Keeping Score of Profits
Walk into a company that has its financial information open to everyone, and somewhere, somehow, you're going to see a scoreboard that reports and summarizes the company's key numbers. Maybe it's a bulletin board in the lunchroom. Or a set of handouts that people tack up at their desk or workstation. Maybe it's an icon on the computer that calls up a set of electronic charts and graphs. Whatever the format, people need to know how they're doing--this week, this month, this year.
But a scoreboard is like any form of written communication: it can be inviting or forbidding, interesting or dull, clear or confusing. It can be something people think they probably should read (one of these days) or something they want to read (right now). Here's how to make your scoreboard a lively communications center rather than just a bunch of numbers:
Use all the technology you're comfortable with. At Wascana Energy, in Regina, Saskatchewan, people can call up a host of scoreboards just by clicking on the computer's "performance management" icon. Every department has its own set of goals, explains company treasurer Steven Reilly, and the computer shows performance-to-plan numbers along with the department's most recent action plan to address variances. Another oil company--Shell Western E&P Inc., in Houston--developed a software tool the company calls MIG, for management information graphics. "It has a lot of good financial data," says manager of planning and finance Tom Kunz, "and a ton of data on production, depreciation, etc. by field. Anybody in the company can pull it up and look at it."
Have someone "own" the scoreboard, just the way people have to own line items on a budget. Free up an energetic employee to take it on. Set up a scoreboard team. The scoreboarders' jobs should be to exercise their creativity, come up with a catchy presentation, and take on the responsibility of weekly updates. Rotate this responsibility from time to time, so that more than a few people can see what's involved.
Don't limit yourself to the numbers "We have what's called our 'What's Happening' board," says Jim Annis, president of Bonanza Nut & Bolt, in Sparks, Nev. The board includes motivational snippets prepared by Annis, a daily Far Side cartoon, and the minutes of every team meeting that took place that week. "It's amazing how often that board is read on a daily basis." The scoreboard at Oasis Inc. in Seattle not only tracks the company's financial performance and stock value, it also lists Oasis' top 25 or 30 clients. "Everybody's aware of who's really providing us with our dollars," says VP and co-owner Michael Taylor.
Include attention getters, like contests. Acorn Manufacturing Co., in Mansfield, Mass., posts a daily sales and shipments report, but the company also runs regular contests to guess total pieces shipped, with the weekly winner getting $10 and the monthly winner $40. "Everybody's gotten into that," says vice president Eric DeLong.
Help people track their own performance, not just the company's. One side of the hallway at Woodpro Cabinetry, in Cabool, Mo., has all the company-wide numbers: sales, profits, material costs, people costs. But each of Woodpro's 12 teams has its own board as well, with productivity, rejects, and people costs shown in graph form. As a bonus, the boards also have pictures of team members, and a special area for pictures of kids and other family members.
Editor's note: this article was excerpted from Open-Book Management: Bulletin. Copyright 1997, Open-Book Management Inc.