SCORECARDS DO NOT DRIVE SALES GROWTH
I don’t believe that scorecards drive sales growth. I say “believe” because I don’t have any definitive proof one way or another and I’m not about to sort through over a million responses from Google search to find out. But, instead, I will tell you about my experience and exposure to scorecards and the impact they can have.
TRACKING THE RIGHT INFORMATION FOR IMPROVEMENT
My golf experience would not indicate that scorecards improve my golf game. However, many years ago, I decided to do more than just keep score. I also tracked fairways and greens hit in regulation and the number of putts I took on each hole. (Full disclosure here: I am a lifetime mid 90s’ golfer which gives me a handicap in the low to mid 20s.) The year I decided to track more information, I set a goal to get under a 20 handicap. At that time, I didn’t play a lot of golf – no more than 20 times a year, but I managed to end the season at an 18. I believe that tracking the RIGHT information on the scorecard AND setting a goal AND working to improve metrics are what led to meeting the goal of making improvement.
I’ve been in two meetings this week where scorecards for performance were presented. One scorecard was really a financial data update reporting on actual performance against goal and year over year. The other scorecard reported on various initiatives and the current stage of completion. The stages were reported as:
- Green – on track or completed
- Yellow – close to being on track or completed
- Red – not on track to be completed by deadline
THE REASON SCORECARDS DO NOT ALWAYS WORK
When Alan Mullaly left Boeing to take over Ford (see scorecard info), he implemented the Green, Yellow, Red scorecard concept that served him so well at Boeing. If you read the book, American Icon (a GREAT read, by the way…), you find out one of the reasons they cannot be directly connected to sales growth. Spoiler alert – not everyone reporting the status of the project is courageous enough to tell the new CEO when his or her project is not on target.
Alan met with the leaders of his production teams every week to get an update on progress being made. The leaders had to report on what they were responsible for as Green, Yellow or Red. For months, there was never a Red status on any project. Alan knew that this could not possibly be true, but he let it ride. He was certain that, sooner or later, someone in the group was going to step up and be willing to take some bullets.
Sure enough, a car launch that was scheduled for the holiday season was behind schedule and was in jeopardy of missing the launch date entirely. The manager of that division decided that he’d rather take the bullets now rather than later and so he reported RED!.
(Back to my meeting…)
Nothing on the scorecard was RED. As I sat there and calculated numbers on some of the various metrics, I saw that the levels of achievement year to date were in the 33% range when, to be on target, they needed to be in the 50% range. I’m new on the committee, so I was a little uncertain as the newbie and I thought,”Should I speak up? Is this something that has been addressed before and clarified? Does the RED indicator show up when something is 30% or less?” Finally, the gentleman sitting next to me asked the question, “How come we don’t see any RED?” The reasons given to the committee were both evasive and vague.
HOW TO MAKE SCORECARDS WORK TO DRIVE SALES GROWTH
What happened next is what can happen to make a scorecard report contribute to sales growth.
- Questions were asked about the various projects in YELLOW
- Clarity was gained on the exact status
- A series of What, Why, Who, When, How, Now What questions were asked
- We arrived at standards that would change a status from Yellow to Red
The point is this: If you are going to build and use scorecards to impact sales growth, the following has to happen:
- You have to have metrics that are both leading and lagging
- Standards have to be set and they have to be set high enough to allow growth and eliminate mediocrity
- At or above 100% - GREEN - Good
- At a maximum 90 to 99% - Yellow - Poor
- Anything under 90% is RED – AND you have to be willing to call it FAILING.
- You have to have established confidence and trust in your team so that they are comfortable being truthful about the status or production, pipeline, sales activity and forecasting.
YOU HAVE TO KNOW "WHY"
Finally, if you want to be able to answer, “Yes, our scorecards contribute to sales growth” you have to understand that the scorecard is like the meteorologist reporting the weather. Normally, when it comes to weather, that’s all most of us care about. But, when it comes to sales growth, you better want to know why it is sunny or rainy! That is Performance Management! To make your scorecards more effective always, ALWAYS be prepared to ask questions about outcomes that are either positive or negative:
- Why are we getting this result?
- When did we know this was going to happen? (I assure you it was known, or should have been known, way before the report was generated if you are collecting leading indicator sales activities via huddles.)
- Who is or who are the DRI(s) – Directly Responsible Individual(s)?
- What did we do/you do/they do the moment they knew?
- What actions have been implemented to 1) duplicate this success 2) eliminate the problem and/or 3) slow down the negative trend?
- What is happening now? What is the current status?
Having this type of discussion is what leads to sales growth not the scorecard alone!
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