Monthly Economic Monthly Economic Indicators July 2019 Energetic Bodies. Energetic Minds. Research...
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Monthly Economic Indicators
Energetic Bodies. Energetic Minds.
of 18 key economic
Development Research Partners
A CEO's Insights: Target Operating Model, July 2019
All business leaders want to maximize their company’s profit and efficiency. We develop strategic plans to guide our growth, market to attract customers, implement customer service strategies to retain existing customers, and do our best to staff to those needs.
But I expect that most leaders reading this article are focused beyond these basics. We’re trying to peer as far into the future as possible while recognizing that the pace of change will only keep accelerating. We’re thinking about how to disrupt, instead of being disrupted. We’re retooling our products and services to reflect the digitization of customer interactions and behaviors. We’re trying to move beyond one-off initiatives and siloed units. We’re trying to radically reimagine our customers’ experience. And, if we’re smart, we’re asking ourselves if the way we’ve configured our business enables us to do any of these things in a sustainable, transformative way.
That’s the genesis of work my company, and I suspect many of yours, has launched to define our “target operating model.” You’ve probably read about this in the business literature, and may have dismissed it as just the latest flavor of the month that large consulting firms are using to sell their services. But I find it to be an enormously helpful way to think about how to position my company for future success.
The target operating model construct is elegantly simple in conception yet fiendishly complex to execute. Simply put, it asks you to define what your business needs to be and do in order to thrive – to, as McKinsey puts it, “simultaneously disrupt existing processes, drive value, and improve customer experience while reducing costs to serve.” The hardest part comes next: how do you get there?
And that’s where the rubber meets the road. Does technology or people constitute the primary “axis of change”? What capabilities do you need? How much do you build versus buy, hire versus outsource? How do you configure your teams to maximize their ability to deliver unparalleled customer experience with new digital tools? How do you transform customer journeys by successfully balancing the need for automation with the need for exceptional human touch? How do you help your current employees develop the skills they need to thrive in an environment of new value creation? How do you create teams that are agile in every sense of the word? And, understanding that transformative change doesn’t happen all at once but via a series of initiatives, how do you prepare your people for rolling waves of change?
As CEOs, it is up to us to evangelize for and lead this kind of transformation, and surround ourselves with other leaders who not only share our vision but can excite their teams to achieve it. The stakes are high. Companies that don’t think in this way risk irrelevance and replacement, as new technologies smash previous barriers to entry in virtually all industries. My own company has been around for more than 100 years, and I know that another 100 depend on my and my team’s willingness to listen to customers and then think differently – ignoring old assumptions – about how best to meet their needs.
Phil Kalin joined Pinnacol Assurance as CEO in 2013. He has served as the chief executive of both public and privately-backed companies, including large
hospital systems, as well as organizations focused on health care data, technology and education. He has been active nationally on health care topics related
to insurance, data analytics, technology innovation, cost improvement and risk mitigation. Phil is providing an informed opinion on what we see in the Monthly
Metro Denver Economic Development Corporation | July 2, 2019 | Page 1
The Monthly Economic Indicators is a comprehensive analysis of economic conditions in the seven‐county Metro Denver area, or the region comprised of Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas, and Jefferson Counties. There are two metropolitan statistical areas (MSAs) located within the Metro Denver region: the Boulder MSA (Boulder County) and the Denver‐Aurora‐Lakewood MSA (the Denver MSA) (Adams, Arapahoe, Broomfield, Clear Creek, Denver, Douglas, Elbert, Gilpin, Jefferson, and Park Counties). This report presents recent data and long‐term trends for the seven‐county region, MSAs, or counties, depending on availability. The analysis includes four main data sections: labor force and employment, the consumer sector, residential real estate, and commercial real estate.
Notable Rankings According to the new 2019‐20 rankings from U.S. News & World Report, Children’s Hospital Colorado is one of the best
children’s hospitals in the nation. Children’s ranked No. 6 for Gastroenterology and GI Surgery, No. 7 for Diabetes and Endocrinology, and No. 7 for Pulmonology, with top 20 rankings in seven other specialties. The rankings are based on annual surveys and clinical data around the country. Methodology factors include patient volume, outcomes, and compliance.
Solar installations in Colorado increased 19 percent so far this year, maintaining the No. 12 ranking among states with the most solar projects according to Wood Mackenzie Power & Renewables. Colorado currently has the eighth‐largest workforce in the solar sector, totaling 6,847 jobs with a total of 1,227 megawatts installed. At the end of 2015, the state only had 544 megawatts installed.
Wallethub ranked Colorado No. 5 for “2019’s Best States to Live in”. The report used five criteria – affordability, economy, education and health, quality of life, and safety – broken into 51 different metrics. Colorado ranked 25th in affordability, fourth in economy, eighth in education and health, 12th for quality of life, and 29th for safety. New Jersey, New Hampshire, Minnesota, and Massachusetts were the only states ahead of Colorado in the rankings.
According to the “2019 America’s Best Cities” report from Resonance Consultancy, Denver ranked among the best large cities in the United States. The rankings were based on six categories: place, product, programming, people, prosperity, and promotion. Denver ranked No. 12 in Product, accounting for things like airline connectivity, attractions, cultural institutions, and higher education; No. 13 in People, accounting for diversity of population and educational attainment; and No. 15 in Prosperity, including economy, number of Global 500 corporate headquarters, and standard of living.
According to the “Renter Migration Report” by ApartmentList.com, Denver ranked second in the number of renters coming to the city from other places, with 55 percent of people searching for homes in Denver coming from other areas outside of the state. Tampa, Florida took first, with 63 percent of people entering the city from outside the metro area. New York City had the highest share of inbound searches to Denver, accounting for 4.7 percent of the people leaving other cities to move to Denver.
National Economic Overview Gross Domestic Product The U.S. Bureau of Economic Analysis (BEA) released the
third estimate of real gross domestic product (GDP) for the first quarter of 2019. The estimate showed that GDP increased at an annual rate of 3.1 percent through the first quarter, which was 0.9 percentage points above the fourth quarter rate of 2.2 percent.
Metro Denver Economic Development Corporation | July 2, 2019 | Page 2
The U.S. GDP was consistent with the second estimate released in May. Upward revisions to nonresidential and residential fixed investment, exports, and government spending were offset by downward revisions to personal consumption and inventory investments.
Interest Rates The Federal Open Market Committee (FOMC) of the Federal Reserve decided to hold interest rates steady, currently
holding its benchmark funds rate in a range of 2.25 percent to 2.5 percent.
Committee members cited overall inflation and inflation for items other than food and energy as having declined and are running below 2 percent, the target rate. The Committee continues to uphold its mandate to foster maximum employment and price stability by maintaining strong labor market conditions and inflation near the 2 percent objective.
The next FOMC meeting is July 30‐31, 2019.
Policy Watch National & International President Trump and Chinese President Xi Jinping settled for a truce in the trade war between the U.S. and China