May 7, 2018

7 Essential Tips for Kick-Ass Company Scorecards

Ah, the dreaded quarterly business review. A parade of department leaders perform 45-minute monologues while their colleagues check emails, cat nap or quietly prep for their own presentations.

Participants withhold valuable feedback either because they're disconnected from the other departments or afraid of reciprocity when they step into the spotlight. Perhaps both.

Houston, you have a problem. What you need is company-wide alignment around cross-functional strategic objectives, reflected on a scorecard-- a nitty-gritty operational reporting mechanism that's reviewed on a weekly, monthly or quarterly basis.

Here are 7 essential tips for setting up a scorecard that unites departments and teams, provides a business barometer for today and forecasts potential risks down the road.

1 Start with Alignment

It's easy to come up with things to track. The hard work is coming up with the right things, especially as your organization grows.

The first step is always to pull the executive team together to establish the strategic initiatives and priorities for your business--as a group. This process, which can be long and arduous, creates natural alignment around a common set of goals, giving everyone a sense of unity and purpose. Only then should you establish a scorecard--always remembering that the scorecard process MUST be tied back to the agreed-upon strategic objectives of the company.

2 Give Yourself Time and Resources

Anticipate 2-3 months of development time and a few meeting cycles to get it right. The scorecard currently used at Workfront began its incubation in December--in a 4-hour meeting. We had a solid draft by January, and we held our first monthly scorecard meeting in February.

Even with best intentions, these things can drag out. Accelerate the process by bringing in a consultant or organization-development professional to interview each department, facilitate meetings, work through the inevitable iterations and act as an objective third party.

3 Think Baseball Box Score

Keep your scorecard simple and streamlined, like a baseball box score or field scoreboard. If you've ever followed the sport, you know that the depth of statistics measured and tracked by baseball teams is unfathomable. The box score provides a brief, at-a-glance summary that everyone in the organization--and the fans--can rally around.

The same is true for your business. If your scorecard gets too complicated, it won't be useful or sustainable. Remember that the scorecard can't reflect all the data that's used to manage the business. It's just a snapshot. Individual teams will also have much deeper success metrics to track and manage.

4 Leverage Cross-Functional Collaboration

In theory, it would be easier for each scorecard metric to be solely owned and managed by a single department. But in today's complex business environment, this is neither practical nor possible.

The real power comes from objectives that are cross-functional in nature. Customer satisfaction is a good example. A lot of different teams touch this part of the business, and when frustrations and issues bubble up, they are probably being discussed in a half-dozen isolated departments without ever being comprehensively addressed.

If you add customer-satisfaction to your executive scorecard, you'll have a natural time and place to leverage company-wide collaboration, with ideas coming from individuals with different specialties, perspectives and skills. Implementing proposed solutions is likely to cut across business units as well, which means it's increasingly important for everyone to learn how to influence and recruit help from people who do not report to them. Goodbye, silos.

5 Embrace Transparency

I hold a monthly scorecard meeting with an extended leadership team of about 35 people, including all of my business-unit leaders and most of their direct reports. This broader meeting has greatly increased visibility and transparency among the biggest influencers in the company.

Gone is the perception that a select few elite executives get to lock themselves in an ivory tower, floating important initiatives down to the masses from on high. My monthly meeting gets vice presidents, directors and their reports on the same page, breaking down the vertical walls between departments--as well as the horizontal ceilings that divide executives from hands-on managers.

6 Focus on the Failures

Increase the efficiency of your monthly scorecard meeting by giving a quick, cursory nod to the successes and using the collective brainpower to focus on the failures. If a metric is off, expect the person who owns that number to provide an explanation, countermeasures taken so far and any risks involved. The collected team will then discuss the issue, make suggestions and assign action items.

Your scorecard will eventually begin to show historical progress for each metric. If a particular goal is missing the mark month after month, you'll be able to predict results for the quarter or the year and plan accordingly.

7 Be Fanatical About Following Up

The tendency with any state-of-the-business meeting like this is to distribute a long list of action items, which no one looks at it until an hour before the next meeting. Don't allow that expectation to take root with your scorecard meeting. From the very beginning, set a standard of following through and following up.

If every team has different project-management methods and communication tools, cross-team collaboration and follow-up on action items will be difficult. Ideally, you want a comprehensive work-management solution that's utilized throughout your organization. Then you, as the meeting leader, can watch real-time progress on all relevant action items, weigh in on tasks, facilitate collaboration and even offer an encouraging thumbs-up as needed.

The Benefits Outweigh the Costs

As you start down the scorecard path, with a 4-hour kick off meeting and 3-hour monthly meetings with 35 of your highest-paid employees, someone will be tempted to calculate the hourly cost. "If you add up the hourly wages of all of the people in this room, this meeting is costing us..."

But what I would ask is: compared to what? Compared to a dozen smaller meetings every month, where isolated teams try to make decisions without all of the relevant information, power or resources? Compared to four different teams debating the same problem in four separate conference rooms--and all of them getting nowhere? Compared to not measuring, discussing and strategizing the company's key objectives? Compared to the alternatives, a well-organized monthly scorecard meeting is an excellent use of both time and resources.

If you've tried a scorecard in your organization before and failed, or if you're just starting to keep score, try these seven tips for greater alignment, unity, visibility and teamwork in your organization. And watch your team batting average soar.

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