About This Talk
This talk is by Jeff Meade and was recorded on September 28, 2020. You can learn more about Jeff by visiting:
- Jeff’s website: https://www.themeadecompany.com/
- Jeff’s email: email@example.com
- Connect with Jeff on LinkedIn: https://www.linkedin.com/in/jeffmeade
Also mentioned in Jeff’s talk:
03:05 Why You Need a Business Scorecard
07:22 Building Your Business Scorecard
22:18 Rules of Thumb
25:03 Brainstorming Your Scorecard
29:55 Scorecard Example
What Is a Business Scorecard?
A business scorecard is a collection of numbers that can quickly tell you how your business is doing.
According to Jeff, it provides an objective view of how your business is doing and what you should be doing to improve it.
Why You Need a Business Scorecard
How did your business do last week? Most business owners have a hard time answering this question. Most business owners are clear on what happened last quarter or last year, but often don’t have a handle on what’s happening in real-time.
As a result, you may not be sure what you need to do right now in order to reach your goals – or as Jeff says, you need to know what to do in order to “win the week.”
The right numbers signal when to start or stop an activity and keep your business pointed in the right direction. This can tell you things like how to invest your marketing resources, when to hire, or how to make other meaningful changes in your business.
Building Your Business Scorecard
Focus on the week rather than the quarter or year because there are lagging and leading indicators.
A lagging indicator is something like revenue or profit and is the typical focus of most firms. The problem with focusing on lagging indicators is that they won’t tell you if you’re doing the right things today – or this week – in order to increase them in the future.
Leading indicators are things like business development, marketing, and project efficiency. These indicators can take months to turn into your revenue and profit because the drive the ultimate results you experience in your business.
Here’s a shortcut: leading indicators are forward-looking, and lagging indicators are backward-looking.
Start thinking more about your leading indicators when it comes to building your scorecard.
There are three rules of thumb to develop your scorecard:
- Weekly activity-based numbers you can track on a weekly basis
- Your scorecard helps you spot trends
- Choose numbers that help you anticipate problems
Brainstorming Your Scorecard
Just remember, “the numbers put you in the right frame of mind.” When you’re ready to begin brainstorming, here’s what Jeff recommends you do:
- Brainstorm with the leadership team and come up with numbers you want to track.
- Identify categories you want to track.
- Identify the person responsible for delivering the number.
Think about the numbers that would matter the most for creating and running the business you want. If you want to brainstorm, bring out the whiteboard – or even a virtual whiteboard like Miro, or a Google Doc – and work with your team to capture everything that matters.
Here are some questions you can use to brainstorm what goes on your scorecard:
Err on the side of capturing everything that matters, and start to narrow down to just the important numbers when you create your own scorecard.
Business Scorecard Template
As an example of what to track, here’s a scorecard Jeff uses at the beginning of his work with most of his clients:
Eventually, you should get to a place where everybody in the company has a number that they’re responsible for. This will lead you to a place where anyone can answer the question “how was your week last week?” with a specific number that’ll help move the needle.
Weekly Review Process
Once you have your scorecard, Jeff recommends you do a weekly review of your scorecard. Each line of your scorecard is one activity you measure. Each activity should have a single owner who can say whether they hit a number and give feedback on why or why not they hit it.
As you continue to run this review process, your team will quickly understand what matters most to the business and get through your weekly reviewer faster with practice. Initially, it may take you 45-60 minutes to conduct this meeting. Eventually, you should get through it in 30 minutes.
If these meetings are running too long, they’re not serving the purpose of acting like a scorecard. Be sure to advise your team that the purpose of the scorecards is to quickly assess your weekly progress and what needs to be done to improve. If these meetings stretch too long, there’s a good chance people are avoiding accountability!