Business scorecards change and evolve over time.  On average, a scorecard is revised six times before it is meaningful and measuring the right metrics.  Every 90 days a scorecard audit needs to occur. Here are three tips for conducting an audit and making the necessary adjustments.

1) Check Trends
Check for any trends indicating a need for goal adjustment. Metrics which are green for more than 90 days provides an opportunity to raise the target and drive continuous improvement. Conversely, if any metric is red for 90 days with a valid corrective action plan in place, consider breaking the metric down further to determine underlying causes.

2) Corrective Actions and Impact
Can a corrective action improve results?  If the team is unable to impact the metric with a corrective action plan, discuss whether or not to keep it on the scorecard.

3) Ask Questions
- From where did the metrics come?  
Make sure it’s tied to organizational strategy and priorities.
- Do we have too many metrics?
Too many causes confusion and too many things on which to focus.
- Is the metric providing meaningful data?  
You may need to revise, replace or remove the metric.

by Connor Jordan

With the ringing in of a New Year, many leaders enter January with a refreshed sense of urgency and renewed outlook on performance expectations for the upcoming 12 months.  This opportunity to get started with a clean slate fuels their optimism and gets their fist-pumping, motivational juices flowing.

Same Old Challenges

Unfortunately, for many leaders today this boost of energy fizzles out by mid-afternoon of their first day back.  Their grand ideas and big plans are met with the same old challenges they faced before; obviously, something needs to change.  Understanding this, many leaders attempt to tackle the New Year /old challenges conundrum with a shiny, new, hot-off-the-presses scorecard.

Free Access to video of “Creating Your 2012 Scorecards”

First, they sift through the ashes of last year’s performance targets so they have a starting point for this year.  Next, they look at last year’s actuals vs. goals to see how far they were off target.  Finally, they search for any identifiable trends and attempt to pinpoint where it all went wrong.  Armed with this information, they build a new scorecard for the new year; the idea being that a new scorecard will bring better results this time around.

A New Scorecard will Fix Everything, Right?

So, this year all you need is a new scorecard and things will be different – right?  Well, not exactly.  Leading organizations understand that ripping and replacing a scorecard year after year doesn’t yield the desired results.  So what do you do?  Rather than going with a complete do-over, simply leverage what you have and make some modifications.  As senior leadership makes adjustments to the organization’s overall strategy you can make tactical, team-level adjustments to stay in alignment.  You can probably stick with at least half of your previous metrics.  You can then add a couple metrics, redefine a couple others, and even take a couple metrics off the scorecard and… presto-chango, you have a “new” scorecard.

When revamping your scorecard, keep in mind that a) it will never be “perfect,” and b) a scorecard should and will change over time.

Common Business Scorecard Mistakes

1 – Tracking Too Many Things – simply because you can measure something does not necessarily mean that you should.  Metrics need to be within your span of control, fall within mission-oriented focus areas, and have meaning and impact on activities. The most effective scorecards typically have between 15 and 18 total metrics.  A rule of thumb to follow – if it takes you longer to compile the information than it does to review it, then you are probably tracking too may things.

2 – Random, Infrequent Review – to get the most out of your scorecard you need a systemic approach to its use and review.  You should have established communication guidelines and a standard frequency for review to allow all teams at all levels to maintain a common “battle rhythm of communication.”

3 – Failing to Audit and Adjust – great organizations review their metrics every 90 days.  This audit process gives each team an opportunity to maintain scorecard relevance.  Everyone will have a common ground by which to make adjustments to metrics, targets and focus areas.  Cross functional teams will also spread best practices and drive Continuous Improvement as the audits cascade down the org chart.

Continuous Reinvention

Even the most efficient organizations find that it takes, on average, 6 audits (with subsequent adjustments) to achieve highly effective, meaningful scorecards.  This means that as part of your overall scorecard strategy, continuous tweaking and best practice sharing have to be part of the mix.  So, if you started with a totally new scorecard system today, you wouldn’t expect it to be “right” until approximately Q3 of 2013.

The recommended approach to creating a “new” scorecard would be to use what you have, make proper adjustments, and implement supporting audit processes to be sure that all scorecard improvements take place when needed, not only when you pin up a new calendar on your wall.

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Beginning in 2009, BAE Systems in Anniston, AL leveraged their transformation to a Process Based Leadership manufacturing environment by installing and using PBL ScoreCard to run all their site-wide communication.

With PBL ScoreCard, each Home Team is able to follow the same standard meeting agenda, which covers a review of corrective actions, a review of the team scorecard, employee recognition, and a pass-up/pass-down process to distribute important information between all teams on all levels.

