Monday, October 7, 2013

Do You Keep Score In Your Company

Do you keep score in your company? Do you know the score on a daily basis or do you have to wait until the end of the month for the books to close on the previous month? What does it cost you to have to wait to know what the score is?

And what about your people? Do they know what the score is? Do they know which number is most critical and where that number stands today? Or are they standing in center field with no scoreboard (often called a dashboard in business) to look at, and no effective way to ask for that information?
If you were to put up a scoreboard in your office, store or factory, what's the one key number that would have to be on it? This may change over time, but for this quarter or this year, what is your critical number? Is it inventory turns per year, or profit per transaction, or transactions per hour or what?

Back to our baseball field, they don't just track the score, do they? They also display historical data (how many runs were scored each inning of the game we're playing now), the number of hits and errors for each team, and current status (balls and strikes for the current batter, the number of outs, and which bases are occupied). Some scoreboards also give you the name of the pitcher and batter, and perhaps who's next up to bat. The center field scoreboard also displays many other bits of information, like the status of other games being played the same day.

What's analogous in your business? Besides that one critical number, what else might be useful for people to have within their line of sight?

There's one other type of dashboard that successful companies are using, as a management tool. This dashboard (scoreboard) shows a row for each of the company quarterly priorities (rocks) with the name of the priority and the name of the accountable person. Each column has a date, and each quarter with therefore have 13 columns for the 13 weeks.

Each week, the person accountable for that priority (rock holder) designates a color for that priority. If the priority is numerical and we're on track, that's green. If we missed but are close, that's yellow. If we're red, that means we're in the unacceptable range. 

For a milestone based priority, if we've met the milestones for that week, that's green. If we've fallen a bit behind but think we can catch up without a major change or reallocation of resources, that's yellow. If something major needs to change in order to get back on track, that's red. 

If the priority isn't so easy to define, we should talk more about how to set good quarterly priorities, but in any case, the rock holder can simply give a color based on their own prediction about where that priority will end up at the end of the quarter. There's no incentive for someone to give an overly rosy picture, because if they're showed green for 12 weeks and then turned up red.

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