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Posts Tagged ‘scorekeeping in business’
Monday, April 18th, 2011
Many people think that keeping a scorecard is tedious, even unnecessary. By keeping a scorecard it can help individuals and teams discover ways to change or improve processes to increase a task’s effectiveness.
 For example, in a scorecard that I use at CMOE, Invoice to Payment, we measure the number of days between when an invoice is sent to a client and the day we received payment. Most of our clients pay within thirty to forty days. However, by monitoring the scorecard daily, I noticed that some of our clients were taking to up five months before they paid the invoice. This made the performance line fall above the target goal of 35 days on our scorecard. My question was why?
What was happening?
A couple of things came to the surface when I talked with a specific handful of companies about why it was taking so long for us to receive their payments. The first response usually was that the Accounts Payable team was not getting the invoice. Were the invoices lost in the mail, or buried on someone’s desk? We began e-mailing all invoices and past-due notices directly to the person who placed the order in addition to Accounts Payable. For some reason, people respond more quickly to e-mails. Almost immediately, I started to get e-mails instructing me on how these companies preferred to have invoices submitted. Getting the invoices to the right parties made a big difference in the time between invoicing and receiving payment. International invoicing was entirely another problem. Through trial and error, we found that by simply adding bank information as a mandatory item to every international invoice, the clients were able to get payments to us in a much more efficient manner.
The End Result
Overall, the average payment score went from 58 days to 28 days in a matter of eight months– that’s Thirty days of improvement! You may ask, “Why didn’t the AR Aging report say the same thing as a score card?”
Why a Scorecard?
I worked with a biweekly report for three years in order to decrease the number of outstanding invoices. In 2010 the average still seemed high. The score card diverted my attention from the number of outstanding invoices to the number of days between invoice took to be paid. The visual reminder of a scorecard also motivated me to think about this issue on a daily basis and prompted other team members to get involved. I don’t know if thirty days will make a big difference to your company, but to our Regional Vice Presidents 30 days was huge. Improved cash flow and the use of measurements allowed them to make more accurate strategic plans for the company.
Tags: balanced scorecard concept, business scorecard example, scorecards for business, scorekeeping, scorekeeping in business
Posted in Increase Profits, bottom line performance, bottom line results, score keeping, scorecard, scorekeeping | No Comments »
Wednesday, October 20th, 2010
In a previously posted article, Scorekeeping and Leaderboards to Drive Performance, the author discussed how measuring for performance cannot build fear and negativity into employees. Driving bottom line performance with the right measurement will engage people and get people excited and committed to push performance levels. Our experience with a retailer in Columbia, SC. proved that the right incentive can create a culture ready for the challenge. In this case a large part of the company’s business plan was to increase their sales per guest visit. The effort was a grass roots effort in which each employee picked a small, inexpensive item of the week that they would promote throughout the day. At stake for the company was a goal of 2% overall increase in sales based adding an item of the week to one out of fifteen customer visits. At stake for the employees was a pair of tickets to an upcoming NASCAR event. It’s important to point out here that, for many folks from Columbia and points south, NASCAR is life.
 To keep score they painted a miniature oval on the floor in the back office. Each person got to choose a miniature car with the number of their favorite NASCAR driver. Once the dust settled over who was going to get #3, Dale Earnhardt’s old number, the race was on.
Each time an associate sold their item of the week they got to advance their car one length. The first ‘car’ to the checkered flag won.
It was a raucous week. Lot’s of fun, lots of incremental sales, and the store increased its sales for the week by over 6.5% which was an unqualified success.
In addition to making the scorecard fun by picking a game board that the team related to and had an interest in, this team captured the essence of effective scorecards as motivators. To be effective, a scorecard:
• Has to be about what I do
• Has to “talk” to me
• I Have to touch it and own it to believe it
• At some point is has to make me feel successful, whether it is hitting a target, showing improvement, or reinforncing my contribution
Simple, daily profit focused scorekeeping can be and should be fun.
