What is a balanced scoreboard?
Most people understand scoreboards. For a business it is a valuable tool. It ensures that stakeholders have timely metrics, or indicators, to inform about key business elements, whether within or outside of tolerance. Knowing what metrics to track and getting that information on a timely basis is the key to a meaningful scoreboard.
“The framework itself is based upon leading and lagging indicators. Leading indicators are drivers – those that help you look ahead toward achieving your goal – and should be predictive in nature. By contrast, lagging indicators are outcomes – those that tell you what has already happened – and should confirm your long-term trends. A good scoreboard has a healthy mix of leading and lagging indicators.” Note 1
Scoreboards inform early in the process to update on performance as compared to expectations. This allows the team to make adjustments, to get back on target if lagging, and to learn which elements influence favourable results. This helps the team understand metrics and connects them to behaviours and processes that impact results. They are important to a culture of continual improvement. Tracking efforts through internal systems can leads timely reporting and effective change. The change may be implementing training programs, rotating staff, or making specific staff members responsible for key areas. As well, it may require adding quality control checks along the way. All of this can be engaging for the team, playing a role in both team building and commitment. The Scoreboard takes the business on a journey that starts to feed learning, reinforces positive processes and helps to grow understanding.
The One Page Strat Plan
One page strat plan, which I’ve used for years, is a high-level way to capture critical business elements such as: Vision, Values, Purpose, BHAG (if you are so inclined). It can also highlight critical metrics which can then be incorporated into the scoreboard. Keep in mind, that this depends on implementing processes to capture and present the information. There are templates online which layout the basics and can be adapted.
You can take this further and create a balanced Scorecard (BSC). “it is still the most popular performance management tool in companies worldwide…..The beauty of the BSC is that it ties directly to strategy execution to align everyone in your company, provides transparency into company intent, and adapts to your business.” *Note 1
“ The balanced scorecard (BSC) is a management system and structured report that aligns your company’s strategy with your tactical activities. …the balanced scorecard is one management tool that provides a cohesive and focused strategy. And with so many companies worldwide already using the balanced scorecard, there is plenty of expertise available to help you get started.” * Note 1
Things move fast. What used to be rare and practiced by few businesses, in many cases, is now table stakes. Customers are better informed and have higher expectations, competitors are more sophisticated and often there are new entrants from unexpected players in the marketplace. To make effective, timely decisions, you need to have timely, relevant information about critical elements of your operation. And you don’t want to be spending hours crunching numbers or trying to extract details from your business systems, such as they are.
“At the end of the day the question is whether the measurement process is driving good actions and appropriate behavior.” Note 2
*Note 1: https://www.smartsheet.com/balanced-scorecard-examples-and-templates
* Note 2: https://www.michaelhartzell.com/blog/metrics-scorecards-and-key-performance-indicators-kpis
