Almost every EOS company struggles at the start of their journey with their Scorecards and measurables. Sometimes we make this process harder than it has to be by trying to measure every single thing that ever happens in our company.
You can run yourself ragged over the Scorecard by trying to monitor too much information instead of focusing only on key performance indicators. I've distilled this process into five simple steps.
My 5-step process for designing your Scorecard
1. Get in the proper frame of mind, or you'll over-complicate the task.
It is tempting to go too deep in developing a Scorecard. Don't overthink it!
Just think about your car. It's a complicated machine with thousands of parts, but there's only a handful of gauges on your dashboard because there are only a few key things you need to monitor to keep it running.
Do we have fuel? How fast are we traveling? How's the engine's performance? Oil OK? Water temp OK? How far have we traveled?
Scorecards are the same way. Ultimately, you want to know:
- Did we get enough revenue from our present customers last week?
- Did we get it at prices/margins that allow us to be profitable?
- Did we get new customers / do the things that will bring us new customers?
- Did we make our customers happy by delivering on time?
- Did we do that work efficiently enough, with acceptable quality or few errors?
- Do we have enough financial resources?
- Do we have our departments that serve other departments in the business doing what they need to be doing?
This is the frame of mind you want to be in before you start planning or you'll make this much harder than it has to be.
2. Begin with your Executive Leadership Team and your V/TO.
First, design your Executive Leadership Team (ELT) Scorecard and its key measurables around the big goals recorded on your company's V/TO. Since each member of the ELT is responsible for some key part of the company, every department in the company must have a number on the Scorecard that relates to achieving the Vision on your V/TO.
3. Start identifying measurables by asking each team member, "How do we know you had a good week last week?"
Measurables are the activities or results that we must achieve on a weekly basis in order to have successful weeks, and thus successful months, quarters, and years. Each part of the business should have no more than three or four key indicators of how their week went.
From a numbers standpoint, did we achieve the goals for the week? For example, did we produce X units? Make X calls? Get out X reports? Meet X people/customers? Keep errors below X? Have X Sales? Did the organization have X or fewer compliance issues? Have X in the bank? No more than X in Accounts Receivable over 60 days?
These are measurables you should plug in to your Scorecard.
4. Include measurables related to your Core Processes.
Recall that every business has a handful of Core Processes. These are the areas common to all businesses:
- Hiring / Human Resources
- Operations (usually several)
- Customer Satisfaction / Retention
In your company, these processes are the key to your way of doing business, and some of your measurables should reflect whether they were working last week (or not). These can be quantified into numbers, as in Step 3.
5. Repeat steps 1-4 to create Scorecards for each department.
Each leader's key numbers on the ELT Scorecard will be the top measurables on his/her departmental Scorecard. Simply break down what drives the numbers on the ELT Scorecard to fill out the departmental Scorecard. Just as every member of the ELT has a number, every employee in every department should have personal measurables that contribute to achieving the department's measurables.
Before you start, I recommend you read "The Data Component - Safety in Numbers" section of Chapter 8 of TRACTION, beginning on page 115.
You might also read "What's My Number?" in Chapter 7 of What the Heck is EOS?
Here are a few more resources you can check out online:
- The EOS Scorecard overview presented by Sue Hawkes onYouTube (2 minutes)
- Make Your Scorecard Work - The Seven Truths by Gino Wickman on EOSWorldwide.com
- KPI examples by department and industry from Scoreboard Software
- 136 Key Performance Indicators Examples by Karola Karlson
- KPI - Key Performance Indicators examples from PNMSoft
- Stacey Barr, The Performance Measurement Specialist
- Process Triage- A company that maps core processes in a way that creates the key measurables that drive them.
If you're still struggling after all this, contact me to schedule a Scorecard Session.
Many thanks to Dan Wallace, whose teaching on Scorecards inspired this post.