Updated: November 10, 2021
By: Mark Abbott
Summary: When building a sustainable business, numbers (and their associated math) need to be understood in order to fully understand how things are going, as in how close or far the business is to reaching its goals. A common tool used to accomplish this is what we call a “Scorecard,” a tool to help capture those numbers, making it Almost EasyTM to track what’s working well, as well as any areas that need extra attention. This article explains more about mastering the Scorecard and its use.
It’s simply impossible to build a sustainable business without a focus on numbers and their associated math. Fact is, unless you just love burning through cash with no end in sight, you have to not only look at numbers to understand how your business is doing, but also understand when the associated math makes sense (e.g., revenue > expenses).
Over time, every competent business builder, leader, manager, coach and non-managerial worker finds themselves wanting to better understand the math associated with their work so they, and their colleagues, have a clear sense for when things are going well and when they are not. At the risk of stating the obvious, math isn’t everyone’s favorite thing – some of us are much better at this than others – but someone needs to make sure we not only understand the math associated with our work, but that the math is telling us how things are going.
One of the most common tools that businesses use to understand the math of their Work is this thing we like to call a Scorecard.
The basic idea behind a Scorecard is that it shows a bunch of key metrics (a.k.a., measurables and key performance indicators or KPI’s) that help us see where / when things are working well and where / when they are not.
Most businesses start off with only a limited number of measurables that are actively watched and managed, such as revenue, expenses and cash. As a business grows and becomes more complex, it starts to divide up the work into departments (e.g., sales and marketing, operations, finance, etc.). In short order, these departments also start to have their own sets of measurables that they monitor and manage and, sooner or later, they, too, will have their own scorecards.
As the company continues to grow, it starts to build teams and layers and, sooner or later, each team has its own scorecard composed of a bunch of measurables that are owned by its members. The end result is that it’s almost inevitable that, over time, if the business is reasonably well run, every person in the company will have a set of measurables and their own mini scorecard.
Having coached hundreds of companies, I can tell you that most struggle with figuring out how to master the use of a Scorecard tool across, up and down their organizations. If you are one of them, know that you are exactly where you are supposed to be because Ninety is here to not only help you demystify the art and science of Scorecard mastery, but to provide you with a collection of tools that makes mastering the Scorecard Almost Easy.
Everyone Needs Numbers
Every single person in a reasonably well-run company should have a very specific job. We like to call those jobs “Seats” and every Seat should have a list of roles and responsibilities that make it crystal clear what the people sitting in the Seat are responsible for. The tool we have for making sure we understand who is responsible for what is commonly called an organization chart. Some call it an “accountability chart.” Others, a “roles and responsibilities” outline. Essentially, it is a graphical representation of who is responsible for what within the organization.
The fact that your colleagues are responsible for something is a great thing because it means that they matter to us, and as people who matter to us, we want to make sure they understand what great work looks like, as well as what not-so-great work looks like. At the risk of stating the obvious, it’s far better for the Seat holder and their manager (who we hope will view themselves as a coach), if everyone is on the same page in terms of what good performance looks like. One of the easiest ways to do this is to talk about the math associated with every one of their responsibilities.
Yes, we know that sometimes the math isn’t so apparent. Other times it’s more of a matter of “yes” or “no,” yet we’ve never seen a Seat where we, the manager (a.k.a., coach) and the Seat holder couldn’t come up with three to five measurables that made it Almost Easy to see if things were going well or not.
Three to Five
If you buy into the notion that it’s SMART to not only have everyone understand the math associated with their Seat, but also know what good and not-so-good looks like, the next big question is what’s “just right” in terms of the number of measurables that every seat should have. We’ve had this debate with our coaching colleagues for years and we’re fans of “three to five” measurables per seat. Why? The big issue with one or two measurables is that they tend to overemphasize one area, and whenever people do this, it tends to create problems. The beauty with at least three measurables is that three, just like the legs of a stool, tends to provide a more balanced view of what really matters. As an example, almost every seat in a company can have some type of measurable associated with quality, timeliness and process – and most have some form of quantity that can be worthy of measurement as well.
Five to Fifteen
Once you buy into the notion that every Seat can have at least three measurables, the next question is how many measurables does a good team Scorecard have. Fact is, the number of measurables on a Scorecard can vary, and should be based on the data that’s most indicative of how things are going, which can then be reviewed on a weekly basis to make sure everyone is on the right track, getting the results necessary to support quarterly Rocks and longer-term goals. In other words, did we win this week? No need to ask the Magic 8 Ball… the Scorecard reveals a more accurate answer.
6 Tips for Scorecard Mastery
1. Measure Less, Achieve More
Keep measurables meaningful for the company. Unnecessary metrics can distract teams from what really matters when it comes to achieving goals and driving success.
2. Measure Less, Achieve More
Core processes are key to the way your organization operates and measurables should reflect that. Use the Scorecard to quantify process efficiency, reviewing and discussing improvements in effectiveness periodically.
3. Include the Basics
Standard industry measures and key indicators from sales, finance and operations may be the same numbers the competition may be measuring, but a robust Scorecard allows an expanded approach that is as unique as it is useful. Put your own spin on what the right numbers are for your company. That might include things such as quantifying delivery, customer satisfaction and call response times. Do it well and it could provide for Almost Easy differentiation over the competition.
4. Identify Weekly Measurables
At minimum, we all want to know the results that must be achieved on a weekly basis to drive growth for the organization. As a team, ask yourselves every week, did we achieve these goals? Are we satisfied with the trends we see? Are things on track?
5. Measure Performance Throughout Your Organization
It’s important to go beyond the leadership team Scorecard and create measurables for different departments, including front-line employees, that reflect and support the greater vision for the organization. As mentioned earlier, measurables can be set for an entire enterprise down to the individual, as all are important to organizational success.
6. Adjust When Necessary
Scorecards are intended to be a work in progress. Take time to evaluate whether the Scorecard and its specific measurables continue to reflect the criteria necessary to drive the company forward. What’s missing? What’s no longer essential? Explore ways the scorecard can work even better, supporting team efforts to Get Smart Stuff DoneTM.
New Features and Upgrades to Ninety.io Scorecards
New Feature: Custom Goals
The dynamic nature of some industries requires tracking the true measure of performance with seasonality reflected in the numbers. Users can now install custom goals to Measurables on a score-by-score basis.
How to Input Custom Goals:
Upgrade: Better Organization
To help team members more easily distinguish between groups of Measurables, line breaks can be added between sets of Measurables to segment and organize your Scorecard data.
To Add a Line Break:
Value: Digital Storage
One of great things about Ninety.io Scorecards is that they’re cloud-based, stored digitally. They also contain a visual record of all goals and Measurables. This way, people have 24/7 access to an instant view of the data with company-wide transparency.
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