A scorecard gives your organization a current snapshot of various performance metrics compared to your goals. A scorecard is a great tool for your organization to make strategic, data-driven decisions. A scorecard also helps you monitor and manage how parts of your organization performs. All of this improves your ability to achieve goals.
Each team member may have their own scorecard. The items tracked on an individual scorecard, if set up correctly, can help team members know how their contribution helps the organization as a whole. They can monitor progress towards their own individual goals as they relate to the organization’s goals.
The information that goes on a scorecard should be available from sources within your organization, your social media accounts, website statistics, financial reporting, CRM, etc.
Why Have A Scorecard?
By gathering information available throughout your organization and sweeping it into one place, the raw numbers, trends over time, and difference calculations can paint a clear picture of the health of your organization. Your team can see at a glance how the group is doing, what corrections need to happen, and what decisions need to be made.
A scorecard is THE PLACE to sweep the key performance indicators that show how you’re doing and where you’re going.
To expand more on the section above, you would want a scorecard to help you keep an eye on the most important key metrics across your business. A “balanced” scorecard usually contains four sections. Within these sections, you typically want to monitor metrics that help you focus on both stability and growth. You also want a mix of leading and lagging indicators. We’ll dive more into these topics in a minute.
You would typically want to monitor your current account balance.
The number of current customers or clients (or members if you’re a non-profit organization) tells you something about the health of your organization.
Your internal documented processes, key activities and resources that you use to deliver value to your customers are examples of metrics you want to track.
Having the right people, sitting in the correct seats, is critical for the health of your organization. Each person in your organization needs to manage to key metrics. Each person also needs to continue learning and growing. This is where you would document and track progress your employees make towards their training goals, along with their performance goals.
I’ve heard of a “Balanced Scorecard”, So What Is That?
So far, you’ve seen that a scorecard contains financial, customer, operations, and people metrics. That’s one type of balance that helps your leadership team see a holistic view of the entire organization.
Another way to find balance is, as we mentioned above, is by tracking both “stabilizing” metrics and “growth” metrics in your organization. Within the four sections, look for a balance between metrics that help you focus on 1) reducing or eliminating waste, like financial expenses, and 2) metrics that help you focus on increasing and growing the organization, such as income and clients.
The third way to add balance to your scorecard is to incorporate a balance of both leading and lagging indicators.
The last building block you need for your balanced scorecard are key performance indicators, or KPI’s. We’ve talked a little about the things you will want to measure. These metrics (what you’re measuring) will come together into one document or webpage, or internal communication of some sort.
Within each of the four sections of the scorecard, you’ll want to identify high level strategic objectives. Within the financial section, for example, you may have two strategic objectives like “reduce expenses” and “increase revenue”.
For each of the strategic objectives, you’ll want to define at least one SMART goal.
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