Many EOSยฎ companies initially struggle with their Scorecard because they try to monitor too much information.
Instead of focusing on a handful of important Measurables, they fill the Scorecard with too many numbers. As a result, they donโt love their Scorecard, and it doesnโt work well for them.
If that describes your Scorecard, here are five steps you can take to troubleshoot the issues and make it work better for your team.
1. Keep Your Scorecard Simple
Itโs tempting to go too deep when building a Scorecard. Donโt overthink it.
Think about your car. Itโs a complicated machine with thousands of parts, but there are only a handful of gauges on the dashboard because you only need to monitor a few important things to keep it running:
- Do we have enough fuel?
- How fast are we traveling?
- How is the engine performing?
- Is the oil level okay?
- Is the water temperature okay?
- How far have we traveled?
Your Scorecard should work the same way. Focus on the leading indicators that help your leadership team answer questions such as:
- Did we generate enough revenue from our current customers last week?
- Did we generate that revenue at prices and margins that allow us to be profitable?
- Did we gain new customers or complete the activities that will attract them?
- Did we make our customers happy by delivering on time?
- Did we complete the work efficiently, with acceptable quality and few errors?
- Do we have sufficient financial resources?
- Did the departments that support other areas of the business complete what they needed to do?
This is the frame of mind you want when thinking about your Scorecard. Otherwise, youโll make it much harder than it needs to be.
2. Start With the Leadership Team
Begin by designing your Leadership Team Scorecard around the goals recorded in your companyโs Vision/Traction Organizerโข (V/TOโข).
Because each member of the Leadership Team is responsible for a key function of the company, every department should have at least one number on the Scorecard that relates to achieving the Vision documented in the V/TO.
3. Ask What Made It a Good Week
Begin identifying Measurables by asking each Leadership Team member:
โHow do you know you had a good week last week?โ
Measurables are the activities or results that must be achieved each week to produce successful weeksโand, ultimately, successful months, quarters, and years.
From a numbers standpoint, did you achieve the goals for the week? For example:
- Did we produce X units?
- Did we make X calls?
- Did we complete X reports?
- Did we meet with X customers or prospects?
- Did we keep errors below X?
- Did we generate X sales?
- Did we have X or fewer compliance issues?
- Did we maintain X dollars in the bank?
- Did we keep accounts receivable over 60 days below X?
These are the types of Measurables you should include on your Scorecard.
4. Measure Your Core Processes
Every business has a handful of Core Processes. These typically include:
- Hiring and human resources
- Marketing
- Sales
- Operations, which may include several processes
- Customer satisfaction and retention
- Accounting
These processes define your way of doing business. Some of your Measurables should indicate whether those processes worked effectively during the previous week.
As described in Step 3, the activities and results associated with these processes can be quantified into useful weekly numbers.
5. Build Departmental Scorecards
Repeat Steps 1โ4 to create a Scorecard for each department.
Each leaderโs key numbers on the Leadership Team Scorecard should become the top Measurables on their departmental Scorecard. Break down what drives each Leadership Team number to determine which supporting numbers the department should track.
Just as every member of the Leadership Team should own a number, every employee should have at least one personal Measurable that contributes to achieving the departmentโs goals.
A useful Scorecard doesnโt measure everything. It measures the small number of weekly activities and results that tell your team whether the business is on track.
