• The "Top Ten" represent 45% of the Statewide market.
• The "Top Twenty-Five" represent 2/3rds of all retail sales.
• The "Top 20%" gainers include:
  1. Lehi +63.8%%
  2. Draper +31.2% (IKEA opened May 23rd!!)
  3. Midvale +29.6%
  4. South Jordan +26.4
  5. Vernal +17.6%
• The "Bottom 10%" include:
  1. Taylorsville - 1.2%
  2. West Jordan -0.7%

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Rank	City	April 2007 (000)	% Change 07/06	Mkt Share April 07 (% of State Total)
1	Salt Lake City	$378,285	+10.0%	11.3%
2	West Valley	$149,580	+16.7%	4.5%
3	Orem	$146,724	+11.0 %	4.4%
4	Sandy	$145,618	+3. 9%	4.3%
5	St George	$134,472	+3.0%	4.0%
6	Murray	$132,952	+9.0%	4.0%
7	South Salt Lake	$120,662	+8.9%	3.6%
8	Layton	$96,920	+11.9%	2.9%
9	Ogden	$96,572	+11.9%	2.9%
10	West Jordan	$94,049	-0.7%	2.8%
11	Provo	$90,705	+14.8 %	2.7%
12	Logan	$51,828	+6.4 %	1.5%
13	Riverdale	$50,757	+3.6%	1.5%
14	Draper	$49,218	+31. 2%	1.5%
15	American Fork	$49,034	+10.9%	1.5%
16	Midvale	$44,125	+ 29.6%	1.3%
17	Vernal	$42,550	+17. 6%	1.3%
18	South Jordan	$39,913	+24.4%	1.2%
19	Cedar City	$39,495	+6.6%	1.2%
20	Lindon	$35,597	+14.3 %	1.1%
21	Taylorsville	$35,30 6	-1.2%	1.1%
22	Lehi	$33,319	+63.8 %	1.0%
23	Bountiful	$29,927	+6 .5%	0.9%
24	Tooele	$27,823	+8.2%	0.8%
25	Cottonwood Heights	$27,817	+4.4%	0.8%

The "Top 5" Major Sectors represent 50% of the market.

• The "Top 5" gainers include:
  1. Construction +67.4%
  2. Public Admin +28.6%
  3. Manufacturing +26.6%
  4. Fin, Ins, & Real Estate +24.7%
  5. Retail - Misc. +22.9%
• Categories with declining sales were led by:
  1. Electric & Gas -19.9%
  2. Occasional Sales -4.4%
  3. Apparel & Acc -3.3%
  4. Transportation -1.5%
  5. Food Stores -1.4%

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Source: Utah State Tax Commission, June 2007

Performance Drivers: What Must Customers Notice About Us So That We Win?

• Performance Drivers are what cause your Organizational Outcomes to move; they specify what customers need to notice and think about your organization in order to make them choose you over your competition. You should literally build your organization around measuring and gaming your Performance Drivers, which results in a strange workforce. Developing, measuring, and enacting your Performance Drivers will not be easy (fortunately!), but it will give you incredible insight into what your organization is creating and not creating in order to differentiate you, attract customers, and win. It will bring discipline to the words and ideas that are your strategy, and you will be able to track and manage the extent to which your strategy is being enacted. You know you want this; the only question is how hard are you willing to work to get it?

