• The "Top Ten" represent 45% of the Statewide market.
• The "Top Ten" represent 45% of all retail sales.
• The "Top 20%" gainers include:
  1. North Salt Lake +66.5%
  2. Lehi +65.2%%
  3. Roosevelt +38.4%
  4. Tremonton +36.7 %
  5. Farmington +34.9%
• The "Bottom 10%" include:
  1. Beaver -26.0%
  2. Holladay -20.3%
  3. Centerville -3.2%

Source: Utah State Tax Commission, August 2007

• The "Top 5" Major Sectors represent 50% of the market.
• The "Top 5" gainers include:
  1. Health +38.1%
  2. Amusement & Rec +32.5%
  3. Education +29.5%
  4. Construction +23.5%
  5. Retail - Misc. +21.1%
• Categories with declining sales were led by:
  1. Private Vehicle Sales -16.5%
  2. Business Services -11.1%

Source: Utah State Tax Commission, August 2007

What characterizes successful companies these days?

"A strikingly different, obsessively focused" workforce, one that -- compared to competitors' workforces -- is "downright strange."

To get the best results, companies have to build a workforce "that is extraordinary in a way that customers care about."

Last Week

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

• Games People Play

Question 1: Producing the Result

• What produces this Organizational Outcome number?
• Literally, what makes it go up or down?

• What you are looking to do here is theorize about the things that literally move your Organizational Outcome metrics. This is a brainstorming session about gaming the numbers you chose to represent winning. By gaming, I mean manipulating with the intent to change a specific outcome. Sometimes gaming creates value, and more often gaming destroys value. We are going to find a way to create value, meaning that you will not pursue all of the ideas that you discuss. The goal of this discussion is to think in far-reaching ways about what could move each Organizational Outcome causally, mechanically, and objectively.
• The trick here: You need to let go of what you currently focus on and measure every day. Forgetting your existing approach may be harder than you think. Your minds and then your conversation will want to slip back to what you have been socialized to do ("the way we do things around here"). After a few hours, when you start wanting to wrap up the meeting up and get back to work, you will start formalizing "business as usual" without considering the full range of options. I'm sorry if this happens, because this will be your loss. The point here is not to simply formalize what you are already doing. The point is to deeply examine your current approach relative to the broader set of things you could be doing to game your Organizational Outcomes and add value to your customers in a unique way. You want to create a buffet of possible ways to affect your ultimate success, and then you want to screen the ideas to figure out which ones create long-term value.
• So as a group, try to put your past assumptions about winning on hold for a while by just thinking objectively about your Organizational Outcome numbers and what makes them move. Sometimes it helps to get beyond the norms, illusions, and assumptions of insiders if you take the perspective of an outsider. This tactic can lead you down some dark alleys, but it also can reveal some conclusions that are both radical and rational. You want the meeting to take on a tone that allows people to say things like: "I'm not necessarily saying that we should do this, but if we really want to move that number, the way we could do it would be..."

