Like just about every company you know, Nancy Dahl’s business has been smacked by the downturn in consumer spending.  Nancy runs Lifetouch Portrait Studios, the folks behind the camera in 100’s of retail stores across the country like your local JCPenney or Target.

And like executives in many companies, late summer is the time to craft a plan – and budget – for next year.  This year it’s about squeezing a gift out of the wild, westward mountain crossing of 2009, dusting off, and charting a clear course to California (ok, to better performance in 2010).  Who would want to be Nancy?

I had breakfast with Nancy the other day, and she told quite a story.

Vacation + Domino = a-HA!

Nancy picked up my book Domino before heading out for vacation.  She would need to kick off annual planning with her leaders when she got back, and she was looking for some clarity about how to sort out several 2008-9 initiatives that were considered great when conceived but hadn’t paid off.  Her gut said the pain her division was experiencing wasn’t wholly due to the economy.

By the time she got through the end of the first chapter, she came face to face with some simple and direct questions about her customer experience.

“The first thing I realized was that the vision I held in my head of our target, or ideal customer experience may not be the same ‘end in mind’ that my leadership team held. To use our target experience as a way to drive decisions, we needed to get clear about that.”

We talked about how common it is for leaders to declare “OF COURSE” we must be customer focused (picture “Duh!” expression here), but never think beyond a long list of things-to-do-if-we-can-afford-it to map a clearly defined customer experience.

Nancy kept reading.

“The visual metaphor of a ‘line of falling dominos’ made me realize that while we tried many smart things over the past year, our dominos – our operating decisions – were not lined up well.”

At Aveus we know that in a line of falling dominos, the target customer experience is at the front.  We know from research and experience that leaders who define a target experience then use it to drive all the decisions and actions (the middle dominos) across the organization, they are twice as likely to report beating financial performance goals (the back domino).

That line would look like this:

Front domino-Middle dominos-Back domino.  Said differently:       Target experience-Decisions and actions-Financial performance.

Nancy’s “seemed good by themselves but not lined up well” initiatives looked like this:

Nancy felt the sequence and timing of these initiatives was not driven by a unified target experience goal, but rather each for its own sake. And you know what? I see smart well-intended leaders do this all the time.  (Do you have a long list of good but poorly aligned departments or initiatives?)

Provocative questions + guiding metrics = a path to 2x profit

By the time Nancy got home she knew she would use the guiding metrics, a few exercises, and the “if you don’t like your answer to these questions, work here” discussions in Domino as the framework for her annual planning meeting.

“Sure our priorities are aligned now. As a leader team, we also have clarity about what problem we solve for our customers – what really defines our business. That liberated us to challenge each other.  On a day-to-day basis we use our target experience to know when to create, stop or change what we’re doing.”

Oh, and the annual plan? Nancy beams at me when she says “we see a path to double our profits this year.”

Now who wants to be Nancy?