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Dec. 17, 2013 UTAH Legislative Policy Summit UTAH TODAY: Favorably Positioned TOMORROW: Utah is Changing LONG-TERM: Decisions Matter UNIVERSIT Y OF UTAH I DAVID ECCLES SCHOOL OF BUSINESS

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Page 1: D av iD e ccles s chool of BUsiness i University of Utah Four ...le.utah.gov/interim/2013/pdf/00004435.pdf75.7 n— U.S. — Salt Lake City — Salt Lake County State of Utah — Cumulative

Long-Term Strategic Planning:

Smart, long-term strategic planning

starts with a proper understanding of

the power of effective group decision

making. Groups can generate the very

best, but also the very worst decisions.

By recognizing the advantages and

challenges associated with group

thinking, better decisions can be

made. Using the same leadership

team, the Kennedy administration

had a horrific outcome (Bay of Pigs)

and a stellar outcome (Cuban missile

crisis). These examples serve as

instructive lessons in effective group

decision making and the principle

of unintended consequences.

U n i v e r s i t y o f U t a h i D a v i D e c c l e s s c h o o l o f B U s i n e s s

“Things which matter most must never be at

the mercy of things which matter least.”

— Goethe —

Four-Step Group Decision Making Process

Decisions Matter

Source: Cicero Group

Source: Cicero Group

Source: Cicero Group

Pillars of an Efficacious Strategy

1Ask the right

questions

4Define. Measure.

Execute. Recalibrate.

2Demand

accurate data

5Allocate the

right resources

3Prioritize and

play to strengths

6Keep your focus on the

long-term priorities

Group Decision Making: Positive or NegativeGroups can generate the very best, but also the very worst outcomes.

Positive

negative

individual individual Deliberation Group Deliberation

Out

com

es

Unintended consequences: The unexpected result of an action. Too often, a sincere motive or program results in unintended consequences

that far outweigh the intended benefits. Dec. 17, 2013

UTAHLegislative Policy Summit

U T A H T o d A y :

Favorably Positioned

T o m o r r o w :

Utah is Changing

L o n g - T e r m :

Decisions Matter

U n i v e r s i t y o f U t a h i D a v i D e c c l e s s c h o o l o f B U s i n e s s

Focus on topics and

questions that matter most

Gather accurate

information

Generate broad set of possible

solutions (divergent phase)

Pick the best

solution (convergent phase)

1 2 3 4

Page 2: D av iD e ccles s chool of BUsiness i University of Utah Four ...le.utah.gov/interim/2013/pdf/00004435.pdf75.7 n— U.S. — Salt Lake City — Salt Lake County State of Utah — Cumulative

Utah Today: Favorably Positioned Utah Tomorrow: ChangingUtah currently ranks among the top five states in job creation. Unemployment remains substantially below the national average and every major private sector industry is growing. Once constrained by geographic isolation, Utah is now deeply connected to the world via technology, an international airport, superb transit system and modern freeways. The state’s economic fundamentals are strong, and Utah is favorably positioned for economic success.

U n i v e r s i t y o f U t a h i D a v i D e c c l e s s c h o o l o f B U s i n e s s U n i v e r s i t y o f U t a h i D a v i D e c c l e s s c h o o l o f B U s i n e s s

2

“I know of no more encouraging fact than the unquestionable ability of

mankind to elevate his life by conscious endeavor.”

— thoreaU —

MissouriNorth Carolina

IllionisUtah

GeorgiaPennsylvania

KansasNebraska

ArizonaMinnesota

0.9810.977

0.9770.9760.976

0.9760.972

0.9700.968

0.964

Source: Department of Workforce Services

index of specialization/hachman index

Ingredients for Success Key Trends

Economic BalanceTen Most Economically Diverse States: 2011

3 5 Utah U.s.

Highest fertility rate (2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.38 1.89Youngest median age . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29.9 37.4Percent under 18 (Utah ranks 1st) . . . . . . . . . . . . . . . . . . . . . . . 32.1% 23.9%Percent 65 and older (Utah ranks 50th) . . . . . . . . . . . . . . . . . . .9.5% 13.7%Largest household size . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.14 2.64Rapidly growing (%ch. 2000–2010; Utah ranks 3rd) . . . . . . . 23.8% 9.7%Life expectancy (Utah ranks 10th)(2010) . . . . . . . . . . . . . . . . . . 80.2 78.9

Source: World Trade Center Utah

Equality of IncomeFive States with Greatest Amount of Income Equality

4

Source: U.S. Census Bureau, 2010 American Community Survey

2010 Gini coefficient

Young, Healthy & GrowingUtah Demographic Profile: 2012

Global EngagementUtah is Global

ChallengesUrban-rural Dynamic, Discouraged Workers

Merchandise exports, in billions

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

$3.2 $3.5$4.5

$4.1$4.7

$6.1$6.8

$7.8

$10.3 $10.3

$13.8

$19.0$19.3

More than doubling in five years

Fiscal FitnessFiscal ResponsibilityChecklist

1o Balanced budget

o AAA credit

o Appropriation limitation

o Line item veto

o Rainy day fund

o 2-year fiscal note process

Sources: National Vital Statistics Reports; U.S. Census Bureau; The Henry J. Kaiser Family Foundation

