I’ve talked about metrics in previous videos, the only difference here is developing a set of KEY metrics / balanced scorecard for a leadership view / role.
I like the word balanced, as it implies that you need to focus on multiple things and give them the attention they need WITHOUT compromising performance in the other key parts of your business or area.
Like anything, you won’t get it right 1st time, the goal is just to get it started and then get it right through continuous tweaking on a periodic basis so over time you will see a complete evolution of your dashboard.
But the key is always to question everything you measure to ensure it’s adding value and driving positive action to improve your understanding of the model and then what areas and dials need to be turned to then drive performance.
Another point of note here is, strategy alignment. Yes that thing that drives your business to achieve your Moonshot vision, your north star, yes that thing. Everything needs to align to your strategy in all core areas of your business. As remember, if you are not measuring, not only are you not improving, but you could be going completely off course. This sounds like a simple and obvious thing that should be done, but the reality is many business owners get stuck in firefighting mode and don’t have time to think of or develop these. My answer to that is make time. There is a quote I like to say to my clients when they say they are too busy and that is:
“If you are too busy to spend time improving, you will always be too busy”
And for me that starting point of improving is always meaningful and accurate data
Leadership Scorecard Video Transcript
Hi, Shay Lynch here, director of Future State. Today I’m gonna talk about metrics again, right? But from a director or a leadership perspective, like so you’re looking down on your business, you’re looking at that helicopter view, and you wanna know very quickly in real time, how your business is performing. So how do you do that? What are the key strategies you need to understand to ensure that you can take one look at a dashboard and know, “Yes, I’m happy or that area needs help, I need to escalate this point over here.” This is how you do it, okay? Now, one thing I would like to stress, this is not a one size fits all. What I’m gonna show you here may not be exactly what your business needs, but follow the concept, follow the method and find out. And we’ve talked about metrics before in terms of discovering what your key performance indicators are. Like, how do you find those key ones amidst all of the other ones that are there? How do you know which ones are gonna be the drivers for your improvements in every part of your business? And by the way, whatever you measure on the ground needs to work all the way up. So they should be complimentary, like top-down and bottom-up. So the leader at the top can look down, “Yes, I know what they’re doing underground, what they’re measuring on the ground and what they’re doing is adding value to the business.” And then the people in the ground need to know, “Whatever we’re doing has to go up the chain.” So they need to know which ones to measure to show the leaders that this is working or not, or do we need help, okay? So that’s the whole concept, they have to be balanced, they cannot be completely misaligned, they need to be aligned at the top and bottom. That is crucial to get this right, okay? So when you’re designing your leadership dashboard, or some people call it a balanced scorecard. Like the balanced scorecard concept very similar to this is something that Harvard developed many, many years ago. And it’s been uploaded through the years of business, and it does work very well, but again, what I will say to you is, this needs to be tailored to your business. While at a very high level it can sound great in theory, you need to tailor the metrics to suit your business. And that is key, you can’t just take a one size fits all approach. They have to be relevant to your marketplace, your strategy, your vision, your market, and how your business operates with your people in it, okay? So I’m gonna go through some of the stuff that I think are important and again at a high level these are the areas, on the ground what are the measurements that you want, that will give you that sense of achievement, satisfaction, or concern as it may be. So, one thing we always look at, always look at your strategy, right? There needs to be a strategy. If you don’t have a strategy, start working on it immediately because you need your moonshot, you need your vision, you need to know where you’re going, you need that sale telling you where I’m pointing because if you don’t have that, you’re just gonna go through the motions, and eventually, that may work in good times, but eventually you can get cut out when times are difficult. So you need a vision, and with a vision, you have a backup plan. So you know what you can contract to in tough times, right? So with that, strategy very simply, adherence to your strategy. How is your business performing against your strategy, right? How is the trading economy supporting your strategy at the moment? Is it a good time? Is it a tough time? How do you need to expand or contract your business to suit? And how are you performing? How is your strategy performing? So, they’re just very simple points there, but again, I want you to get more into the detail of what that means. So when you build your strategy, you’ve set your targets on a monthly, quarterly basis, or whatever that may be, you need to measure against that. And we talked about closing the gap before, so you have set your targets, when you haven’t achieved them, what do you need to do differently in the next period and close that gap? So we talked about to close the gap plan, okay? So that’s the first thing, right? So then we can break it down into maybe the four key high level parts of your business, right? So let’s look at customers because they’re the reason you’re in business in the first place. So let’s look at them first, right? So customers, right? Again, I’m doing this a bit differently than most because we talked about only having win-win customers in your business in previous videos. This is key. They need to complement what you do, and you need to complement what they need, right? It’s as simple as that, you can’t have customers that waste your time and cost you money, that change the goalposts ’cause you’ll never build a strong business on customers like that. You need to have customers that love what you do, and you love serving them. It’s as simple as that. Then we talk about, well retention. How are you keeping those good customers? How are you their partners? How are you their extended enterprise that you’re playing in their playground so much that they’ll never wanna open the door to another supplier, right? So they’re, again, very high level, right? But then bringing it back down to the ground. Well, how do you find customers? Well this is S and M, sales and marketing, What are the processes on the ground, and the metrics that are telling you that you’ve got the right mix of customers, the right amount, or you need help in finding some new ones? So this is the stuff at the high level, again, we’re looking on the ground, right? So that’s customers. And again, the challenge to you is how do you set your metrics in the customer