|
A scorecard is a vehicle not only for 'reporting' performance, but it is a vehicle for 'Assessing' performance, and 'Driving' performance. A good scorecard takes care of 50% of the job of execution management and rest 50% is done by the process around it.
Its not strange to see 'Data Rich and Information' poor companies where there are bulky set of 'Management Packs' gathering dust. Apart from culture, the reason mainly is the 'lack of relevance and completeness' of scorecards. This topic covers the components and imperatives, which make an 'Actionable' scorecard.
Focused
Scorecard Aligned to SB & SBP
A scorecard is driven by objectives and targets.
For example- If as per the Strategic Business Plan of Sales unit a key objective is 'Maximize the sale of low-risk products', the scorecard will present the overall sales view and drill deeper on the sales view of low risk products. It will also cover the proportion of low-risk sales to overall sales etc,
Another example of alignment is that if 'minimizing TAT' is not part of strategic objectives (as the TAT is very much within acceptable range), you will not find the 'TAT analysis' as part of the scorecard (not at least on the front page).
Apply 80-20 /top 5 rule for Performance Scorecard
In SBP & SBP one has to apply 80-20 rule and identify the top 5 items, which makes the biggest difference and drive the performance around the same. A score-card is no different. One of the challenges in scorecards is infinite graphs, tables, interpretations. This affluence leads to confusion OR 'glut' of information leading to rejection.
A score-card should cover and provide emphasis in line with the 'weight' of the objective. In other words, the space and effort in scorecard should go in line with criticality order of Measures.
Exception driven
Scorecard should place greater effort and space in reporting, highlighting and root-cause analyzing on things, which are doing either too well OR too bad. Performance as per the expectations should be mentioned, but somewhere in the packages OR fine prints.
Comprehensive
Make unit level scorecards to include all aspects of their functioning and link to overall enterprise scorecard.
The high level information in enterprise level scorecard should be able to link with lower level scorecards in a harmonized manner. For example if 'TAT Analysis' in enterprise scorecard takes the front page in scorecard due to its weight, a drill down to Operations Scorecard should explain the exception in a detailed manner. A sign of lack of linkage is that you have 'TAT Performance' in Red in ESC and when you drill down, you find 'TAT Performance' in amber and also you find the same somewhere in fine print with no drill down. That means that while at enterprise level it is an important issue, the same is not felt at operations level.
Process Level and Natural Team Level scorecard cuts.
Scorecards are not only have a hierarchical cut, but also cuts on processes (which may run through the functions) OR team level (where it can be a natural team taken from various functions).
Firm-up standards. (Unit level TAT, Cost Per Unit & allocation, Tolerances)
Where-ever possible, one should have standards firmed-up (hopefully done in Strategic Business Plans and IGS), and we should maximize the comparison of actual vs. standard.
Measure performance against rolling budget where-ever needed.
This is more to do with the process of execution management than the scorecard itself. In a dynamic environments, the targets/standards/budgets change across a year. Therefore the Strategic Business Plan as well as the scorecard has to keep on changing accordingly.
Include the key initiatives.
SBP also has a list of initiatives, which need to be tracked. The same rules of comprehensiveness and focus will apply on the initiative reporting as well.
Pro-Active and Analytical
Data-Warehouse/OLAP/Data Mining is most needed for this part of a scorecard. This aspect of scorecards talks about analysis and forecasting
Include leading as well as lagging/ Cause & Effect measures:
This is covered before in 'Imperatives for Measures'.
Trend analysis.
A scorecard not only shows on where the needle (as in Dashboard) , but also how the needle is moving and how much it has moved.
Forecast for the future Readiness & Risks:
Using the leading indicator and state of the initiatives linked to the objective, a scorecard should not only category the current state (in other words 'what has happened') into 'good/bad/ugly', but also the future readiness into 'Red/Amber/Green' (in other words 'what is expected to happen').
There fore a scorecard should give a message like 'The TAT situation so far is ugly, but given the new tool getting implemented, which will boost our productivity, we expect to achieve the standards over next one quarter'. Another example is 'The TAT situation is good currently, but given the high surge in volumes expected over next couple of months, our readiness to maintain the TAT standard over next quarter is low'
Analytics support:
This aspect answers 'Why it is happening?'. A scorecard has not only to report the exceptions, but also the reasons behind it to make it actionable. This is enabled by analysis tools.
Actionable
'A picture speaks thousand words' does not fully hold true for a SC. Rather you need many words to complete the picture. The presentations methods in SC (charts, meters, lights, highlighting etc.) are always vulnerable to misinterpretations till they are well qualified with comments. A typical scorecard will include all the following:
Commentary on how good OR bad the state is:
If I have delivered 99.9% adherence to SLA, whereas the standard is 100%. How bad it is? In case of a Air traffic control, this difference may cause many air crashes, However, in case of CRM system it is not that mission-critical. While many a times this is achieved by having tolerance ranges and linked exception highlighting, at some place it is not possible to do. Therefore one should spell out the state of performance.
For example- 'TAT delivery for issuance of telephone connection is bad as we are able to meet only 75% of the SLA'
Commentary of reasons for high and low points:
A golden rule for designing a scorecard is to ask 'so what?'. After commenting on where we are, its time to place commentary on the reasons. (Answer to 'why is it happening'?)
For example- 'The supply of the telephone instruments has shrunk over last month, due to non-availability of raw material to our supplier'
Commentary on the corrections/improvements to be done:
Once the reasons are given the next question to answer is 'What are we going to do about it?'
For Example – 'We should broad-base our vendor network and source two new vendors and palace part orders to them by end of next month' and 'We should talk to our supplier for placing our orders at priority'
Commentary on expected improvements:
Continuing from previous point, the proposed action for improvement is valid, only if it brings along the expected improvements.
For example – 'We expect to achieve SLA adherence to 85% by end of two months and achieve the standard of 95% by end of four months.'
Help items:
Surely you need some help from your manager, internal suppliers and internal customers to make it happen. One should list out the help items and linkages to success.
PLEASE REFER Execution-MiHPractice Tool Scorecard health checklist to enable you create an effective scorecard.
|
