Archive for February, 2012

I’m currently working with a client to help them rethink their business with an eye towards improving their Net Promoter Score (NPS). NPS is a fairly well known mechanism for measuring the health of a customer relationship. It’s based on asking one question: “Would you recommend the company / product to a friend or colleague?” Answers are given on a 0 to 10 scale and the NPS is calculated by subtracting the percentage of detractors (scores from 0-6) from the percentage of promoters (scores from 9-10). Depending on the industry, a decent score is 40.

Typically, companies ask detractors to explain their problem and then ask whether someone can follow-up in person. The best companies have managers follow up and take care of the customer immediately but more importantly help find ways for the problem to not happen again.

It turns out that employees in companies with high NPS scores like Apple, Jet Blue, Progressive Insurance and Enterprise Rent-a-Car are also happy with their jobs. Employees like being able to consistently satisfy customers.

The book that best explains NPS is The Ultimate Question 2.0 by Fred Reichheld and Rob Markey (Markey is a classmate of mine). The web site is netpromoter.com.

What if Trenton had such a program?

“On a scale of 0-10, would you recommend Trenton as a place to live to your friends and family?” This could be “The Ultimate Question – Trenton Edition.”

What if we religiously asked residents this question? What if we followed up? We could set up an email survey to ask the question or even better use our robocall system to do the asking.

In part one of my Trenton Plan, I recommended measuring four numbers: Ratables, Population, Crime Index and Graduation rate. Those are good things but to be really great we need to ask the ultimate question, “Would you recommend that a friend or relative live here?”

My free consulting advice for our next Mayor is to do exactly this. When you hire your aides, hire them into a small group that does nothing but call back residents about their problems, look for ways to solve them immediately and then craft ideas of how to solve the problems permanently. Additionally, your senior staff and you yourself should make some portion of these calls as part of your daily routine.

Citizen feedback and administration responses could be put onto the web site as a way to maintain transparency and re-enforce the point that we’re trying hard to deal with problems.

The next administration should use Net Promoter Score as a way of evaluating all departments and personnel. Create a bonus pool with city council’s blessing to reward employees based on NPS for the city. As you get more sophisticated, tie all work orders and emergency responses to how they served individual residents and business owners. Be able to link the work of the city back to individual NPS results in order to eventually give each employee an NPS score.

We might not even need to link bonus to NPS. The best companies don’t. A source of pride for Trenton employees (and I’d like to see this extended to schools) would be to achieve high levels of citizen satisfaction. Can you imagine how good it would feel to know that because of your efforts, citizens were giving the city scores of 9 or 10?

In short order we could turn into a city that strives to have citizen’s recommend it. This kind of attention to customer satisfaction could certainly be the silver bullet that revitalizes Trenton. Soon, everything our administration does could be oriented towards citizen priorities. Our budgets and policies would finely be in tune with the public.

This doesn’t solve our budget problem immediately and we won’t magically fix our crime issue. But by aggressively listening to citizens and solving their most important problems we slowly begin to repair our broken image.

It is a truism that, “if you don’t know where you’re going, you’ll never get there.”

And so it is with Trenton. We don’t know where we’re going, and so far, it’s pretty clear we haven’t gotten anywhere good.

Ask five Trentonians what their goals for the city are and you’ll likely get five different answers. Try asking 7 city council members. Or, try getting an answer from our Mayor at all.

Leadership is painting a vision and lacing it with measurable goals.

To miss-quote John F. Kennedy – “We choose to go to somewhere in space in the future”. Not much of a call to action is it.

As a community we don’t have a common set of goals that represent our vision and drive our mission to revitalize the city. We need that. We need our leaders to be thoughtful about how our policies and our budget are used to achieve goals. We can’t do everything, so being clear on the things we must do is job #1.

It’s hard set measurable goals

Goals are meaningless if you can’t recognize when they’re accomplished. Too many people forget this. A goal doesn’t help if you can’t measure achievement, or the progress towards achievement.

Every meaningful Goal has an outcome, and the challenge to writing meaningful goals is drafting a clear, precise, and measurable outcome.

To oversimplify, which goal stated below is meaningful?

• To keep the citizens of the City safe from fire.
• To keep citizens safe from fire by maintaining first engine response time to less than 3 minutes.

Note that meaningful Goals often describe an action or activity [although not always], but they always describe outcomes that are clear, precise, and measurable.

