Effective Execution Using Key Performance Scorecards
Some common themes we observe or hear from clients and prospective clients about their company:
- a lack of accountability for results
- organizational responsibility and ownership is not well defined
- poor communications; there are often department silos or walls that reduce communication
- departments are not aligned throughout the organization
- goals and objectives are poorly defined or linked to the strategic plan
All of these observational symptoms separately or in aggregate, negatively impact the company’s ability to effectively execute the plan. This is not new or ground breaking information, but failing to recognize and adequately address these issues can result in continued weak performance and reduced results from other improvement efforts. These are foundational issues that we must always be aware of so that we can successfully execute higher level goals and objectives. Fortunately the remedy is also foundational, you must develop key performance measures with feedback loops in place throughout the organization.
Everyday life is replete with examples of the importance of measures and feedback. Carpenters use a tape measure to cut boards to the proper length and you may have heard the axiom “better to measure twice and cut only once”. Adjusting the site for a rifle scope requires distance and accuracy measurements as feedback. Ever go on a diet to lose weight and not use a scale to measure your progress? In fact a current new tool for health management (weight loss) is to enter your daily meals and snacks into a diary application on your smart phone and it will help track your caloric intake. Add a “step tracking” application and you can monitor your caloric burn rate so that together you can predict and manage a caloric burn rate that exceeds your intake rate. Ultimately you still need the scale to measure results (weight loss or gain), but now you have added some “key measures” that serve as leading indicators of good performance. Simple, straight forward, we all get it, so why don’t we do it at work?
Very recently, Supply Velocity added three new clients for a variety of issues to work on, but I am happy to say they all agreed to implement Key Performance Measures as the foundation to ensure everything else they work on will be successful. We have developed a program we can customize for you to help lead you through the establishment of a robust Key Performance Measure program or you can of course do it yourself. Even if you have some measures in place or you use dashboards, perhaps they need an update or a renewed focus. Whether you are starting from scratch or you want to tune your efforts, the following tips should help.
- Start at the top of the organization and establish up to 3 strategic objectives for the organization to align to and drive to achieve.
- Still at the top of the organization, establish 5 or fewer Key Performance Measures that can objectively measure leading indicators of your progress to your strategic objectives. Put these in the form of a simple to understand, 1 page scorecard.
- Repeat steps 1 and 2 for each department, using the top of the organization’s objectives and measures as an alignment guide.
- Bring the organization with their scorecards together to discuss, negotiate and leverage constructive conflict for clarity, alignment and buy in.
- Establish venues, monthly staff meetings, weekly standing meetings, project review meetings, etc. to leverage the scorecards and hold accountability for results, good and bad.
- Throughout this entire process, practice the following and try to build these ideals into the culture of the organization:
- Manage, focus and make decisions using the scorecards
- Use data (scorecards) to reduce ambiguity
- Be transparent with the data and provide easy access
- Be consistent and fair with feedback
- Be timely and regular with feedback
In football this would be considered basic blocking and tackling. You must have basic fundamentals in place before you can try something more complicated like a double reverse.
Everything described above is a means to an end that is summarized below as the 4 Musts of Execution. How well are you doing versus these 4 statements?
- Mission/Objective/Purpose MUST be clearly understood & bought in by stakeholders
- Results MUST be measurable
- Stakeholders MUST understand how they impact or are impacted by results
- Organization MUST be aligned and accountable for results