Six Weeks to Success: Clear Roles & Responsibilities
Scorecards, Not Just for Golf Anymore
The Role of the Manager in a Scorecard
When Chief Executive Officers and other key leaders look at their organization’s performance, they expect a clear picture. They want metrics on which to base decisions and track progress toward long-term goals. However, in today’s world of relentless demands for accountability and rapid changes in technology, many companies struggle with how to apply the right level of detail in their organizational scorecard. A single scorecard may cover three or more objectives, targets, KPIs or key performance indicators (KPIs). Plus, as the CEO and other top leaders take an increasingly active role in guiding strategy and monitoring progress toward goals, the need for greater clarity has grown exponentially.
Good organizations ensure that every employee has a scorecard aligned to the major mission and vision of the organization. Great organizations use these scorecards to show the impact of the individual on the organization to increase engagement, and use these as an opportunity to annually review roles and responsibilities and build learning and stretch opportunities for each employee.
In turn, the question is not whether you should have a scorecard but rather what kind of scorecard works best for your organization, as well as the best ways to implement a process. In this article, we explore the pros and cons of various types of scorecards so that you can make informed decisions about how to implement yours most effectively.
Start Org-Wide
Creating an org-wide scorecard helps the CEO better shape their strategic decisions by providing transparency into what is happening in their organization. They can also use quantitative data to make educated business decisions, like where to invest time and money. It’s also helpful when it comes to communicating with stakeholders, employees, customers, etc.
Building a meaningful organization-wide scorecard can be complex. With too much information or too many metrics – it becomes increasingly difficult to visualize trends or gaps in performance. Companies that have more than one KPI per metric (such as differentiating between operational results) can be difficult to understand at times because they don’t offer clear insights on how a metric relates to full picture.
By investing time and energy into an organization-wide scorecard that sets a clear vision of excellence, we set the foundation for strong scorecards to develop clarity around roles and expectations for teams and individual employees.
The KPI Scorecard
A KPI (Key Performance Indicators) scorecard is a key part of performance management. The name is derived from the fact that it focuses on key performance indicators (KPI) that supports your organization’s strategy through individual and team contributions. This type of scorecard can be helpful for organizations with a limited number of key metrics that they want to track over time to measure progress and make decisions based on trends and patterns.
Many organizations are investing in this type of scorecard because it provides greater clarity around the key indicators that drive their business strategy, and thereby, creates clear measures for team and individual contributors. By ensuring alignment between what senior leaders expect from the organization and what their employees, customers, and partners experience, employees are more likely to be engaged and operating towards excellence.
The downside, however, is that without multiple metrics to provide context for understanding how individual areas align with strategy, change becomes difficult for leaders to gauge at a high level. For example, if your organization invests in improving talent acquisition costs and more applications come in but quality of applications doesn’t shift, it can become difficult to determine whether changes are working towards overall talent strategy. In addition, the lack of depth may make it difficult for senior leaders to identify issues quickly, which can create a culture of waiting for aligned data instead of pivoting as situations arise.
The Target Achievement Scorecard
Used by organizations to measure and review the progress against a strategic objective, Target Achievement Scorecards are comprised of measurable, quantifiable results on which decision makers can base their decisions and track progress toward long-term goals. The target achievement scorecard provides a clear picture of overall performance and helps the organization take corrective actions when necessary. Target achievement scorecards can be difficult for management teams to work together on because each individual role will have its own set of indicators, which can make it hard for management teams to collaborate effectively during periodic reviews.
A balanced scorecard (BSC)
Developed by David Norton and Jim Kouzes in 2001, the balanced scorecard is one of the most popular ways to approach clear measures within organizationsThe balanced scorecard consists of four key areas: 1) Strategic objectives, 2) Key measures and indicators, 3) The plan to implement, and 4) Feedback loops.
The BSC is a versatile tool that allows you to assess success and make changes as needed without compromising your organization’s long-term goals or direction. One key benefit of the BSC is that it allows organizations to have a clear understanding of how things are going on an ongoing basis, which can reduce problems with miscommunication between departments, teams, and other stakeholders. The BSC also provides for transparency among employees about individual performance and progress toward achieving goals while maintaining an eye on trends in performance over time.
Natural Growth
For your scorecard to be effective and add value, it must be one that is natural and organic. It should have the desired impact on organization’s performance from the time it’s first implemented.
For example, you can use a scorecard with a single metric to track progress in key performance indicators (KPIs) such as fundraising, academic impact, or retention of staff.
On the other hand, a natural growth scorecard may include KPIs that are less performance-driven but more strategic. These KPIs include employee engagement levels and sentiment analysis of market stakeholders. A natural growth scorecard is important because it allows leaders to monitor changes in metrics over time, which can help an organization to know when a change is necessary or whether they are making progress toward their long-term goals. This type of scorecard also helps leaders understand where they currently stand compared to competitors so that appropriate action can be taken if needed.
One way to create a natural growth scorecard is by collecting data from various sources over time. These data sources could include surveys completed by employees, customer feedback, or even financial statements for comparison purposes. The data collected should then be analyzed and used to create your scorecard based on what matters most for your organization’s success. All of this takes time and energy from key stakeholders, but this work is critically important in realizing a vision of clarity for the organization, teams, and individual contributors.
Bottom line
To be most effective in shaping the work of an organization, scorecards should be designed by leaders who have a clear view of what matters most to them and what excellence means within each team in the organization. By building objective, direct, and data-driven indicators for organization-wide, team-wide, and individual scorecards, employees build a strong sense of how their work impacts the organization as a whole and are more likely to engage actively in their work and with their teammates.
Join us Wednesday for a case study of Scorecards in action at a group of high performing charter schools in Denver, Colorado!