By Melissa Raffoni, CEO, The Raffoni Group
In my article, What a Strategic Scorecard Is and Why You Should Care, she discussed the importance of having a strategic scorecard. I couldn't agree more — strategic scorecards are an essential way to track the progress made in achieving strategic goals and help teams focus effort and improve problem solving. Keep in mind that strategic scorecards are not the same as operational dashboards — tools to manage operational/functional goals — although they do have some of the same elements. To have an effective strategic scorecard requires clarity regarding four essential elements: goals, measures, targets and actions.
1) Goals: Goals are quite simply singular statements of "what" is to be accomplished. Most executives understand goals well; they have scorecards containing goals such as "Grow Revenue", "Reduce Costs", "Improve Teamwork" to name a few. In addition to those high-level phrases, it's also useful to support each of them with a few statements that provide direction on how this goal can be achieved. In the case of "Improve Teamwork", it's also useful to have description illustrations such as, "spend more time collaborating on group problem solving" and "establish employee-led group to identify ways to enhance morale." A few well-thought-out goals, supported by goal statements, help clarify what the real intent of the goals are.
2) Measures: Measures quantify the efficiency and effectiveness of an action. For every goal, there should be one, maybe two, measures to provide a metric that enables managers to understand if the goal is being accomplished. In the case of "Improve Teamwork" a simple measure might be "Employee Satisfaction with Work Section Teamwork." The thinking here is that if employee satisfaction with teamwork is increasing, the goal of improving teamwork must be getting accomplished. Be careful to avoid using measures that are easy to collect but don’t provide a good gauge of performance with respect to the goal. While “Employee Turnover” might be readily available, it isn’t a good proxy for teamwork.
3) Targets: Targets specify the level of performance improvement that needs to be achieved. A simple rule is where there is a measure, there must be a target. Targets can be challenging to set but the process is eased when they are set based upon business demands (e.g. Costs must be reduced 10% to maintain margin) or competitive benchmarks (e.g. 50% of our top competitors revenue is to repeat customers). Sometimes getting the baseline or the starting point can be the most difficult. In order to "Improve Teamwork" it's essential to know what the "Employee Satisfaction with Work Section Teamwork" score is at the outset. A survey of the work section might indicate that "Employee Satisfaction with Work Section Teamwork" is 5.5 out of 10. This initial reading provides a baseline to set the target that over the short-term—a year for example—might be a score of 7 but over the longer term, such as three years, might be 9.
4) Actions: Actions are the specific steps or projects that will drive performance from the baseline to the target. They may be quick hit steps or longer term initiatives, but either way they scope what needs to be done and they provide accountability. Through regular action plan reviews it's possible to determine if the actions are driving results not just effort. Looking back at the goal definition helps to identify the actions that could be implemented. With the example, "Employee Satisfaction with Work Section Teamwork," say the number needs to reach 7 in one year and 9 within three years. A quick action might be, "Establish employee-led group to identify ways to enhance morale." This would only take a short amount of time to set up and might prove enough to move teamwork performance from the baseline of 5.5 to the target of 7. Reaching the longer term goals of 9 might require a longer term action such as, "Set up and deploy a company-wide problem-solving process." This wouldn't be a quick hit program, but if done correctly might have a major impact on "Improving Teamwork" as well as overall company performance.
5) Owners/Teams: These are the individuals and groups that serve as accountable executives in driving strategic progress. Typically goal/action plan ownership is given to the executives or those in the areas of the organization most aligned with the content of the goal or action plan. Assigning ownership is critical because it clarifies and improves accountability. In our example, the goal of, "Improve Teamwork", the measure, "Employee Satisfaction with Work Section" and the action, "Establish employee-led group to identify ways to enhance morale" are probably well aligned with Human Resource leadership. They would constitute the owners and teams needed to drive progress in this area.
This approach might seem highly structured and to be fair, it is. But the process has been proven time and time again and, if followed, works very well. Be sure to set goals, measures, targets and actions as a set, being as careful as possible to design them in direct support of the most pressing business needs. You’ll find that your focus, problem-solving abilities and overall results will measurably improve.
- March 2019
- Feb 28, 2019 Are You An Engaged CEO Champion? Ask Yourself These 3 Questions Feb 28, 2019
- Feb 28, 2019 5 Signs It's Time to Make a Change to Your Exec Team Feb 28, 2019
- Jan 30, 2019 6 Key Practices of Companies with Award-Winning Cultures Jan 30, 2019
- Jan 30, 2019 How to Make Sure Q1 Doesn't Get You Down: Focus First on Yourself, then on Your Company Culture Jan 30, 2019
- December 2018
- Nov 26, 2018 Are You a Graceful CEO? Nov 26, 2018
- Nov 7, 2018 9 Steps for an Eye-Opening Assessment of Your Leadership Team, Strategy, and Strategic Planning Process Nov 7, 2018
- Nov 5, 2018 Are You Tracking Projects or Tracking Results? Tell the Truth. Nov 5, 2018
- Oct 15, 2018 Does Your Leadership Team have High Executive Function? Oct 15, 2018
- Feb 20, 2018 Finding the Sweet Spot Between Inspirational and Operational Leadership Feb 20, 2018
- Jan 8, 2018 Top 7 CEO Personal Development Goals for the New Year Jan 8, 2018
- Nov 21, 2017 Smoother Sailing Ahead for CEOs Who Stay at the Helm of these 5 Core Responsibilities Nov 21, 2017
- Oct 3, 2017 Why You Should STOP Thinking about Cascading Goals to Your Organization Oct 3, 2017
- Jun 19, 2017 5 Essential “To Dos” for Every CEO’s Summer Plan Jun 19, 2017
- Jun 5, 2017 Preparation Makes Perfect: 5 Tips for Preparing for Your Strategic Planning Session Jun 5, 2017
- Jun 1, 2017 Strategic Planning: Why Start with A CEO Presentation? Jun 1, 2017
- Sep 2, 2016 6 Reasons Why Traveling for Pleasure Will Make You a Better CEO Sep 2, 2016
- Jun 29, 2016 The CEO's Role in Managing Culture: Do What You Believe in Most Jun 29, 2016
- Apr 21, 2016 CEOs share the top 15 REASONS they make time for a CEO Peer group Apr 21, 2016
- Nov 10, 2015 2015 CEO Collective Retreat Recap Nov 10, 2015
- Jul 22, 2015 5 Mistakes Even the Best CEOs Make Jul 22, 2015
- May 4, 2015 At the Heart of The Matter: 6 CEOs Share What They Love Most About Their Jobs May 4, 2015
- Mar 24, 2015 How to Improve Your Strategic Scorecard Mar 24, 2015
- Mar 24, 2015 What a Strategic Scorecard Is and Why You Should Care Mar 24, 2015
- Nov 20, 2014 CEOs “Find Their Tribe” at the Raffoni Group’s 9th Annual CEO Collective Retreat Nov 20, 2014