Tag Archives: Team Leadership

Do you know if your business is winning or losing?

The grand-finals are on this weekend! Can you imagine watching the game without a scoreboard? You watch the entire match at the edge of your seat, with your mates, a beer in your hand, waiting for the referee to blow the full-time whistle and everyone asks “who won?” Seems absurd right? The same is true when it comes to tracking business performance with visual scoreboards. However, many businesses seem to operate without one, relying only on the month-end results to inform if the business is winning or losing!

“You wouldn’t watch a game without a scoreboard, right?  Yet, businesses operate without one, not knowing if it is winning or losing until the month-end financial report”

So what are the benefits of having a visual scoreboard?

  • Provides the right focus – as the saying goes, what gets measured, gets done. With the right metrics displayed correctly, the entire team will know the baseline expectations of the business. It also provides an opportunity to celebrate team successes at regular intervals.
  • Drives team engagement – if the boards are just up on the wall, then it is one way communication. It is certainly better than not having one at all. However, teams are more engaged with a daily ritual around these boards, discussing continually if the business is winning or losing. Generally these are 15-20min standing only meeting where results are discussed by exception. The discussion should focus more about what needs to happen moving forward to improve performance.
  • Opportunity to act before it is too late – if you only review the results at the end of the month, then it is too late change anything – like driving forward looking at the rear-view mirror. The scoreboard should display trends and if it is heading in the wrong direction, then you have a chance to correct it before it is too late. This forms the basis for structured problem solving. Specific actions need to be captured with one person held accountable with a specific date. Do not get into solving the issue during this meeting – a trap that many fall into making the 15min meeting extending beyond an hour.

How do you get started?

Well there are some basic categories and metrics that can be used as a starting point, to design a scoreboard.  These are;

1.      Safety – covers occupational health and safety aspects. Any safety incidents, near misses or safety observations made by the team.

2.      Environment – any incidents that impacts the environmental regulatory aspects.

3.      Quality – consumer complaints, internal quality metrics and internal audit results.

4.      Productivity – metrics that measure productivity for your team; number of items produced per hour, number of orders fulfilled per day etc.

5.      Delivery – on time delivery metrics measuring actual performance versus customer promises.

6.      Cost – cost per item or any other factors such as waste, overtime etc.

7.      Morale – absenteeism is one of the common metrics for morale, but engagement survey scores, improvement suggestions per employee etc. can also be used.

All these categories are not required when you start – keeping in mind that less is more. Identify a few critical metrics that engages your team to start with. As the process matures overtime, the team would naturally want to know more.

Making the most of your visual scoreboard

  • Ensure that the entire team can easily understand scoreboard. Display self-explanatory graphs, and visuals. Green and red indicators do make a big impact.
  • The scoreboard should be accessible to all team members during their normal periods of work.
  • The board should not be updated by one person. Hold different team members accountable to update various data points.

Should it be an electronic or a manual board?

I prefer a manual process with a whiteboard and marker pen over an automated display. The thinking is simple – if the teams have to manually place a data point on a graph, they have to have a good understanding of the measure first. It also helps to communicate a certain message when one data point is placed in the red-zone – the business is losing. So these manual systems definitely have an edge over automated systems. Once during a visit to a European luxury car manufacturing plant South Africa, I noticed how they used a simple laminated sheet and a whiteboard marker to update data on each machine. It was updated to the hour and even I could see if each manufacturing cell was winning or losing as a glance. And if they weren’t, there were comments as well. Make it effective first and then think about efficiency.

Get your team to know if the business is winning or losing today!

Stay Focused but Watch Your Back: Part 2 of 2

In my last post, Get Your Blinkers On and Stay Focused, I wrote about the need for organisations to stay focused ahead while being aware of the dangers around.  In that post, we analysed the first point – staying focused, and in this post, I’d like to discuss the other point – how to be aware of the dangers around you.

In the context of the driving analogy mentioned in the previous post, this is similar to staying focused on the road ahead while regularly checking the rear-view mirror, side mirrors and checking the blind spot when needed.  However, you don’t have to take action for everything you notice around you unless it is going to have an impact to your journey.