  Games People Play

• As the Dean of a business school, you decide that the best reflection of winning is BusinessWeek's rankings. These are prominent reputation scores created by a third party that directly pits business schools against each other every two years. Essentially all MBA applicants know about the BusinessWeek rankings, and the smartest MBA applicants with highest motivation try to go to the best- ranked schools. If you attract really smart, motivated people to your school and simply don't mess them up too bad, there is a very good chance they will go out and succeed in their careers. And then guess where they will want to hire their future MBAs? In fact, loyalty aside, most successful companies want to recruit MBA students from schools with the best public reputations. And who can command the highest salaries and the best jobs from these great companies? You've got it: MBAs graduating from the top-ranked programs. These virtuous cycles are why you picked BusinessWeek's rankings as your primary Organizational Outcome.
• Do you want to know what your Performance Drivers are? Then you need to call BusinessWeek. Because once you selected these particular rankings as the evidence that will let you know that you are winning, the only way to learn your Performance Drivers is to figure out how BusinesWeek creates the rankings. So you call up BusinessWeek and learn the formula. Forty-five percent of the ranking is based on what your MBAs say about your school after they have been in the program a year. Forty-five percent of the ranking is based on what the companies that hire your MBA students say about your school. That leaves 10% -- what is that extra 10%? That's just a little remainder, hardly worth thinking about too much, but that is your school's "Intellectual Capital." But Intellectual Capital sounds sort of important for a university, right? How is that measured? There is a list of 18 business publications that are considered important by BusinessWeek, and each time one of your faculty members publishes a paper in one of those, your school gets a point.
• So now that you know the determinants of winning, how do you want to go about gaming these Performance Drivers? One thing is sure: You have little need to worry about the intellectual contribution of your professors. Even though intellectual contribution and academic publishing is the coin of the academic market, and it's what most of your workforce currently is chasing, it just doesn't move the needle. If you are going to try to tweak performance through intellectual contribution, you should steer faculty toward those 18 journals.
• To really affect your Organizational Outcome, you need to make students and recruiters really happy with your school. The question is what you are willing and able to do to satisfy these customers that other business schools are not? For student satisfaction, you might achieve good scores through compelling teaching, but all your competitors are doing this too. Could you differentiate by building a strange workforce that truly pushes the MBA teaching envelope? Hire professors who skip the research since it's not important to winning anyway, and instead use their time networking with industry leaders who they can bring into the classroom? Maybe you could hire professors who really show students the love by inviting them over to their houses for picnics and volleyball, or meeting them out at the bars. This workforce might just be strange enough that other schools wouldn't imitate it and MBA students would view it as remarkable, giving you the highest marks on the BusinessWeek survey.
• What about the recruiter evaluations of your MBA program? How can you drive those numbers? You could produce well-trained grads who have the basics down cold and are confident but not pushy. Sounds just like what the competition is trying to do -- good luck displacing schools ranked better than you with six times your endowment. What could you do that would be strangely and noticeably valuable? What if you got your faculty members to wine and dine company recruiters when they come in for interviewing? On one hand, it's blatant gaming because you're just creating interpersonal goodwill so that recruiters rate your school higher when they get surveyed by BusinessWeek. On the other hand, professors might just learn what recruiters are looking for in MBA students that they aren't currently getting and then build this into their classes. For example, recruiters want more statistics and analytic ability from MBAs, and professors could add cases with datasets and make students run regressions and interpret output. Professors could make the cases and the classes compelling to MBAs by saying, "This is what Goldman Sachs told me they are looking for in job applicants." This could differentiate your school, and it would game your two most important metrics simultaneously. Sure, lots of professors wouldn't like the idea of using their personal time wining and dining recruiters; they might say that's not why they got a Ph.D. But what if you located and hired a strange breed of professor who liked hobnobbing with recruiters and building what they learned from recruiters into their classes?
• In developing this example, I'm not actually suggesting that BusinessWeek rankings provide a valid reflection of business school success. For example, what would happen if BusinessWeek suddenly increased the weight on intellectual contribution for ranking schools? What if BusinessWeek loses relevance in ten years because the world really thinks universities should be judged by their intellectual contribution? Then your school could be in trouble because you built a strange schmoozing-type organization that was not equipped to contribute in intellectual ways. Listen, choosing a strategy is risky (it better be!), and my point here is not to suggest good versus bad strategies.
• My point here is that if you want to know what your organization's Performance Drivers are, you need to first identity Organizational Outcome metrics that provide a valid reflection of what you think your organization exists to create. Then, literally find a way to make these metrics move in a way that your competitors are not willing or able to pursue. That's why we started with making sure your Organizational Outcomes were strategic and reflected what winning truly means to you. Once you choose Organizational Outcomes and begin to take them seriously, they will affect everything you do as an organization. They will affect what seems reasonable and what seems valuable. In the MBA school example, if you as Dean had chosen a slightly different metric -- say the U.S. News and World Report's rankings -- you would be placing your emphasis on MBA admissions because entering-class GMAT scores drive this metric, but student and recruiter opinions are not included in these rankings. Organizational Outcomes help expose and pinpoint your Performance Drivers. By building an organization around gaming and measuring your Performance Drivers, you can build a strange, noticeable organization.
• So here is what you need to do to figure out your own organization's Performance Drivers:
  • Hold your Organizational Outcomes meeting, described in the last chapter. You and your top leadership team distill your strategy into three to four antagonistic metrics that let you know that you are winning in the way you want to win. Remember, each of your Organizational Outcomes must be a metric -- actual numbers that you collect and store in a spreadsheet.
  • Soon after your Organizational Outcomes event, hold another meeting with the same group. This second meeting, or series of meetings, is going to be at least as long as the first one, probably much longer. The timing of this second meeting is important but difficult. You want to meet as soon as possible after the first one so that people still remember the Organizational Outcomes conversations and there is some momentum left. On the other hand, the second meeting can't be so soon that people are burnt out and frustrated and feel the need to "get back to their real work." They need to believe that this is their real work. These discussions and decisions will determine whether or not your organization wins over the next three years and whether it is still alive in ten.
    • For each of the Organizational Outcomes that you have developed, build consensus about three sets of questions:
    • What produces this Organizational Outcome number? Literally, what makes it go up or down?
    • What are the two most important things our customers have to believe about us relative to our competition in order to affect this Organizational Outcome? How do we measure our progress toward creating these beliefs in our customers' heads?
    • How can we influence this Organizational Outcome in a way that is valuable, rare, and hard to imitate? What are we willing and able to do that the competition is not in order to drive this Organization Outcome?
  • Let's dig deeper into these questions so that you know what you are looking for when you meet again as a leadership team.

:: bobspring@bonnevilleresearch.com