Scorecards that make a difference
Image by Jason Weingardt via Unsplash
Finance managers get scorecards all wrong. They aren't a convenient way to report financial performance. Scorecards need to influence strategy and result in actions.
Here is how:
#1 Strategies → Action Plans → KPIs
The metrics on the scorecard need to link to higher-level strategies. Otherwise, they don't help with informing whether the company is on track or needs to revise the course.
#2 KPI → What → Who
Metrics need to be narrow enough to hold a single leader accountable. Otherwise, it's unlikely anyone will act when metrics are off.
#3 Scorecard → Goals → Incentives
Ideally, at least some of the metrics should be part of the responsible leader's goals. Otherwise, you will eventually have to fight an uphill battle to get leaders to take results seriously.
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