Civil Engineers

• Let's say your organization is a Stormwater Management Division of a civil engineering firm. Your primary client base consists of municipal clients with dedicated funding set aside to meet federal stormwater regulations. One of your primary Organizational Outcomes is year-over-year growth of business from existing clients. Based on client focus groups and your leadership team's discussion of why clients like your organization enough to issue new contracts, you believe that the most prominent Performance Driver of this outcome is meeting milestones and staying on schedule.
• Now the fun begins because you need to take this concept -- meeting project milestones -- and convert it into a metric and a way of doing business that differentiates you from the competition on this dimension. The most obvious approach, your team decides, is to work closely with clients in the pre- project stage to create a realistic timeline of activities. Then the Performance Driver data can be the number of days after schedule the project teams complete the work. You've already been loosely tracking timetables anyway, and this is a nice chance to formalize the process into usable metrics. You decide to code completion as follows: A "0" means that you hit the target right on time; teams get an extra point for each day a stage is completed early; and teams get docked a point for each day a stage is missed.
• This all seems pretty reasonable until someone on the leadership team says, "I'm not necessarily saying that we should do this...but if we really want to move that 'growth of existing business' number, we might want to focus on making clients believe that we hit the timeline targets, rather than measuring whether we actually hit the targets." He's not joking as some people initially thought. In fact, more discussion of this topic reveals that many times clients do not want work completed early because it throws off their schedules almost as badly as being late. OK, so no extra points for getting it done early. Fair enough. Then someone else says, "But other times, clients themselves build additional services into the project as it evolves, so that the original time table becomes sort of irrelevant." So we get clients to sign change orders when the schedule is renegotiated, and we use the new schedules to calculate the metric. Fair enough?
• It turns out the very best project managers in your firm know how to take scheduling lemons and make them into lemonade by using scheduling issues to deepen the client relationship. What does this mean? It means that when they notice their teams falling behind schedule (bad weather, for instance), they personally call the client and talk about where things stand and how it looks like the timetable may be affected. They almost always are able to work out an agreement that everybody finds acceptable, and the two have a nice discussion about the Hockey Championship and the odds of Carolina taking the cup. In fact, the client is happier because of the call and the update than if the job had been done on time but with no personal update. This is how the best project managers drive future business.
• This communication element of scheduling might actually be a differentiator for your organization. Although it sounds simple to maintain good client communication about project schedules, few engineering firms are willing to do what it takes to deliver on this dimension. The reality is that civil engineers often aren't. The personalities that gravitate toward an engineering career do not naturally lend themselves to maintaining good client rapport and communication. Most engineers by nature are somewhat introverted and tend to overanalyze problems. Introversion diminishes rapport probability while the tendency to overanalyze often leads to missed deadlines. So it would be a strange engineer (that is, a remarkably different breed of engineer) that you would need to hire and socialize in order to really win on this Performance Driver. You need engineers who actually like dealing with clients and who think creating and maintaining rapport and communicating about timelines is an important part of the job.
• From this perspective, "meeting timeline targets" is not the best metric when it comes to gaming "growth of existing business." Maybe the right concept is "perceived responsiveness to scheduling and timetables," as rated by the client at the end of each project. You would need to build a very different mechanism for collecting and tracking this data. Your people would have to act in two very different way to affect these two different measures. Which is more reflective of your unique way of winning?

Question Set 2: Customer Beliefs

• What are the one or 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?

• In most industries, you get to win because your customers say you win. They get to decide. So you need to get a handle on what would make them notice you, say nice things about you to their friends, and hand their money over to you. You may already have most of the answer to this question in your pocket because hopefully this emerged when you converted your story of winning into your Organizational Outcomes (see Chapter 3, "Organizational Outcomes: How Do I Know I Am Winning in the Way I Want to Win?"). The goal here is to formalize just what it is about your organization that customers are supposed to find so attractive and unique that you can count on them coming back for more. Then you need to build an organization around:
  • Managing and gaming those customer perceptions
  • Capturing some "upstream" data about those customer perceptions
• There should be a very small number of very salient attributes that your target customers can lock in their heads about your organization.
• Why do I say one or two most important things? The reason is to get you talking about your most salient features -- or Performance Drivers -- from the customer's perspective. Everything can't be prominent. There should be a very small number of very salient attributes that your target customers can lock in their heads about your organization. Sure, there are lots of "table stakes" that your organization delivers to customers, just like all the competition does. In the civil engineering organization, they need to be seen as credible and proficient engineers just like the competition, but the image of qualified engineers who deliver "good communication" and "timetable responsiveness" is remarkably out of the ordinary -- it could be a differentiator. There are three reasons why it is so important to gather data about your Performance Drivers rather than just talking about them:
  1. Most obvious. Measuring Performance Driver data gives you a way to know if you are executing your unique strategy. It allows you to manage and not just hope.
  2. Less obvious, but just as important. The act of gathering Performance Driver data creates useful ripples throughout your organization. It shouts to employees (and you) what is very, very important. It affects how people think about their work and what identifies a valuable behavior. It makes you structure your organization in a way that maximizes your Organizational Outcomes.
  3. Least obvious. Trying to gather the right (valid) Performance Driver data helps you sharpen and clarify your competitive concepts. You get closer to your customers and gain better understanding of their needs and behaviors. As you translate strategic concepts into numbers that reflect reality, you continually learn more about the data, and you get more fine-grained in your classification of what is a win and what is a loss.

Source: Wharton