Leave a comment telling us what was the most unique or innovative score keeping method you have seen in your company or another?
Or read this example of a poorly done scorecard: Scorekeeping and Leaderboards to Drive Performance
Tags: How To Increase Profit Margins, Increase Profits, score keeping, scorecard, scorekeeping in business
Posted in Increase Profits, bottom line leadership, bottom line performance, bottom line results, productivity, profitability, results based leadership, score keeping, scorecard, scorekeeping | 1 Comment »
Thursday, August 26th, 2010
Developing and testing new business simulations at CMOE is always a lot of fun. It’s a time when the CMOE staff gets free lunches, prizes, and the opportunity to meet countless new people we ask to join us. So in addition to creating or reworking our products, we create a culture of fun.
This past week I was assigned to pick up the food for a volunteer test group. I went to get Pizza and as I was standing at the payment counter, I noticed a computer screen on this wall. In big, black, block print, it read “LEADERBOARD.” I was immediately excited to see this. As I was waiting for my order to be finished, I was trying to identify what was being tracked by the “leaderboard” and how it worked. It was obvious that the leaderboard was networked with other stores and I quickly noticed that the store I was purchasing from was second from the bottom. This piqued my interest further. I decided to speak with the manager to understand how it worked.
 Me: I noticed your leaderboard on the wall; it looks interesting. It appears to be tracking certain success factors and percentages. Do you get rewarded when you hit certain levels of performance? The reason I ask is I work for an organization where we use effective management, measurements, and scorecards to drive bottom line profitability.
Manager: Yeah, it tracks just about everything in the store from the time a phone call was placed to the time the order leaves the store for delivery. Corporate can pull up data on just about anything in the store.
Me: It doesn’t sound like you believe it’s a good thing by the way you are speaking. Do you get recognized or rewarded for hitting certain levels of performance?
Manager: No, it basically indicates what you have to do as a minimum to keep from getting fired.
The manager continued to explain that this tracking system was to help employees have higher levels of customer service, reduced mistakes, and shorten production times, among many other things. While those are great focus areas, I was emotionally deflated by the way he explained it. This employee was telling me that the “Leaderboard,” this scorekeeping system, was the worst thing about his job.
If organizations are to succeed against strong competition and have higher levels of profitability, measurement cannot build fear and negativity into employees. Driving bottom line performance with the right measurement will engage people and get people excited and committed to push performance levels. By using our piles of data, managers can help employees sort out measurements that drive individual results.
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Tags: balance scorecard, Drive Business Performance, Leaderboards, rewarding teams, scorecard, scorekeeping, scorekeeping in business
Posted in Increase Profits, accountability, bottom line leadership, bottom line performance, bottom line results, results based leadership, score keeping, scorecard, scorekeeping | 1 Comment »
Monday, August 23rd, 2010
The game of golf continues to grow in popularity. I personally enjoy the game and try to play often. I love competing against myself and the game makes me be better both physically and mentally. Whether I play it on my own or with someone else, I always find a motivator to make me want to do my best. I track my effectiveness on a scorecard provided by the clubhouse. It lets me know how well I’m doing.
Some scorecards are very detailed and can inform you about the unique design of the course and about each hole so that each golfer can play to their own abilities. Scorecards in golf provide a lot of beneficial information. The score is the ultimate measurement of your ability as a golfer, but that is just the beginning. I have also seen golfers use score keeping to track not only their score, but track every single stroke they make. The serious golfers track the tee-shots ended in the fairway, how often they reach the green in regulation, how close to the hole their “approach shot” lands, and how many putt’s they make on each hole. There is plenty more, but the purpose is to evaluate and improve their game.
In the exact same way that scorecards are used in golf, they can be used in business – to improve your game! A personal score card in business is the perfect way to track an individual’s performance and contribution to the organization. Let’s draw some lines between the two.
Golf:
At the end of a golf round, I know if I am shooting above par, at par, or if I played really well, then I’m hopefully under par. If I’m under par, I’m winning.
