7 ESSENTIALS How to Create an Effective Scorecard By Dr. William Hendricks
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he balanced scorecard is interpreted many ways. Some organizations simply roll their existing operational goals together and call it a scorecard. Others build from a strategic base and use it as a resource for drawing their organization into new levels of performance. When deployed effectively, the balanced scorecard structures your goals around predictive measures, directing people toward desired outcomes and not just day-to-day operations. When used to its full potential the balanced scorecard becomes a management system that aligns an entire organization around its most desired behaviors. It helps leadership emerge, and as plans unfold team members cease many of their reactive fire-fighting activities. Here are seven things you can do to help make the scorecard successful: #1 Scorecarding begins with leadership. Expect every staff member to provide leadership by defining direction and organizational focus around future growth. “Without a vision the people perish!” Leaders must lead. Managers must develop easy-to-follow plans and frontline staff must deliberately act in ways that support overall effectiveness. #2 Work from one strategy not many. To move your business forward everyone must be working toward the same target. It is easy to have multiple scorecards, each reflecting a specific department’s vision. When done in this manner, a scorecard actually can introduce more chaos and confusion. #3 Keep it simple. Too many measures are hard to track and nearly impossible to perform toward. Leaders must know their business and desired outcomes well enough to identify the “critical few” that will make a significant difference.
#4 Be prepared for change. A balanced scorecard will immediately highlight how effectively your people get along. Communicating effectively will become a necessity. A scorecard will quickly test your organization’s ability to operate as a team and it will force managers to develop a concrete communication plan. #5 Create a scorecard not a report card. Scorecards are an individual’s resource for measuring and monitoring their own performance. A report card is someone else’s standard that is imposed on performance. We are not interested in reporting on people. We are very interested in making a difference in the habitat! #6 Stay the course. Effectively maintaining the environment is an on-going process, not a onetime event. The same is true for the balanced scorecard. When you are done, you are just beginning. Performance management is an iterative and ever-changing process. #7 Remember, this not only takes time, it’s hard work. When deploying a balanced scorecard, a direct relationship exists between investment and results. Leadership must be prepared for resistance. Habits must change, people must communicate and areas must work hard to eliminate barriers and constraints. The scorecard is not a spreadsheet full of numbers. A balanced scorecard is more like the main sail on a sailboat. It catches the wind and when fully expanded it offers an exceptional resource for moving your organization where it must go.
For additional information contact: Dr. William Hendricks (800) 692-3324 or email him directly at: Bill@hendrickstraining.com