How Does Your City Compare? (and the 10 best quotes on data)
“The goal is to turn data into information, and information into insight.” Carly Fiorina, former Hewlett Packard CEO. Cities are notorious navel gazers. They build budgets based on last year’s budget and measure achievement based on improvements, or not, from last year’s performance. While a runner can measure improvement based on if he runs faster than yesterday or last year, he will only know if he is fast if he compares himself with others.
In our cities, determining whether incremental improvement or a change in business model is needed is best determined by comparing the performance of our cities against similar cities. “He uses statistics as a drunken man uses lamp posts – for support rather than for illumination.” Andrew Lang, Scottish writer.
Businesses constantly study the competition to determine how to improve operations, increase market share and find other advantages. Cities don’t have competition, per se, but have an even better reason for comparing themselves against similar cities. Cities collaborate instead of compete. Comparative data helps cities create benchmarks, and through collaboration and sharing of information, cities can learn how a better performing city functions and can apply this information to their operations. “The price of light is less than the cost of darkness.” Arthur C. Nielsen, statistician.
Business verses Cities – Advantage Cities (But Only if You Measure)
In an era where government leaders are often told to run their organizations more like businesses, comparative analysis is one place where cities can outperform businesses at a fraction of the cost. Businesses often spend a tremendous amount of money researching their competition. They hope to find ways to improve their products and/or services, communicate better, run more efficiently and create and implement new technologies, among other things.
Cities can benefit from many of the same things, such as improving service delivery and financial performance. Cities can also use comparative analysis to improve labor relations and economic development efforts. Because cities are public agencies, data can be gathered at a fraction of the cost of the private sector. Additionally, high performing cities will typically share how they operate with employees from other cities. Competitive advantage – cities!
What to Measure
The most critical part of establishing performance measures is determining what to measure. The great business thinker W. Edwards Deming said “you can’t manage what you don’t measure.” Although true, technology has made it easy measure everything. Measuring is not the same as managing. While cities can comparatively measure thousands of data points (how much is charged for swimming lessons, how many years the average K-9 works), keep data high level. Decide what is the most useful, actionable data for your city today. You can always take a deeper dive into the data when issues are identified.
Demographic information should be used to determine how well cities compare. Look for similarities in population, income, households, affordability and education levels as well as characteristics such as land area and service level to narrow down benchmark cities.
Business information is important because it provides data on the economic drivers in the community. Understanding how cities compare in areas such as retail sales, manufacturing, health related industries and wholesale performance can suggest opportunities for economic improvement and help determine which cities are ideal for a comparative analysis.
Financial data such as budget information, revenue, expenses, debt, pension obligations and other categories can provide real insight into a city’s operations. Comparisons in these areas show where a city performs well, or where specific improvements should be targeted.
Additional data such as tax rates, fees charged, infrastructure and city services can be useful points of comparison. Understanding how many acres of parks or the number of fire stations in comparison cities links financial data to the community services provided.
“If we have data, let’s look at data. If all we have are opinions, let’s go with mine.” – Jim Barksdale, American executive.
Choosing Benchmark Cities
Benchmark cities are those cities chosen for the comparison. There are three different ways to look at, and choose, benchmark cities. Choosing cities whose demographics and characteristics are similar to your city is best for determining “where you are in the pack.” These cities are similar enough that insight about how they operate in high performing areas may be particularly applicable to your city.
Choosing “aspirational” benchmark cities can also be useful. These cities may have characteristics such as high property values or well developed business sectors, and they can provide useful data to show you how to move in that direction. It is important to remember, however, that underlying characteristics are difficult to change, and this type of change takes long-term sustained effort, as opposed to the types of operational changes you might see with more similar benchmark cities.
Finally, some city leaders like to compare themselves with nearby cities. If neighboring cities are very different in size, it helps to look at per capita financial data so that it is a more “apples to apples” comparison. Finally, it is extremely important to measure a city against cities with similar geopolitical obligations. Cities in California will likely want to measure themselves against other California cities since financial and regulatory obligations differ widely from other states.
Taking the Next Step
Data is not the same as information. Once the raw data is gathered it needs to be analyzed and put into a format that is useful. Context is important; the stories behind data variations, and having the knowledge to tell these stories, are critical so that data is understood and doesn’t get misused. The data must be compiled into a report or presentation that is easy to read and understand (think visuals such as charts and infographics), and that highlights the areas of greatest alignment and greatest divergence.
Areas where there are potential improvements should be identified at this time. Determining the who and the how of communicating a comparative city analysis is critically important. “Data are just summaries of thousands of stories – tell a few of those stories to help make the data meaningful.” Chip & Dan Heath, Authors of Made to Stick, Switch.
Turning Measurement into Results
Once the appropriate leaders at a city have the results of a comparative analysis, it is time to take the next step. Prioritize the areas of opportunity and start to learn why another city performs better. This can start with a phone call or an email, and may develop into a staff visit to another city to learn what works.
If a city wants to implement operational changes to improve performance, make sure this is documented and initial data is used as a baseline. First find the facts in the data analysis and then determine why one city outperforms others. This will give you the information to make meaningful change. “I never guess. It is a capital mistake to theorize before one has data. Insensibly one begins to twist facts to suit theories, instead of theories to suit facts.” Sir Arthur Conan Doyle, Author of Sherlock Holmes stories.
Measure Improvement AND Competition
To determine whether operational improvements are successful, cities should compare any improvement in performance with two different sets of data. Does the city improve against itself year-on-year, and does the city improve in comparison with the benchmark city or cities? While improvement is positive, the rate of change against comparison cities is just as important. An example is if a city wants to increase retail sales and implements a program to do so that results in a five percent increase in retail sales over three years. While this is clearly an improvement, if a comparison city has increased their retail sales over the same period by 15%, then further investigation is needed. Perhaps the increase only met the national increase in retail sales and a change in focus is needed. The data will tell you what is going on and what you need to do. “A point of view can be a dangerous luxury when substituted for insight and understanding.” Marshall McLuhan, Canadian communications professor.
Build a “Friendly Competition Coalition”
If there are several cities that make good comparison cities, work with them long term. Each city may excel in certain areas and have others areas that need improvement. The great advantage of cities over businesses is that cities aren’t truly competing except in a few instances (tourism or perhaps with an economic development prospect). Cities have the great advantage of being able to help each other improve. With all the clamoring for better government, this is a real
opportunity to build long term relationships with cities who are the ultimate in “friendly competition.”
Get Started
“Facts do not cease to exist because they are ignored.” Aldous Huxley, English writer. Gather important data and use that information to make better decisions. Whether you have staff gather the data, hire a consultant or use a tool such as the City Hall Solutions Comparative City Analysis, get started. Remember, in the words of W. Edwards Deming “without data, you’re just another person with an opinion.”
