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How
To Develop An Effective Scorecard
By Dennis Sommer (www.dennissommer.com)
Organizations have been skeptical of attempts to quantify
and measure results using performance scorecards or return
on investment (ROI) reports. Attempts to develop a process
have been met with much skepticism and sometimes even
criticism. Organizations want a process that is simple
and easy to understand, but credible and conservative
in its approach. To satisfy these needs, a performance
scorecard or ROI process must meet the following criteria.
Keep It Simple
The scorecard process must be simple, avoiding complex
formulas, lengthy equations, and complicated methodologies.
Most scorecard attempts have failed on this requirement.
In an attempt to obtain statistical perfection and use
as many theories as possible, several scorecard models
and processes have become too complex to understand and
use. Consequently, they have not been implemented.
Keep It Economical
The scorecard process must be economical, with the ability
to be implemented easily. The process should be capable
of becoming a routine part of an organization without
requiring significant additional resources.
Follow
a Practical Approach
Assumptions, methodologies, and techniques must be credible.
Logical, methodical steps are needed to earn the respect
of executive management. This requires a very practical
approach to the process.
Strike
a Balance
The scorecarding process must be theoretically sound and
based on generally accepted practices. Unfortunately,
this requirement can lead to an extensive, complicated
process. Ideally, the process must strike a balance between
maintaining a practical and sensible approach and a sound
and theoretical basis for the process. This is perhaps
one of the greatest challenges to those who have developed
scorecard models.
Appropriate
for All Business Units
The scorecarding process must be appropriate for a variety
of business units. Some models apply to only a small number
of business areas, such as finance or operations. Ideally,
the scorecard should be applicable to all types of business
units, including IT, manufacturing, distribution, sales,
marketing, human resources, etc.
Handle
Multiple Data Types
The scorecard must handle all types of data, including
hard data (revenue, costs, quality, etc.) and soft data
(customer satisfaction, complaints, etc.).
Provide
a Proven Track Record
The scorecard must have a successful track record in a
variety of applications. In far too many situations, scorecards
are created but never successfully applied. An effective
scorecard should withstand the wear and tear of implementation
and should product the expected results.
About The Author
- Dennis Sommer
Dennis Sommer
is the founder and CEO of Executive Business Advisers,
a management consulting firm specializing in business
growth, sales and profit improvement. www.executivebusinessadvisers.com
Dennis helps companies increase sales revenue, reduce
sales and marketing costs, improve marketing ROI, and
drive new business growth by improving and optimizing
their sales, marketing, company strategy and financial
health.
Dennis is a highly sought after business keynote and seminar
speaker www.dennissommer.com
and author of several highly popular sales, marketing,
leadership and professional development international
articles and books www.advisersecrets.com
.
Contact Dennis at 800-627-6512.
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