Every leader and team should have a scorecard... I tried to convince you of this in my previous post. Today is part one of a post on how you can create a scorecard capable of driving real performance improvement. The following are some concrete ways to add impact to your scorecard.
Keep it focused – I once worked with a team who expressed concern over their ability to move critical metrics. They just couldn’t seem to drive performance. I asked to see their scorecard. As I recall, they had 23 KEY METRICS… Yes, 23! Upon further investigation, each member of their team was selecting 2 or 3 of these to focus on. The problem, everyone was choosing a different group of 2 or 3. There was no synergy, momentum or unified effort. There is no magic number regarding how many metrics to include on your scorecard, but from experience, I would suggest a number closer to five than ten. This should create focus.
Keep it balanced – There has been much academic work on the topic of the balanced scorecard. It was one of the topics we explored in depth during my time at Harvard. For the purpose of this post, here is a shorthand explanation. A balanced scorecard includes both financial and non-financial metrics. Early examples included, financial, customer data, process and learning metrics. The balanced scorecard is an attempt to capture the complexity of modern business in its essence and identify key drivers of success. As an example, even if your company is a service business, you wouldn’t want your only scorecard metrics to revolve around customer satisfaction. You would also want to include revenue or sales, some metric about financial return. A balance scorecard forces a broad look across the business. On your personal scorecard, you may want to look at family, fitness, financial, community and other metrics.
Include outcome and process metrics – This is more common at lower levels in an organization than at the top. However, for most of us, this is extremely powerful. I’ll illustrate with an example from the world of sales. If you are a commission salesperson, you might instinctively think your only metric would be sales - probably not. What about the number of calls you make in a given week or month? How about how many pitches you did to potential clients? Both of these are examples of process metrics. They may be great drivers of your success. And, they might help evaluate your current strategies and tactics. Many scorecards need both process and outcome metrics to have maximum affect.
Check back next week for a few more suggestions on how to build a scorecard that makes a difference.
Between now and then, take a look at your team’s scorecard. What grade would you give your efforts to date? Is your scorecard focused, balanced and a blend of outcome and process metrics?[GLS_Shield]