Think about measurement. How would I measure this? Can I accurately count the number of times something happens? Will I know when something happens? Can the administration cook the books?

These are all questions we need to ask ourselves.

Broad health goals set the agenda

For Trenton we have four basic concerns: We want our city to be safe from crime, for our children to be educated, for the city to be a pleasant place and for our government to be affordable. These concerns are not only interrelated but spill-over into every other part of life in the city.

Bad school environments breed crime, which makes us feel unsafe. When we feel unsafe we want to hire more police, which costs money we don’t have. However, if we don’t reduce crime we’ll not attract the new investment that would help us pay for a police force and a good school system.

Four broad goals can serve to focus us and our government policy on these concerns.

Ratables: Goal is $2.1B. in 4 years

That’s a 10% increase over the current $1.9B. Source: City tax rolls.

Ratables are what drive property taxes. In Trenton our property tax pays for 15% or our total municipal and school budget. The average for New Jersey is 50%. The State of New Jersey is under increasing pressure to decrease its funding to Trenton and we’ll need to make up the difference. However, to be a great city, we need to have a tax base that does more than maintain minimum services as we’re doing now.

Today the State of New Jersey funds $285M of Trenton’s school and municipal budget. If State property were taxed like private property, it would pay only $45M. Clearly we exposed to tightening budgets at the state level.

Ratables are measured in Trenton by the tax assessor and the tax roll is maintained by Trenton’s tax office. While property assessment is generally a well disciplined art, Trenton will need to update its processes and regularity for property value assessment.

Population: Goal is 90,000 people in 4 years

That’s up from 84,913 in 2010. Source: US Census – ACS

Growth in population shows that our city is appealing to outsiders. If we’re attracting people we’ve been successful in making the city livable for existing residents but we’re more attractive to businesses as well.

Population in Trenton is measured by the US Census bureau with a hard count every 10 years and an accurate estimate every year via the American Communities Survey.

Crime Index: Goal is a 20% decrease in one year, 40% in four years.

That’s from 3851 crimes in 2010. Source: Uniform Crime Report

The Uniform Crime report and FBI Crime Index report crime in a standard way and is a widely used statistic for assessing a community’s safety.

Graduation Rate: Goal is 90% graduation rate in 4 years

That’s up from the rate of 78%. Source: NJ DOE

Educators will argue over the use of this statistic but then fail to provide an alternative single measure for the health of a school system. A school system’s overall graduation rate, while not a perfect measure, is a good indicator of success and has the virtue of being well understood by the public. Furthermore, graduation from high school is a solid predictor of a student’s future success in life.

I hope that by publishing these four goals and our current state of affairs. We, as a community can begin to discuss them honestly. Perhaps we’ll change the targets up or down a bit, but in the end we need goals on which we can agree.

Our city council recently agreed to give the money-losing Trenton Marriott another $500,000 to satisfy the demands of the very management company that made it money-losing in the first place.

This begs the question of whether this is the best way we could invest that kind of money.

We could pay for 5 police officers, but that would be for just one year and then we’d have to lay them off in 2013. A better idea is to make investments in our tax base and quality of life that will be permanent and predictable.

With $500,000 we could stimulate investment in 50 new homes for 50 new families in Trenton.

Our fundamental problem (and all but the lunatic fringe agree) is that we don’t have enough people with disposable income living in Trenton. For now and to make the math easy, I’ll define that as people who can afford a home that costs $200,000 or more.
A home like that yields approximately $4,400 city revenue given our current tax rate and the 60% discount on home value our tax office builds in to the appraisal.

What if we give $10,000 grants towards anyone who will buy a new $200,000 home in Trenton. Given our tax rate this would yield a 79% rate of return over 10 years and would be paid back in just over two years.

For $500K we could make 50 grants to 50 new Trentonians that will help the rest of us pay for our city government going forward. Those 50 homes would generate $220,000 a year in revenue to the city or $1,720,000 over 10 years.

This plan recognizes an inescapable fact that much of our property in Trenton now has negative value. That’s right, we’d have to pay someone to take it off our hands. Free isn’t good enough. This happens all the time around toxic waste dumps. High murder rates aren’t much different.

The good news is that by simply building on a lot and living there, the land value is increased. We create value by stimulating development of new neighborhoods populated with people who won’t stand for crime. The criminal element hates houses with people and lights.