Well, how do you?  Success means a number of different things.  In life, in relationships, at work… and is it personal success, team success or corporate?  Who defines this and more importantly, how do we know we are successful when it happens?  Is it that deal we just won, that new drug that just got passed, or is it employee health and retention, service-level agreements or all of these things?

If we think about the business, just how is success defined?  I think if you ask your employees what success means you might be surprised at the various definitions that they respond with.  Are they aware of the corporate goals that management is concerned about and equally important; do they know how they impact these goals?  From a management perspective, how do you align everyone around these definitions of success so you’re moving the ball forward?

This is where scorecards come in and how they can play an important role in helping you define success, provide transparency and accountability.  At the very heart of a scorecard is the definition of what you are measuring, providing everyone with a common language and removing any ambiguity.  You are thereby clearly stating that this scorecards represents the things that are important to the health of the business.

Second, it provides everyone in your organization with a clear set of goals and status on how the company is performing on these areas.  Talk about alignment!  If I know that the company is investing in area X and that this is a key focus for the company, I can modify my activities to help make improvements in this area and if I require more information, know who to contact to gain additional insight. You’ll also find that your employees will begin to create their own departmental/team scorecards, but will have some unique items that are important to that group/person.  This won’t happen overnight but as the culture of your organization changes to understand what success means, how it is measured and where the accountability lies, the alignment will begin to happen and cascade downward through the ranks.

This leads to another value of scorecards, accountability.  Having someone’s name associated with a metric is very important and compelling.  Let’s take the example that you own a metric pipeline generation, and I own the metric new sales.  My metric is yellow with the trend indicator of red with a down arrow (in this example, green is healthy, red not so much).  This tells me that my area of responsibility is trending downward and not looking good.  After further analysis, I notice that my metric and your metric are linked, and that I have a dependency on your success (cause and effect).  Your metric is also red and trending downward and has been for quite some time.  One of several things could happen - one of which is I could contact you, and understand how I can help you be successful, knowing that you impact my metric and ultimately my success.  Neither of us want to go into the next business review meeting and have our metrics shown as red and asked what we are going to be doing about them.  Rather, we can be proactive and correct any problems or issues now, allocating resources as needed and modify our plan (system of record) to reflect these changes.

The key to scorecards is not that you measure everything, but measure what’s important to the health of your business.  There are many books written on this subject and methodologies on how specific industries should implement scorecards.  Choose the method that’s right for you and even mix methodologies if that makes sense, or go completely custom and create your own.  Too many times I’ve seen scorecards with items on it that have very little impact to the business but it is on the scorecard because it was easily measured.  This gives you some additional insight that the metrics important to your business are not being recorded anywhere.  And keep your scorecards light.  A scorecard with hundreds of items on it is not easily tracked and confusing.

Remember the purpose of your scorecards - define success, create alignment, and enable accountability.

Source: Microsoft Business Intelligence Blog

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