Your Goals Are Worthless...Without a Performance Scorecard

In the first stages of learning how to drive a car, most people have a timid alertness about them. You've probably seen them: they are hyper-observant, scanning the horizon in search of something to indicate danger. If you think about it, there are hundreds of things to pay attention to, and these newbies want to ensure they don't over look a single one.

But over time, they relax. These tenured drivers get more efficient scanning their surroundings for danger. They shift into a comfortable confidence and maneuver the car in ways they never would in the early days.

What's happening? How does a driver develop from fearful, hyper-observant to being comfortably confident? 

Two things. First, with repetition the driver learns how to make the car perform under her command. Second, she can process all of the inputs to categorize which are dangerous, which could be dangerous, and those that are harmless.

Imagine, on day one of driving, the driver spots a dog bounding in her direction. She would slam on the brake, slow down to a crawl, and proceed cautiously. Never mind the fact that the dog is 100 feet from the road and playing with its owner!

Fast forward 12 months, and the same driver would be able to recognize the full context of the situation; she might take her foot off the gas, check her mirrors for vehicles behind her, and keep track of the dog as well as the car starting to back out of a driveway, a stop sign and a pedestrian waiting to cross the street 100 yards ahead.

Small business leaders develop similar skills. Just like someone learning to drive, small business leaders also have hundreds of things to pay attention to and they can be fearful of overlooking any one of them. And, just like the new driver, paying attention to all of them will cause them to drive slowly, cautious not to make any errors. And they make no progress.

So how can a small business leader move from timid alertness to comfortable confidence? They need a system to determine what to pay attention to. The tool for the trade is a performance scorecard.

The most effective scorecard includes five to seven metrics that can be reliably tracked and influence the company's key financials.

When choosing the right metrics for your scorecard it's important to make them something you control. Many small business leaders will track sales and think that's their scorecard. This is deceiving because knowing your sales information is critical, but it does little good to make it a metric on your scorecard. The reason is because sales is a lagging indicator of performance. A better metric for your scorecard would be tracking the number of sales calls you make every day.

Your scorecard metrics need to track and encourage behaviors you want. In the example of sales calls, you want to encourage quality sales calls. This means you might not only track the quantity of sales calls but also the quality. What conversations did you have? How long was the meeting? Where is the prospect in the sales funnel? Track this information.

The scorecard needs to be easy to maintain. If it becomes too complex to update or too complex to understand, no one will use it. Even if - or, especially if - you create it!

The scorecard should be visible to everyone that contributes to the metrics that are on it. If you have sales and operations metrics on the scorecard, your sales and ops teams need to see it. It should be a prominent piece of your weekly meetings. Everyone should know exactly where their efforts are going.

Your scorecard should not be rosy all the time. It's not a performance review for you or your team. No, it should help focus your energies on areas that need help and are important for the business. You should have some areas that need to be fixed because the performance is weak. But you should also have others that you need to take advantage of because the performance is strong.

There are a lot of ways to build a scorecard. The form doesn't matter much. What does matter is that you use it! And be patient. Build your scorecard and give it a chance to work. And if it's not working, retool it. Don't be afraid to try something and refine it as you go. Just be sure you use it.


Armour Martin Consulting LLC provides premium online content to help business leaders grow confidently in their business and see results in 90 days.

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