depleted at the store in question). There also were at least two brands of 1.5 liter whites that needed to be restocked.

Albert Brooks said...

No, as I said in the first line there is no really valid excuse in retail beyond Acts of God and that is even more so in a centralized control system. Chalk it up to normal PLCB, i.e. bad, management of inventory or people or both.