Monday 15 May 2017

The Art and Science of Scorecards/Scoreboards and Meaningful Metrics Matter Most

The Balanced Scorecard book by Robert S. Kaplan and David P. Norton, published 20 years ago, put forward a key premise for creating measurements of performance that are meaningful for people, that of measuring the intangible being just as important as measuring the tangible. I value the book and it's insights.

I've observed a myriad of 'balanced scorecards' in operation in businesses. Sadly most fail because of too many moving parts.

Suggested solutions

An edict that was prevalent in my early days in business (and still is in some workplaces today!) was the concept 'what gets measured gets done.' Ruth Henderson, one of the Founders of Whiteboard Consulting Group Inc., makes 4 great recommendations about this concept, and meaningful measuring in general, in a Forbes article here.

Ruth's recommendations:

1. Understand the difference between a measure and a metric.

2. Understand the difference between an Outcome metric and a Performance metric.

3. Figure out what you want to know before you start measuring things.

4. Design your report to tell a story.

My suggested solutions are to embrace Ruth Henderson's 4 recommendations in your own best way.

Begin by ensuring that you fully understand the difference between measures and metrics, then start with number 3., then focus on performance metrics (lead measures), and finally excel at number 4 i.e. visuals that tell a story.

My blog post here will help you with lead measures in particular.

A strong recommendation is that you work with individuals and help them to focus on no more than 3 lead measures per quarter that are in alignment with their personal goals as well as those of your business.

The founder of Buy One Give One Masami Sato's 'Impact Score' is a fine example of the power of a visual to tell a meaningful story.

Interesting take on lead measures and visuals (as below) from Verne Harnish here.

The most simple yet profound way to determine what features on your scorecards or scoreboards in your business is to ask people what’s meaningful to them and how best could this be visually represented for them?

Recently as part of helping a client to create visual scorecards I asked several people what would they most like to know about their performance?

A common answer was just knowing for certain whether or not other people truly felt they were delivering on their promises.

Obviously this could be visualised in many different ways. There’s no limits to human creativity.

Your turn!

Who will you become? What will you do next?

Like some help? Give me a call. My number is +61 418 807 898.

Be remarkable.

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