As a result, BAE Systems Anniston has reduced their number of meetings as well as decreased the amount of each time a meeting takes to complete.  For example, the Senior Leadership Team has cut their weekly meeting down from 2 – 3 hours to approximately 60 – 75 minutes.

Approximately 18 months after implementation, an employee survey confirmed the time savings as an increase of 30% of survey respondents agreeing that meetings are now more effective and quicker than prior to the implementation of PBL ScoreCard.

For fifty years, J&J Industries has met diverse flooring needs by producing an extraordinary range of commercial carpets and other floor coverings. They have the ability to cover a variety of price points while pushing the boundaries of texture, color and performance.

J&J Industries began using the PBL ScoreCard® software in early 2007. This organization fully enjoys the use of the common business language provided by the software. From the CEO’s team down to the IT and maintenance teams, the software brings J&J Industries the information that brings focus on measuring those things that are important to the business.

Doug Brown, Manager, IT with J&J Industries, states, “If a team has a metric which is red, that metric rolls up two organizational levels to our VP’s meeting. There are three separate meetings which will view this red metric. They will hear the explanation of why that metric is red and actions will be determined. Whether it is a big problem or small problem, focus is given to those areas that need attention.”

With more than 800 employees, J&J Industries is a complex organization which requires accountable business communication systems which are accurate and dependable. “I’m particularly pleased since our upgrade to the newest release of PBL ScoreCard® – this is a company that actually listens to our feature requests and quickly integrates them into their software. It is a refreshing change from the Microsoft’s of the world,” said Brown.

Doug Brown, IT Manager with J&J / Invision

Brazeway is the world‘s largest producer of aluminum evaporator coils and a leader in extrusions. Named one of Industry Week’s Top 5 Manufacturer’s, Brazeway has continued to be among the few of the best in all aspects of manufacturing. This privately owned company attributes its success to their strong commitment to innovation, customers and employees.

CSI began working with Brazeway in 1994 and continues to be a valuable partner to Brazeway’s continued growth and success. Since beginning the CSI initiatives, Brazeway Inc. has published scrap reductions, quality defect reductions, production efficiency gains, and increased employee morale. Employee teams report business numbers to the plant manager and staff on a weekly basis and develop immediate corrective actions when goals are not at target. Teams continually audit processes to ensure sustained success, as processes and business results are reflected in the gain sharing plan.

Brazeway began using CSI’s PBL ScoreCard® software in the 4th quarter of 2007. The software has allowed them to communicate their business goals from top to bottom, bottom to top and horizontally across the entire organization. With over 1,100 employees in three plants in the US and two in Mexico, the software has significantly contributed to the organization’s standardization of Key Business Focus Areas (Growth, Customer Service, Employee Performance, Employee Satisfaction and Continuous Improvement.) “Information is reported and communicated in real time,” declares Amber Dile of Brazeway. “The software has totally re-energized our teams’ interest in the scorecard process.”

When Brazeway personnel conduct team meetings, each team is accountable for issuing an action for any metric which appears “in the red.” Action items are the first and foremost item on their agenda. Dile stated, “I think the great visuals in red, green and yellow encourage teams to complete their actions. Each team knows that all levels of leadership have access to the visuals on their scorecards. No one can hide or deny actions which are below standards.”

Amber Dile of Brazeway

Ken Burton, Jr.  Manatee County Tax Collector

Manatee Florida Tax Collectors are independent constitutional officers duly elected by their fellow citizens and taxpayers in their county of residence. Tax Collectors deal with a variety of duties and responsibilities and provide a myriad of important public services that allow them to exercise valuable leadership roles in government. They direct, plan, organize, budget, set and implement policies which affect not only their local government, but also reach the state level as well.

Approximately one year ago, PBL ScoreCard® software brought significant accountability to the Manatee County Tax Collector’s office. “We use every aspect of this accountability system. That is the beauty of the software. The system forces you to enter who is doing the action item and also requires a due date. There are no open ended discussions. Communication is top to bottom and bottom to top every week,” states Ken Burton, Jr., Manatee County Tax Collector. “This software allows me to see how my office is doing at anytime and anywhere.”

Burton’s office is operating in a more efficient and focus manner. Ken said, “The people at Competitive Solutions, Inc. who work with the PBL ScoreCard® software understand the methodology of how the system should work with our scorecard. The staff can easily walk anyone through issues. Once the software was up and running, we have had no problems.”

Sandy McIntosh, Director of Training, The Kroger Company