Business:
Much like golf, at the end of the day in business a personal scorecard tells me if I’m winning and how I have contributed to the bottom line. It will tell if I’m making money for the business or if I am spending it.
Golf:
When I track all of my strokes in a golf round on my score card, I know where to focus my attention the next time I go practice at the range.
Business:
When I track my individual performance at work, I can see where I need to focus my attention the next day, week, or month in order to be more successful. If you are not tracking strokes at work, how can you improve your long or short game? You must have a personal score card that speaks to you. You need to know how many strokes you are taking to get your work done. Just as you need to know if your tee-shots are hitting the fairway. You need to know if you are hitting your goals or not. Remember, the least amount of strokes in golf means you are getting the most out of each stroke. There is the same focus in business….do more with less!
Golf:
A common phrase in golf is you “drive for show and putt for dough.” (Dough is referring to money or cash). This means the winners don’t just hit the ball far, but they also have a refined skill to make the precision shots that are so important to their game.
Business:
In business, you have to know if you are “putting for dough.” You need to know what it is that you do that creates profit for your business. Developing your business acumen and using a scorecard is critical to individuals and organizations that are looking to up their game.
Tags: balance scorecard, balanced scorecard concept, scorecards, scorekeeping in business
Posted in bottom line results, performance, scorecard, scorekeeping | No Comments »
Wednesday, December 17th, 2008
We are in a recession! For months now “that word” has been the big elephant in the room that few people would acknowledge. It is here now and there is all kinds of evidence to prove it. Have you looked at your 401k lately? How is your stock portfolio? Does your bank account have more money or less money in it these days? Are you feeling the pinch? Many people around the world are. Hey, at least gasoline isn’t outrageous anymore.
 Like many of you, I have been intrigued by the bailout programs that have been offered to many of America’s largest companies. “The Big Three” stood in front of Congress in mid- November and pleaded for $24 Billion in loans. I guess the “poor house” for the Automakers is coming even sooner than they thought. Just two weeks after Automaker CEO’s botched their first meeting with Congress, they have the courage to ask for 10 billion more and increase the total bailout request figure to 34 Billion in low interest loans.
Even large cities across the U.S. like Phoenix, Atlanta, and Philadelphia are crying poor. Governor Schwarzenegger says the State of California needs more than 11 Billion to keep the State from bankruptcy. We just haven’t seen anything like this since the 1930’s, and frankly it is a little scary that the world economy is in such poor shape.
Many of you working in sales likely have heard from your customers that they are cutting back, spending less, being cautious, and looking for ways to be more profitable. I have asked myself how can my organization help companies cut back, spend less, be cautious, and most importantly be more profitable?
Perhaps there is a way for organizations to be more profitable right now. Could there be a process that helps organizations measure performance that ties directly to the bottom line? A process, in which all leaders give appropriate feedback and coach members of the organization about their performance, that leads to dollars added to their bottom line. Keeping score is nothing new. Those of you who play games or play sports know exactly who the winner is and who the loser is by keeping score. This same scorekeeping principle is easily applied in business as well. Many organizations have embraced the concept of keeping score. By helping each employee understand when they are winning or losing, organizations have the ability to create an environment of accountability, responsibility, and focus. Additionally, it is not enough for leaders and employees alike to know if they are winning, losing, or stagnant. Leaders in organizations must assist all employees to win, to make a contribution to profit, and to improve bottom line results by frequently talking to people about performance. Yes, you read this right. Leaders must engage their employees not just once a year in a performance review, but regularly about winning and losing.
A combination of leadership principles coupled with scorekeeping does provide an internally generated bottom line “bailout” created by the employees and leaders working together for bottom line results.
Tags: avoid bankruptcy in your business, bailout plan for business, bailout plan for your business, scorekeeping in business
Posted in accountability, bottom line performance, profitability, scorecard, scorekeeping | No Comments »
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