Scoreboard Best Practices: Following the Action

Whatever theme or format you choose for your scoreboards, keep in mind these best practices:

• Use eye-catching visuals to make the numbers easier to understand, particularly in the early going. A specialty-rug manufacturer decorates its board with tools and materials representing the various work groups—a braided “B” for the braiding department and scissors for the winding department. Use charts to show trends or illustrate the gap between plan and actual. If net profit is your most important “success” number, you might have three different month-by-month net-profit trend lines on your big board: a baseline level, last year’s results, and this year’s plan.
• Make boards personal—and keep them current. Whose board is this, anyway? Who’s responsible for reporting the line items? Who will be keeping score—and how often? (Daily, great answer.) Put up names and pictures. Make it plain for all to see. Employees at a manufacturing company had a blast creating an extremely effective “Bury Gary” board to track shipments. Imagine a large and humorously unflattering picture of the shipping manager—that’s Gary—above a stack of bricks that illustrates last year’s shipment volume. As this year’s shipments rise, employees place bricks on the top of the stack, covering up the picture. Says one manager, “In two weeks, we made Gary disappear!”
• Audit your scoreboards at least once a year. Your key performance numbers change from year to year, so your scoreboards should, too. But there’s a bit more to scoreboard evolution than simple annual adjustments. As people become more financially savvy, they’ll want you to include more financial data on the board. “We found out our people wanted more detail and visibility,” says CEO David Gasper of Gasper Corp. “We focus on driving installed sales, and we use that number to forecast. So we developed a trend chart showing incoming orders for all of our products. Revealing more detail when people were ready for it helped us push our projections out several months. It also helped us forecast more accurately.” Benchmark: How Does Your Scoreboard Stack Up? Benchmark your scoreboards—and how your use them—against this handy checklist.
• Scoreboards show key performance numbers that measure your company’s success. If those numbers move in the right direction, your business will achieve its goals. Questions: Are we tracking the right numbers? Can we identify other measures that are more user-friendly?
• Scoreboard numbers connect with the financials. Either the board itself contains simplified financials, or it’s easy for employees to see the linkage in some other way. Questions: Do employees know how their everyday actions affect business unit performance? Corporate performance?
• Scoreboard numbers are used. They’re tracked in weekly or monthly scoreboard meetings and are routinely discussed on the shop floor. Employees use the board to spot problems or bottlenecks early—ideally before they occur. Questions: Are we updating the scoreboard enough? Are we maximizing its value?
• Scoreboards are forward-looking. They show plan figures, actual results and “opinion” lines for line-item forecasters. Questions: How accurate are our projections? Are we looking out far enough?
• Scoreboards are eye-catching, informative, personalized. People look at them often, and have no trouble understanding what they mean. Questions: How will we know employees understand the board? Should we ask the current scorekeeper to walk everyone through it again?

We know how our scoreboards are likely to change in the future. We’re working on ways to improve them right now. Questions: What were the results of the scoreboard audit? How quickly can we implement those changes?
This article first appeared in the April 2005 issue of The Great Game of Business Newsletter. The Great Game of Business—a leading authority on collaborative workplaces, open-book management, and ownership culture—has helped hundreds of companies improve their financial performance through employee engagement and business literacy. For more information, visit www.greatgame.com.