Mar 31, 2010

How to leverage scorecard in business?

To effectively use scorecards in our business, we could look at how it works in other areas of our life.

As you know, scorecard is a simple tool for measuring performance and giving feedback. For example, a school progress report shows performance against maximum marks; it also shows trends. It provides student, teacher and parent an overall idea about the performance and it prompts them to take any corrective action.

Take the case of scorecard for a game. It excites and energizes the players as well as the audience.

Let us explore some of the attributes of a scorecard that can bring certain powers to you.

The Power of Focus: As you know, focus gives intensity. A 40W bulb is just sufficient to illuminate a small room, but when the beam is focused, it can illuminate objects several hundred meters away. If you have taken a ride in ECR road from Chennai in night, you would have experienced this: you can see the road illuminated kilometers in front of you, reflecting the beam of your car headlamp.

Something similar happens with scorecard when we measure performance against the goal that is important to us. We may do hundreds of activities, but scorecard brings focus to a few critical measures and keeps our mind focused on the targets and the critical things to do.

We are aware of the 80/20 rule or the Pareto principle. By this rule you will find that 20% of your activities will account for 80% of your results. By having key action items (or strategic initiatives) against your goals, the scorecard can help you to get focused on those ‘vital few’ activities that will account for most of your results.

The Power of Leverage: When you leverage, you give a small input and generate a large force or output; for example with the fulcrum of a lever, you can magnify the force. Or with a small signal input at the base of a transistor, you can control a large power flow. You would have found that when you give feedback to your team with a measure or scorecard as a basis, your influence is far more than otherwise.

The Power of Alignment: Several interesting phenomenon we can observe, when things are aligned. When ions are aligned, we get superconductivity and it can produce extraordinarily strong magnetic field. When light waves are ‘aligned’, we get Laser. Think of the magnificent opera, where several artists play their role in alignment; or a symphony orchestra, where thousands of musicians play their instruments in harmony. Another example is the Olympic opening/closing ceremonies where the participants perform in unison.


A popular event in Kerala is ‘Snake Boat Race’. It is amazing to watch the rhythm, the coordinated hand movements of about hundred oarsmen and the synchronized chanting of singers. Great excitement is generated when people align to a common goal (video of a boat race).

He whose ranks are united in purpose will be victorious.” – Sun Tzu, ancient military strategist.

Scorecard when reviewed by all stakeholders has a huge influence on team/business alignment.

The Power of a Written Goal: There is something magical about writing things down. It has been found that people commit themselves to their goals when it is recorded. Scorecard is a place where you have your goals in writing.

The Power of Feedback: Our perceptions can sometimes be biased by recent events and decisions based on perceptions can go wrong. Scorecard showing trends eliminates this bias and can give new insights that can lead to better decisions.

The Power of Dashboards: We know what a dashboard means to a car or a cockpit to a plane. I am sure you will not embark on a long journey in a car that is not having a dashboard.

Once you automate your business scorecard and incorporate the features of dashboards such as status, alerts, drill downs, you get a powerful environment to manage your business.

The Power of Filtering: One problem that happened with business process automation or ERP implementation is that there are hundreds of reports available to track. We are bombarded with mountains of information every day, thanks to the advancement in technology and communication. However, our natural capacity to process info remains more or less the same. So we need effective filtering mechanisms for the information deluge. Scorecard/dashboard can act as a great tool that can filter info and alert you for taking action.

By understanding the attributes of a scorecard we will be able to leverage it better in our business. Scorecard is a simple and powerful tool that you can use to provide feedback, to focus, to align, to leverage, to communicate, to motivate, to inspire, to manage, to improve, to engage and to ensure certainty of success in business.

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