When building a sustainable business, we need to analyze numbers (and their associated math) to fully understand how things are going and how close or far the company is to reaching its goals. A common tool used to accomplish this is a "Scorecard," which captures those numbers and makes it easy to track what's working well and which areas need extra attention. This article explains more about mastering the Scorecard and its use.
It's simply impossible to build a sustainable business without a focus on numbers and their associated math. Unless you love burning through cash with no end, you must look at numbers to understand how your business is doing and when the related math makes sense (for example, when revenue is greater than expenses).
Over time, every competent business builder, leader, manager, coach, and non-managerial worker finds themselves wanting to better understand the math associated with their work. Everyone wants to have a clear sense of when things are going well and when they're not. At the risk of stating the obvious, math isn't everyone's favorite thing — some of us are much better at this than others — but someone needs to make sure we not only understand the math associated with our work but that the math is telling us how things are going.
One of the most common tools that businesses use to understand the math of their Work is this thing we like to call a Scorecard.
The basic idea behind a Scorecard is that it shows a bunch of key metrics (aka measurables, performance metrics, key performance indicators, or KPIs) that help us see where and when things are working well (or not). When teams align on measurables, they’re strengthening their Data Core Competency — one of the 9 Core Competencies that great companies master.
Most businesses start with only a limited number of measurables actively watched and managed, such as revenue, expenses, and cash. As a business grows and becomes more complex, it divides the work into departments (such as Sales and Marketing, Operations, and Finance). In short, these departments also start to have their own sets of measurables that they monitor and manage. Sooner or later, they will also have their own Scorecards.
As the company continues to grow, it starts to build teams and layers, and eventually, each team has its own Scorecard composed of a bunch of measurables owned by its members. The result is that it's almost inevitable that, over time, if the business is reasonably well run, every person in the company will have a set of measurables and their own mini Scorecard. These real-time metrics help improve collaboration and data visibility across teams, helping organizations focus on projects that drive results.
Having coached hundreds of companies, I can tell you that most struggle with figuring out how to master a Scorecard tool across their organizations. If you're one of them, know that you're exactly where you're supposed to be. Ninety is here to help you demystify the art and science of Scorecard mastery.
Everyone Needs Numbers
Everyone in a reasonably well-run company should have a specific job. We like to call those jobs "Seats." Every Seat should have a list of roles, accountabilities, and responsibilities that clearly define what the people sitting in the Seat are responsible for. The tool we have for ensuring we understand who's responsible for what is commonly called an "Org Chart." Some call it a "roles and responsibilities" chart. Essentially, it's a graphical representation of who's responsible for what within the organization.
The fact that our colleagues are responsible for something is a great thing because it means that they matter to us, and as people who matter to us, we want to make sure they understand what great work looks like and what not-so-great work looks like. The truth is, it's far better for the Seat holder and their team leader (who we hope will view themselves as a coach) if everyone is on the same page regarding what good performance looks like. One of the easiest ways to do this is to talk about the math associated with every one of their responsibilities.
Yes, we know that sometimes the math isn't so apparent. Other times it's more of a matter of "yes" or "no," yet we've never seen a Seat where the team leader (aka coach) and the Seat holder couldn't come up with 3–5 measurables that made it simple to see if things were going well or not.
Set 3–5 Measurables Per Seat
If you buy into the notion that it's smart to not only have everyone understand the math associated with their Seat but also know what good and not-so-good look like, the next big question is what's "just right" in terms of the number of measurables that every Seat should have. We've had this debate with our coaching colleagues for years, and we're fans of 3–5 measurables per Seat. Why?
The big issue with one or two measurables is that they tend to overemphasize one area, and whenever people do this, it creates problems. The beauty of at least three measurables is that three, like the legs of a stool, tend to provide a more balanced view of what matters. For example, almost every Seat in a company can have some measurable associated with quality, timeliness, and process — and most have some form of quantity that can be worthy of measurement.
Set 5–15 Measurables Per Team
Once you buy into the notion that every Seat can have at least three measurables, the next question is: How many measurables does a good team Scorecard have? The number of measurables on a Scorecard can vary and should be based on the data that's most indicative of how things are going. These measurables can then be reviewed weekly to ensure everyone is on the right track, getting the results necessary to support quarterly Rocks and longer-term goals.
In other words, did we win this week? No need to ask the Magic 8 Ball. The Scorecard reveals a more accurate answer.
10 Tips for Scorecard Mastery
1. Measure Less, Achieve More
Keep measurables meaningful for the company. Unnecessary metrics can distract teams from what really matters when it comes to achieving goals and driving success. Focus on goals that drive business growth and increase the overall health of the business.
2. Include the Basics
Standard industry measures and key sales, finance, and operations indicators may be the same numbers the competition may be measuring. A robust Scorecard allows for an expanded approach that is as unique as it is useful. Put your own spin on what the right numbers are for your company. That might include things such as quantifying delivery, customer satisfaction, and call response times. Do it well, and it could provide for differentiation over the competition.
3. Identify Weekly Measurables
At a minimum, we all want to know the results that must be achieved weekly to drive growth for the organization. As a team, ask yourselves every week: Did we accomplish these goals? Are we satisfied with the trends we see? Are things on track?
5. Measure Performance Throughout Your Organization
It's important to go beyond the leadership team Scorecard and create measurables for different departments, including front-line employees, that reflect and support the organization's greater vision. As mentioned, measurables can be set for an entire enterprise down to the individual, as all are important to organizational success.
6. Monitor Over Time
To help monitor results over time, users can toggle between 4-week, 13-week, and custom views for all their metrics. These views give teams better context, trend spotting, and quarterly goal alignment.
7. Adjust When Necessary
Scorecards are intended to be a work in progress. Take time to evaluate whether the Scorecard and its specific measurables continue to reflect the criteria necessary to drive the company forward. What's missing? What's no longer essential? Explore ways the Scorecard can work even better, supporting team efforts to work smarter.
8. Leverage the Forecasting Option
To help teams estimate the impact of their efforts, Ninety's Scorecard features a forecasting option. Users can now see where things are trending based on historical data. Forecasting adds insight beyond weekly snapshots, helping teams make proactive decisions.
9. Create Custom Goals
Many industries experience seasonal fluctuations that impact their goal tracking. Custom goals allow you to set specific measurables on a score-by-score basis — for example, by setting higher goals during busy seasons while keeping reasonable expectations for the rest of the year. Click the icon in each cell's top-right corner to open the custom goal window and adjust accordingly.
10. Use Groups
To help keep teams organized, you can create groups to segment and organize your Scorecard data within Ninety. This helps you organize data by key areas of impact, such as website performance, customer satisfaction, sales, and more.
Master Your Data with Ninety
One of the great things about Ninety's Scorecards is that they're cloud-based and stored digitally. They contain a visual record of all goals and measurables so that people can access all data with company-wide transparency. This helps you master the Scorecard as part of Stage 3 in the Stages of Development. Not sure which Core Competency matters most for your business right now? Start with our Stages of Development overview!
Ready to help your team focus on what matters? Sign up for a free trial with access to all Ninety's functions, features, and support. We guarantee that you'll love it.
