Managing Performance with a Scorecard
Your corporate scorecard is a tool to help you monitor the progress of your business and your strategic plan.
A scorecard consists of goals, measures, and targets. Goals are desired outcomes. You gauge the progress toward attaining a goal by one or more measures. Goals have causal relationships — one action causes another outcome. Because you've established SMART goals (see Chapter 12), you can more easily pull out or delineate the measures you need to track.
A scorecard goal consists of two pieces:
- Measure: A measure is an end point. It's an explanation (word text) of what you want to achieve. Measures are also the indicators of how a business is performing relative to its goals and whether the overall strategy has been accomplished. For every goal, you should track at least one measure that tells you how you're progressing toward achieving the desired outcome.
- Target: Targets quantify (numeric) the outcome measures. Target measures are the specific numbers you need to hit in order to achieve your goal and can be expressed in weekly, monthly, or annual figures.
I expand on the measures and targets of a scorecard goal and how to build your strategy scorecard in the following sections.
Pegging your measures
Creating good, solid measures is the first step to developing your scorecard (see Chapter 14 for info on how to use your scorecard).
Measures are quantifiable performance statements, and they must follow certain guidelines. Measures should ...