Scorecard Measurables and Why They Matter

Think of your business as an adventure.? Bright-eyed business owners are energetic adventurers— ready to take an idea and run with it. The good ones create a plan so that they know which direction to run, and the truly great ones use a compass to make sure they stay on course.?

While most entrepreneurs cringe at the idea of having a “structure”, believing it is too rigid, business owners worldwide know that having a clear roadmap, complete with SMART goals and milestones, frees them up to think about other “visionary” things. If you do not yet have a cohesive vision down on paper, check out Traction (a personal favorite of mine) for guidance on creating your own roadmap.

Getting that map together is exciting stuff!

Today, we’re going to take a closer look at the “compass” that will help you stay on the right path in your business. Enter: The Scorecard!?

The best addition to your business toolbox since the humble sticky note, the scorecard is an excellent way to:

1. Identify potential problems and course-correct
2. Know when to make adjustments to your processes?
3. Build a culture of accountability throughout your entire organization?

Hopefully, you are already aware of this nifty tool and its crucial role in a successful journey. If you’re not (or you just need a little refresher), here’s a quick gist-

Your scorecard is a tool that helps you identify and measure objectives from key components of your business - Financial, Customer Satisfaction, Safety, Internal Processes, Team Health, and Learning, just to name a few. Using that information, you can see what needs more attention, what is improving or thriving, and how each individual component of your business contributes to or distracts from you reaching your overall goals.?

Sounds like a lifesaver, doesn’t it? It certainly can be!?

Whether you know all of that already and just want to know why it works or you’re new around here and want to learn how to make scorecards work for you, I invite you to join me as we explore the psychology behind the ever-useful scorecard.??

There are so many things at play here, so let’s look at them one at a time.?

Access To Information?

Scorecards make information about the goals and outcomes of your business accessible to your team.?

Seeing on paper (and in real numbers!) how each part of the business works together toward a common goal can absolutely inspire a sense of ownership over the work and a sense that the work of the individual ultimately matters and has meaning.?

And this isn’t just me getting really excited about scorecards (even though I am!).?

Studies have shown that even when there is no financial incentive for employees to increase their commitment to the organization, they tend to do so when they understand…

1. what is expected of them and what they can expect in return and
2. how they as individuals—and therefore the work that they do—fit into the group as a whole

This is good for business, of course, but it’s also good for the wellbeing of the employee and the longevity of their career. Now that’s a win-win!?

Where We Look For That Information

When you’re gearing up for creating or revising your scorecards for maximum effectiveness, you’ll find that there are almost limitless options for what information to include.?

Again, there’s no magic answer that suits every business- or even every industry. You know your business best, so I will lead you to where that vital information lives and you can dig in for yourself!

Processes

First, look at your internal processes - are they well-documented and mapped out? Do the appropriate team members agree on the processes??

Is your team following what is outlined or going off-book??

How is that impacting your measurable outcomes??

Are you seeing the correlations you expected?

Once you get the idea, you’ll see how you can translate any action/reaction relationship into numbers and see their impacts in a way that is less nebulous, more concrete, and let’s be real, significantly more useful than before.?

Nothing says “your individual actions have a meaningful impact on this business” quite like… well, information showing what individual actions have a meaningful impact on the business!

Fairness and Accountability

What do fairness and accountability have to do with any of this?? Oh, you’d be surprised!?

When things go awry, it’s all too easy to find conflict and blame among team leaders. When we lead by intuition and gut feeling, no matter how stellar we are at that, we leave a lot of space for interference from subjective sources.

Having clear measurable expectations for individual roles helps take the drama and personal bias—implicit and explicit—out of the equation.?

This is one area where the scorecard does a lot of heavy lifting, on a human-to-human level. It's so important to be able to separate the outcomes you see from the emotions that might be involved. Having those emotions removed leads to more consistent and decisive action, no matter what the external circumstances.???

The best part is that you can work together on what those measurables will be so your team knows exactly what’s expected of them (remember how important that is!). Bonus points if you map out the measurables for roles before they’re filled so you can set off on the journey together, with confidence and trust in the direction.?

The scorecard can be used as a rubric, a guide to expectations, and a concrete reminder of the goals that individuals have committed to. One study suggests that an employee’s perception of the workplace as “fair” is an important factor in improving their overall performance and that “goal commitment” can play a role in creating a sense of fairness.?

Your Strategic Plan?

Let’s take a couple of steps back and take a look at our roadmap (Did you go create yours yet? You should!). The “compass” - aka your scorecard -? should correspond with it perfectly.?

This means that ultimately, everything you measure and show on your scorecard should be relevant to you reaching your destination and fulfilling your vision. Likewise, everything that you need to reach your goal should be represented in some way in your measurables.?

You wouldn’t set off on an ocean adventure, but write a packing list for rock climbing, right? Seriously consider that when you’re planning around things that do not bring you closer to your goals, you’re just heading north to your southern destination.?

Not only is that bad for your own direction, but it’s also bad for the overall mood and work quality of everyone else. This exploration of the scorecard’s relationship to change concludes:

“Change is more likely to happen when a clear reason for it exists.”?

If you’ve ever had a conversation with a child under the age of 5, you have been bombarded with the question, “why?” and you know this to be true. It is just in our nature to want to know why we’re being asked to do something or not do something.

Scorecards that are in alignment with your vision spell out clearly for your team, keeping them in the loop and feeling involved.

How Much We Measure?

I know I’m talking a lot about measuring here, but I am not talking about measuring a lot.?

It’s so easy to get bogged down with information - if you go looking, there are thousands of data points that you could cite, measure, and monitor all the live-long day. But let’s not fall into the trap of measuring for the sake of measuring. That’s not a good use of your time and it does not give your team the clear directive that they need.?

Ask yourself- does this information impact the trajectory of my journey??

Focus on those items that you can chart directly to your future goals. You may find a few things along the way that used to be relevant to your goals, but no longer require the time and energy you are giving them and that’s totally okay!?

Your scorecard is a living document - It is not meant to be written in stone.? You may find it necessary to include temporary measurables for a certain area the business is focused on, such as correcting a broken process, improving performance, or ensuring customer satisfaction.?

This is a great opportunity for you to refocus and redirect. It also gives you the perfect platform for expressing goal changes and what that will look like for everyone else.??

How We Measure

Once you’ve hunted and gathered up all the numbers that are the most important to you and determined which are actually relevant to your goals, it’s time to decide how you will measure. Not to drive this analogy into the ground (again) but this part is a little bit like a “Choose Your Own Adventure” book, which is to say: you’ve got options!?

You can track and report progress in percentages, fractions, dollar amounts, ratios, or really anything else that shows your team an objective measurement in a visual and easy-to-conceptualize way.?

Your scorecard isn’t going to be very helpful if only you can understand it, so please consider that when you put it together.? ? And if you care about your team - make sure that it doesn’t take 2 hours, a mathematician, and a team of analysts to arrive at the measurable they’re responsible for reporting that week!

Does your business need a scorecard? Are you running without processes? Let’s Talk!