Implementing Winning Performance Scorecards

Have you ever come across a business either small or large that seems running like a headless chicken? There is no clarity about why the business exist and what it is seeking to achieve. The business does not have any strategic plans on paper or where they do exist, they basically reside in people’s heads. There is confusion everywhere, everyone within the organisation does his or her own thing.

I do not think that is how a business should be run. There should be clarity on the vision and mission of the business. This will help reduce confusion about the strategic priorities of the organisation. There is need to identify and describe the critical drivers of strategic success and communicate these goals to everyone within the organisation. With increased focus on tighter performance, especially in this present economic climate, there is need to focus on the right priorities that deliver value for money.

Implementing a winning performance scorecard that delivers on the strategic goals should not be viewed as a daunting task and process.

» Establish the mission of the business: The starting point is asking questions. As a leader, interview your employees, other functional managers and external stakeholders to get their views as to why the organisation exists and what they expect to get from the organisation. There should be buy-in from senior managers. Find out what are the strengths and weaknesses of the organisation.

» Identify action plans: Having established your mission, there is need to identify the key performance enablers in order to deliver the mission. There is also need to ensure that all business functions and other support units are working towards the same goals. Performance enablers might be robust IT systems, skilled and talented human resources or excellent processes and it is important that these resources are managed well.

» Create a heat map: This is a colour-coded map used to monitor performance. This is normally created from the assessment of your key performance indicators (KPIs). But, before you call them KPIs, make sure you have asked the right questions first. It is through asking questions that you come up with key performance measures that are aligned to strategy. For example you could have Red for bad results, Yellow for better results and Green for excellent performance. It is possible that you can use more than three colours to assess performance. This will help you identify areas of improvement, for example, if one activity is showing red, then you know that there are changes needed to the processes. Those areas not doing well will be attended to first, but that does not mean that you neglect the ones doing well. There is still need to keep an eye on them just in case.

» Align individual performance with strategic goals: The individual appraisal system should be linked to the overall strategy of the business. This will help in linking the objectives of the business with the operations.

You should also remember that implementing a performance scorecard is not a once in time activity. You do not have to establish your mission, strategy and KPIs and then relax. It is an ongoing process, and you need to constantly monitor and review all the elements of your scorecard as the business environment continues to evolve. This will ensure that you continue measuring what actually matters and not waste resources on what is not important for strategic success.

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