With the footy finals kicking off this week, I think it’s a perfect time to discuss scoreboards.
If your team has made it to the finals, you’re going to become obsessed with the scoreboard over the next few weeks.
You will be checking scoreboards over and over again. Depending on what it says, you will be nervous, anxious, upset, elated or ecstatic.
It's a powerful thing. It will tell you everything you really need to know: Is my team winning or losing?
I’m reminded of a quote by Warren Buffett. He said, “If you can’t read the scoreboard, you don’t know the score. If you don’t know the score, you can’t tell the winners from the losers.”
Like sport, business has a scoreboard. It’s what gives you the vital numbers that tell you whether you’re going to win or lose.
And the numbers you put up on that board are the result of every business decision you’ve ever made. If they’re not ideal, then you’ve made poor decisions.
So the only way to create sustainable business success is to measure and report your results.
Remember: What gets measured gets managed.
You need to have the right information at hand to make sound business and financial decisions. You need to know which levers you need to pull to improve your results. You can’t just make decisions based on gut feel and hope for the best.
Scoreboards give you that clarity.
However, they require work and effort to be effective. First, you must know which numbers are the most important for you to track.
You also must be disciplined with producing your scoreboards, and track your progress regularly.
If everyone on your team is committed to measuring, reporting and analysing their scoreboards, your productivity will skyrocket.
Being busy versus being productive
Productivity is nothing more and nothing less than the outcomes you achieve, the drivers moving you forward and – most importantly – the value that you create.
Scoreboards ensure you are actually working towards an outcome, and you can track your progress.
Scoreboards ensure you focus your time and energy on creating real value, not just being busy with tasks that ultimately contribute very little.
It’s not about how many things you crossed off your list – it’s about the verifiable results of your effort. It’s about outcome-based thinking and execution.
When you have a plan and when you are clear about the outcome and strategy that’s driving you forward, then you have clarity.
What would happen if each person in your business knew what the goals were and were able to track the company's progress toward them on a big scoreboard?
What if every single person in the business clearly understood how their own personal goals contribute to the business?
Key Performance Indicators
All these supporting scores or Key Performance Indicators (KPIs) measure all the activities that lead to your business succeeding.
For example, revenue, gross profit, number of leads, ‘conversion rate’ of leads to sales, customer satisfaction, employee satisfaction.
KPIs help business owners identify what is working and what isn’t working in a business and give focus to the key areas of activity that need to improve.
For example, do you change your advertising to try and generate more leads or better-quality leads?
Do you change the way you present your quotes or tenders?
Do you try to increase your average sale by ‘up-selling’ e.g. McDonalds sells millions of dollars of fries per year by asking "do you want fries with that?"
If it isn’t written down, it doesn’t exist
Do you have certain KPIs you measure? What are they? How often do you review your KPIs?
You must write your KPIs down and share with your team.
This will help your team become crystal clear on what they have to do. They will take ownership of their role and make huge contributions to your business.
It is amazing how much motivation and focus is created when every team member knows what activities or KPIs they are responsible for, and are transparent about their own results and progress.
So if you haven’t got clear scoreboards for all the important activities in your business yet, now is the time to create them.
If you do have scoreboards, make sure you review them. Ensure you are tracking all the right numbers, and that your objectives are still right.
Power to you (and Go Pies!)
CEO, Business Benchmark Group
Looking for a business coach? Find out more about the Board of Directors 12 Business Coaching Program.
Stefan Kazakis on 5 May 2018
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