When it comes to business performance the concept still holds true.  To get this concept to work effectively for your business, you need to get the following three things right;

  1. Visual Scoreboard – with the right performance metrics
  2. Update Frequency – the metrics need to be updated at appropriate intervals
  3. Baseline and Triggers – the baseline measures and trigger points for the metrics

As a rule of thumb, you know that the above processes are working effectively if any employee can tell if the organisation is winning or losing at any given point.  So let’s explore the above three points individually.

Visual Scoreboard – there are many organisations that operate without visual scoreboards. Can you imagine watching a match of your favourite sport without a scoreboard?  You watch the entire match at the edge of your seat, waiting for the referee to blow the full-time whistle and you ask your friend or yourself “who won?”.  It is the same to operate a business without a visual scoreboard.  You shouldn’t have to wait until the end of the month/quarter/year to figure out if the business has won or lost, if you have visual scoreboard.  When designing one, it needs to be holistic/balanced, simple/intuitive and easy to maintain/update.  There are several categories that you can use to make it holistic/balanced.  Some common categories are;

  1. Safety– covers occupational health and safety aspects. Any safety incidents, near misses or safety observations made by your team.
  2. Environment– any incidents that impacts the environmental regulatory aspects.
  3. Quality– any consumer complaints, internal quality metrics and internal audit results.
  4. Productivity– metrics that measure productivity for your team; number of items produced per hour, number of orders fulfilled per day etc.
  5. Delivery– on time delivery metrics measuring actual performance vs customer promises.
  6. Cost – you could monitor cost per item/service metrics or any other factors such as waste, overtime etc.
  7. Morale– absenteeism is one of the common metrics for morale, but you could also include engagement survey scores, improvement suggestions per employee etc.

You certainly don’t need all of the above when you start.  Identify a few critical metrics that engages your team.  As the process/concept matures overtime, the team would naturally want to know more and you can incorporate the other factors then.

The display of the metrics need to be simple and intuitive.  If you have to pause and look at the metrics with squinted eyes or a frowned forehead, then you haven’t got this right.  The display need to effortlessly communicate the message (winning or losing) in less than three seconds.

Update Frequency – You don’t need to monitor every metric at every frequency and it may not be even practical to do so. Certain metrics may need further internal processing before the final figure is available.  There are other metrics that are not available on a daily basis such as consumer feedback/complaints or finance figures, you could find a related metric that can be measured in the interim.  It is also important track overall business performance at various milestones such as year-to-date, month-to-date, week-to-date, and at a daily level.  Updating and maintaining the scoreboard needs to be a team effort.   It helps to get the team buy-in and engaged.  If the ownership is on one-person it just becomes that person’s story, interest and burden.  If the team is involved it becomes everyone’s story.

Baseline and Triggers – this is the most important aspect of the visual scoreboard. This is where it informs if the team is winning or losing and if an intervention is required or not.  The baseline informs you the normal expected result for that particular metric.  For example, it could be the desirable consumer complaints number or the budgeted cost for each item.  Unless this baseline line (reference point) is indicated, the metric itself wouldn’t make any sense.  Once you have the baseline, you could determine if each metric is winning or losing. Similarly, when you look at the entire scoreboard it becomes clearer if the business is winning or losing.

Trigger points are slightly different and not commonly practised.  However, they do serve a very important role.  Just because a metric may seem like it is off the baseline, you wouldn’t want to intervene immediately as it could be just a one-off incident.  If you had trigger points, you know when to step in and intervene.  The gap between the baseline and trigger point is your allowable threshold for variation for each metric.  The triggers help you prioritise a few from the many for which you need to take action on.

A team scoreboard set-up with the above concepts will act as a thermostat – where it will help you take action when it is off the desirable conditions/settings.  Otherwise, a scoreboard can merely be a thermometer – it is just one-way information.  One last tip, when discussing the business performance get each team member to present the scoreboard to the team.  That way, they all get understand the full scoreboard and increases the buy-in.  Hope this would help your team and the business to stay focused ahead and to be aware of the dangers around you.