Everyone who leads a business knows the value of good metrics. Decisions based on the right selection of information generally are better than decisions made on instinct alone. That’s precisely why EOS® recommends every business incorporate the EOS Scorecard™ into their Level 10 Meetings™.
Dialing in a great Scorecard takes effort. False starts are normal, especially for teams that aren’t used to operating with KPIs (key performance indicators) constantly in focus. Stick with it. Tracking the right measurements helps a team know when it’s on track or off, and to identify the real problems facing the business.
These are some ideas to keep in mind as your team develops and implements its EOS Scorecard.
- Embrace change.
Most EOS companies aren’t at a point in their growth process to have a team of data analysts on speed dial. Instead they pull together their first Scorecard based on a mixture of instinct and experience. Expect to adjust the focus of your Scorecard as you go.
It’s important to treat changes to the Scorecard as a major decision. I always encourage my clients to review their Scorecards at quarterly meetings. But if a number isn’t working, or a key number isn’t being captured, it’s better to adjust now.
- Beware the wrong KPIs.
I recently heard a talk by an experienced tax accountant about the importance of selecting the right KPIs for a business. One of the points that he made is that the wrong KPIs can be a growth killer. “If a business gets distracted by a number that’s irrelevant or unimportant to their true goals, it won’t achieve them,” he said.
Every quarter, look carefully at your Scorecard and ask if it’s doing the work you need it to do. Are the numbers you’re collecting the best indicators of whether the business is moving in the right direction? Is tracking each number on a weekly basis creating actionable information, or is it just ramping up unproductive anxiety?
- Be practical.
A Scorecard stuffed with metrics that are hard to collect or disconnected from real choices won’t do a business any good.
One of my clients in the marketing industry has struggled to come up with a meaningful way to measure the quality of their service delivery. They’ve tried counting client complaints, only to discover that complaints were too rare to be helpful. Next they tried measuring the timeliness of their project completions. But because so many of their project timelines depend on external factors like timely feedback from clients, they found gathering accurate information impossible.
In the end, they decided that the simplest way to measure client happiness was to track accounts receivables. Their Visionary put it this way: “If we’re getting paid, our clients are happy.” Rather than looking for novel ways to track performance, they decided to focus their efforts on what they could control.
- Use the Scorecard wisely.
Sometimes a team loses track of their Scorecard, leaving it untouched for months at a time. Although doing that lets an important asset go unused, it may still be better than gathering Scorecard data and doing nothing with it.
I work with a business that built its Scorecard around a detailed time-tracking system. Each week, every employee at the business was tasked with recording how they spent their time, down to 5-minute increments. Their Integrator would run reports every Monday morning and update the Scorecard.
During our annual session, I asked the team how they were using the hours numbers they’d collected on their Scorecard. Their Visionary admitted, “We aren’t.” When I asked why, the team said they weren’t sure what to make of the numbers. Their Scorecard was running on autopilot, taking up lots of time without delivering results.
In their case, the solution was to recommit to using the information in their Scorecard to make decisions. They streamlined the information they really wanted to see and made Scorecard analysis a permanent part of their Level 10 agenda. Doing so has helped them to finally make use of their data gathering efforts.
Lean on your EOS Implementer®
The best Scorecards are shaped by experience. Working with an EOS Implementer allows a business to draw upon the experience of many other businesses at once. Doing so will help the team avoid pitfalls and instead choose Scorecard metrics that can serve as launchpads.
What challenges has your company faced building its Scorecard? I’d like to hear from you. Find me on LinkedIn, send me an email at [email protected], or give me a call at (954) 598-4615 to chat about ways to get the most from EOS!