UtahAlaska

WyomingNew Hampshire

Iowa

0.419

0.4230.425

0.427

0.422

U.S. average = 0.469

Utah PopulationProjected to More than Double by 2060

Utah School Age PopulationProjected Growth to Slow in the Short Run

U.S. and Utah Dependency RatiosAging Baby Boomer Drive Increases in Total

Minority Share of the PopulationU.S., Utah, Salt Lake City, Salt Lake County

Utah is in the midst of an unprecedented economic, demographic, and cultural transformation that has its origins in national and international trends. Into the future, the state will certainly maintain many of its signature demographics: a relatively young and rapidly growing population with larger household sizes as compared to the nation. But, the cumulative impact of these trends is that Utah will continue to become much more diverse in age, culture, language, nativity, race, ethnicity, religion, and socioeconomics. Cumulatively, these trends have far-reaching implications for Utah's future and require effective reengineering of a broad spectrum of investments in human capital and the built environment.

60%

50%

40%

30%

20%

10%

01900 1920 1940 1960 1980 2000 2020 2040

900,000

850,000

800,000

750,000

700,000

650,000

600,000

550,000

500,000

450,000

2000 2010 2020 2030

81.6

61.968.5

61.568.2

58.9

70.062.4

71.7 73.1 72.9 74.078.2 74.4

80.475.7

nU.S.— Salt Lake City— Salt Lake County— State of Utah

— Cumulative births, 5-17 Years Prior

— School-Age polulation (nLow/High)

UtahnRetirement AgenYouth

U.s.nRetirement AgenYouth

Source: Governor’s Office of Management and Budget, 2012 Projections.

Source: BEBR Analysis of Governor’s Office of Management and Budget, 2012 Projections and historical birth data . Note: If there are no deaths and no in or out migration, the school age population will be the total births that occurred 5 through 17 years ago.

Sources: Bureau of the Census, Gibson and Jung (2002), Perlich (2002), BEBR

Source: BEBR analysis of Governor’s Office of Management and Budget, 2012 Projections

“The future is not a gift. The future is an achievement.” — r. f. KenneDy —

Non working age per 100 working age

Page 3: D av iD e ccles s chool of BUsiness i University of Utah Four ...le.utah.gov/interim/2013/pdf/00004435.pdf75.7 n— U.S. — Salt Lake City — Salt Lake County State of Utah — Cumulative

Utah Today: Favorably Positioned Utah Tomorrow: ChangingUtah currently ranks among the top five states in job creation. Unemployment remains substantially below the national average and every major private sector industry is growing. Once constrained by geographic isolation, Utah is now deeply connected to the world via technology, an international airport, superb transit system and modern freeways. The state’s economic fundamentals are strong, and Utah is favorably positioned for economic success.

U n i v e r s i t y o f U t a h i D a v i D e c c l e s s c h o o l o f B U s i n e s s U n i v e r s i t y o f U t a h i D a v i D e c c l e s s c h o o l o f B U s i n e s s

2

“I know of no more encouraging fact than the unquestionable ability of

mankind to elevate his life by conscious endeavor.”

— thoreaU —

MissouriNorth Carolina

IllionisUtah

GeorgiaPennsylvania

KansasNebraska

ArizonaMinnesota

0.9810.977

0.9770.9760.976

0.9760.972

0.9700.968

0.964

Source: Department of Workforce Services

index of specialization/hachman index

Ingredients for Success Key Trends

Economic BalanceTen Most Economically Diverse States: 2011

3 5 Utah U.s.

Highest fertility rate (2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.38 1.89Youngest median age . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29.9 37.4Percent under 18 (Utah ranks 1st) . . . . . . . . . . . . . . . . . . . . . . . 32.1% 23.9%Percent 65 and older (Utah ranks 50th) . . . . . . . . . . . . . . . . . . .9.5% 13.7%Largest household size . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.14 2.64Rapidly growing (%ch. 2000–2010; Utah ranks 3rd) . . . . . . . 23.8% 9.7%Life expectancy (Utah ranks 10th)(2010) . . . . . . . . . . . . . . . . . . 80.2 78.9

