The Benefits of Scorecards to Keep Score in Your Business
Often, the most effective “tricks” are the simplest ones. Today, we’re exploring one of the most basic—and most transformative—business hacks I’ve found: scorecards.
I know what you’re thinking: “Seriously, Brandy? A scorecard? That’s not going to help me.” Or “Yeah, good luck getting that to work in my company. I’m never going to do that. This is crap; a scorecard isn’t a tip, trick, or hack.”
And I get it. Those were absolutely all the things I also thought. And I was wrong.
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Data Tracking Is the Basis of Scorecards
Keeping track of data can feel hard, cumbersome, and like adding additional work to an already full plate. I resisted tracking for a long, long, long time. And that’s why I want to tell you why scorecards are an important tip, trick, and hack for you, your team, and any business.
The thing we all have in common is that we are human beings with human brains. And a “feature” of our human brain is that we can perceive things that are different from what they actually are. It’s kind of like those Magic Eye posters. Mostly it just looks like static, but if you look at it a certain way for long enough, you can see 3D objects. Or at least some people can…mostly it just gives me eye strain.
This is why scorecards are so useful. They are a way to get objective information regarding activities we care about and need to make decisions on.
How to Use Scorecards in Your Business
The best place I’ve found to use scorecards is to manage myself. Yup, I use them to track my weekly activities. As with most things I resisted, once I did it, I wondered why I hadn’t done it sooner.
Having the scorecard means there is factual information to base decisions on—not just how I “felt” about my work during the week. And even better: I get to use that information to make decisions about what to do, or not to do, next week.
Certainly, scorecards can also be used for team members, overall teams, and other aspects of the organization.
Case in Point…
Recently, I was chatting with a business owner who was struggling with cash flow because there were a bunch of outstanding invoices. He was concerned about having the conversation with his finance person because he thought that she’d take offense to the implication that she wasn’t doing her job.
I asked if expectations had been set around aspects of her job: things like days receivables outstanding and timeliness of invoices. Turns out those hadn’t been defined. He could have gone into the conversation and debated perspectives—he felt like the collection was lagging and maybe she didn’t even know that was a problem or had been too busy with other tasks. Instead, he asked her to put together the policies on collection and invoicing, then had her create a weekly scorecard so that information was tracked, and if a conversation needed to be had, it could be around actual data and not just feelings.
How to Best Track Data
Scorecards can, and should, be simple. In fact, a scorecard could be just one data point. The most important thing is to make whatever is being tracked relevant to the activities necessary to achieve the desired outcomes.
It’s pretty obvious that the first step to creating a scorecard is defining the right measurables. For a finance department, it might be things like average days to pay and number of invoices past 30 days. For sales activities, it might be the number of outreaches per week, connections, proposals sent, and sales closed. Notice that this includes both leading indicators—things that we have full control of like outreaches—and lagging indicators—connections and sales closed, the places where someone else has to decide to respond or give us money.
Next, track the measurables in an easy, obvious, and shareable place. Spreadsheets work great as long as everyone can access and edit them. A better place might be in your weekly team meeting agenda or in your project management software.
Finally, create a way to regularly review the scorecards. Our team has ours in our weekly review, and we also discuss them in our team meeting.
Can Scorecards Help Your Business?
Having a way to objectively see performance is the key to useful evaluation and gaining progress. This is why scorecards are a deceptively simple trick and hack. They can show us where the effort is going and if we are getting the expected results, and if not, we have some good clues about what to change.
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