frame, the customer box? Then we’re gonna go over to people, right? Because people, like I always talk about strong performing people in business. If you don’t have strong performing people in business, you don’t have a strong business, because, again, when you look after your people, they look after your processes and your customers. So it’s so important to make sure that you have a people plan for your business. So this is all about, well how do you grow your business? What are the metrics? What are the drivers that you’re gonna do that are gonna bring your people on your journey as well, make them part of it. And we talked about that in the previous video. Then again, retention is another big one. How are you holding on to them? You know? And what is the culture like in the business? How are you ensuring that you’ve got a very motivated team that have shared goals, shared responsibilities, and you work together to make it better, right? So this is really important in terms of what are you doing. So if you talk about specific metrics, how are you upscaling? How are they able to support other areas of their business through upscaling and cross scaling, right? So what are all the different skill sets they need? Are you supporting their education? What are the key metrics you wanna drive here? And then culture. What are the key metrics you wanna see? Are they performing along that? And it’s a strong culture. One of my favorite is the law of reciprocation. How many times have your teammates helped each other during the course of the period? To me, that is a huge one, start with that, okay? Then we’re gonna toggle down to process, okay? So process, like again the goal for me is always strong performing people running strong performing processes, right? So, simple key metrics that I will look at here is the lead time to customer, from the very first supply to the very last customer. So, and what I mean by that you can have internal suppliers and customers as well depending on the size your business, right? But what is the total lead time to customer? And then how can you improve it? How can you reduce it without impacting quality? And you do that by looking at all the value and the non-value activities, and we’ve talked about that many times before again. What is the quality of your product or service? Are you getting feedback from your customer? And again, another one if you’re talking about, it’s right first time. How are you doing it right so you don’t have to redo it or rework or have issues with customers. So make sure your quality of service or product is exactly what the customer wants, delivered at the right time, in the right quantity. So ensure that the quality meets because even I always say, in order to speed up, you need to slow down, do it once and do it right. Take your time. This is not a sprint, it’s a marathon, right? All of this has to be governed by improvements. So whatever your metrics are today, in terms of quality and lead time to customer. How can you set strategies to improve them by two to 5% period on period? What are the things you can actively or proactively do to improve that service delivery? Because once you start working on these three, you will very soon quickly realize they should be all working together. And this is where the word balanced, the balanced scorecard comes in, because you can’t do something here that will compromise your people or whatever you do here can’t compromise over there. So they all have to be synergistic, and that is where Harvard came up with this balanced word. You can’t just look at one part of your business in isolation and forget about the rest. There needs to be synergy. Okay. And obviously, there is the financial side, right? And again, without getting too complicated, cash flow, profits, revenue in and out. Keep it very simple, but whatever you’re measuring in these areas, ensure that they’re real time to the best of your ability. Don’t wait till the end of a month to know, “Okay, we had a bad month.” And it’s too late to do anything about it. And this is where, as I said, the alignment of your metrics on the ground is so important because whenever you go into this dashboard, whenever it may be, and you’re not happy with it, you should be able to toggle down onto the ground and go, or you can go down to your process and say, “Look, can I look at your metrics on the ground?” They should be measuring them day in day out, so you can see where it’s gone askew, right? And where it’s gone askew, that should be the point where you need to do a retargeting plan to make sure how do we get back on track, you know? So you don’t wait till the end of the month. This is real time adapting. It’s like a plane going to whatever airport, so say Dublin to Malaga, right? That plane spends 95% of its time off course, and it does subtle corrections along the way to get back in to land in Malaga, okay? So it’s the same thing. You need to be making those subtle corrections in real time to ensure you’re staying on your path, okay? So this is the actual scorecard or your dashboard, whatever you wanna call it, right? So just a few key things within this I just wanna make sure that you’re doing. This has to be very proactive, this is not a reactive, as I said, at the end of the month, where you’re just reviewing it and going, that was good or bad. That is too late, you know? This has to be a proactive plan that you’re constantly measuring in real time, okay? Again, when you find the information that’s telling you something, what actions are you gonna take? And again, the rules, the guidelines, when you can’t do something in the people side it’s gonna compromise process. You need to have all the sort of guidelines and rules in place and constraints, for a better word, to ensure that everything complements each other. You’re not gonna sacrifice something to improve something else, or there’s gonna be a consequence or I call it to snowball, okay? So make sure whatever you do here will complement the other aspects of your business, okay? Then the goal. So we’re talking about strategy, right? Any goals you have here in your strategy that ends up being customer, people, financial, or process, they need to be part of your metrics in each one of those corners. And you need to have a set of action plans against this which you can measure and ensure that you’re adhering to the strategy, and therefore improving the targets as well, and when you’re not, what you need to do to get back on track. Everything in business is all about feedback. You can’t improve something if you don’t know where you are. So you need to have that feedback improvement cycle, it’s an iterative cycle all the time. You don’t just do it once, you do it continuously. You don’t wait for the period, you do it as a real time as much as possible. Feedback and then that as I’ve just talked about, is improvement. You need to improve and I keep saying, if you’re not improving, if you’re not moving forward, you’re going backwards. You’re not even staying still, if you’re not improving. Things change in business so quickly so much, the only change in business is constant, so you need to have to be ahead of that change curve. So I hope that makes sense. I hope you can apply these strategies in your business. And if you need any help, just get in touch. In the meantime, this is Shay Lynch saying thanks for watching.