Source: World Trade Center Utah

Equality of IncomeFive States with Greatest Amount of Income Equality

4

Source: U.S. Census Bureau, 2010 American Community Survey

2010 Gini coefficient

Young, Healthy & GrowingUtah Demographic Profile: 2012

Global EngagementUtah is Global

ChallengesUrban-rural Dynamic, Discouraged Workers

Merchandise exports, in billions

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

$3.2 $3.5$4.5

$4.1$4.7

$6.1$6.8

$7.8

$10.3 $10.3

$13.8

$19.0$19.3

More than doubling in five years

Fiscal FitnessFiscal ResponsibilityChecklist

1o Balanced budget

o AAA credit

o Appropriation limitation

o Line item veto

o Rainy day fund

o 2-year fiscal note process

Sources: National Vital Statistics Reports; U.S. Census Bureau; The Henry J. Kaiser Family Foundation

UtahAlaska

WyomingNew Hampshire

Iowa

0.419

0.4230.425

0.427

0.422

U.S. average = 0.469

Utah PopulationProjected to More than Double by 2060

Utah School Age PopulationProjected Growth to Slow in the Short Run

U.S. and Utah Dependency RatiosAging Baby Boomer Drive Increases in Total

Minority Share of the PopulationU.S., Utah, Salt Lake City, Salt Lake County

Utah is in the midst of an unprecedented economic, demographic, and cultural transformation that has its origins in national and international trends. Into the future, the state will certainly maintain many of its signature demographics: a relatively young and rapidly growing population with larger household sizes as compared to the nation. But, the cumulative impact of these trends is that Utah will continue to become much more diverse in age, culture, language, nativity, race, ethnicity, religion, and socioeconomics. Cumulatively, these trends have far-reaching implications for Utah's future and require effective reengineering of a broad spectrum of investments in human capital and the built environment.

60%

50%

40%

30%

20%

10%

01900 1920 1940 1960 1980 2000 2020 2040

900,000

850,000

800,000

750,000

700,000

650,000

600,000

550,000

500,000

450,000

2000 2010 2020 2030

81.6

61.968.5

61.568.2

58.9

70.062.4

71.7 73.1 72.9 74.078.2 74.4

80.475.7

nU.S.— Salt Lake City— Salt Lake County— State of Utah

— Cumulative births, 5-17 Years Prior

— School-Age polulation (nLow/High)

UtahnRetirement AgenYouth

U.s.nRetirement AgenYouth

Source: Governor’s Office of Management and Budget, 2012 Projections.

Source: BEBR Analysis of Governor’s Office of Management and Budget, 2012 Projections and historical birth data . Note: If there are no deaths and no in or out migration, the school age population will be the total births that occurred 5 through 17 years ago.

Sources: Bureau of the Census, Gibson and Jung (2002), Perlich (2002), BEBR

Source: BEBR analysis of Governor’s Office of Management and Budget, 2012 Projections

“The future is not a gift. The future is an achievement.” — r. f. KenneDy —

Non working age per 100 working age

Page 4: D av iD e ccles s chool of BUsiness i University of Utah Four ...le.utah.gov/interim/2013/pdf/00004435.pdf75.7 n— U.S. — Salt Lake City — Salt Lake County State of Utah — Cumulative

Long-Term Strategic Planning:

Smart, long-term strategic planning

starts with a proper understanding of

the power of effective group decision

making. Groups can generate the very

best, but also the very worst decisions.

By recognizing the advantages and

challenges associated with group

thinking, better decisions can be

made. Using the same leadership

team, the Kennedy administration

had a horrific outcome (Bay of Pigs)

and a stellar outcome (Cuban missile

crisis). These examples serve as

instructive lessons in effective group

decision making and the principle

of unintended consequences.

U n i v e r s i t y o f U t a h i D a v i D e c c l e s s c h o o l o f B U s i n e s s

“Things which matter most must never be at

the mercy of things which matter least.”

— Goethe —

Four-Step Group Decision Making Process

Decisions Matter

Source: Cicero Group

Source: Cicero Group

Source: Cicero Group

Pillars of an Efficacious Strategy

1Ask the right

questions

4Define. Measure.

Execute. Recalibrate.

2Demand

accurate data

5Allocate the

right resources

3Prioritize and

play to strengths

6Keep your focus on the

long-term priorities

Group Decision Making: Positive or NegativeGroups can generate the very best, but also the very worst outcomes.

Positive

negative

individual individual Deliberation Group Deliberation

Out

com

es

Unintended consequences: The unexpected result of an action. Too often, a sincere motive or program results in unintended consequences

that far outweigh the intended benefits. Dec. 17, 2013

UTAHLegislative Policy Summit

U T A H T o d A y :

Favorably Positioned

T o m o r r o w :

Utah is Changing

L o n g - T e r m :

Decisions Matter

U n i v e r s i t y o f U t a h i D a v i D e c c l e s s c h o o l o f B U s i n e s s

Focus on topics and

questions that matter most

Gather accurate

information

Generate broad set of possible

solutions (divergent phase)

Pick the best

solution (convergent phase)

1 2 3 4