Scoreboards that chart the company numbers were popular a decade ago, but slowly fell into disuse. Today, scoreboards are back but they're displaying new types of information.
What gets measured gets done--if your company posts the right kinds of numbers. Which is why scoreboards are back--with a twist
Consider three questions. but be warned: the answers may have a dramatic effect on how you run your company. Question 1: What are the business goals you'd like to hit this year? I'm thinking of specific numbers--sales growth, profits, maybe operational targets like on-time delivery or percentage of revenues from new products. Those are the goals that, if you do hit them, will entitle you to look back and say, "Wow! 1998 sure was a great year for our company." Question 2: You have your objectives. Who else in the company knows what they are? Are you the only one lying awake nights worrying about how to reach them? Question 3: What would happen if each person in your organization knew what the goals were and tracked the company's progress toward them on a big scoreboard, and not only monitored the numbers but also understood how he or she could help push them in the right direction?
What, indeed. "You'll really need to stand back," says David Gasper, CEO of Gasper Corp., "because your people will make those numbers happen."
The idea of putting numbers on a scoreboard has a checkered history. Ten or 15 years ago companies discovered (or rediscovered) a simple truth about human nature, summed up in the adage "What gets measured gets done." Managers began putting up whiteboards, chalkboards, and corkboards. They cranked out data on defects per 1,000, average time spent on hold, and dozens of other performance measures. It was hard to walk into a plant, warehouse, or office without seeing a metric or two charted on the wall.
For a while, the numbers on the charts improved. People paid attention to the boards and figured out how to better their performance. But then something funny happened. A week might go by without anyone updating the scoreboard. Or maybe a whole month. Somebody finally did mark in the new numbers and noticed there hadn't been much improvement--which meant that nobody was eager to update the board the next time, either. Before long the boards fell into disuse. Soon they were taken down.
With hindsight, that outcome isn't so surprising. The real truth about human nature is that what gets measured does get done--but only for a while. Then other human reactions are likely to cut in, such as "Why are they always measuring us?" and "Who cares if we make those numbers, anyway?" A chart that tracks job performance can come to feel like an edict from management: make the numbers or else. When people believe Big Brother is watching them, they do exactly what they have to do, and no more.
Today the pendulum is swinging back toward scoreboards--but with a couple of twists. For one thing, the boards now sprouting on plant and office walls display a ton of information, such as operational figures tracked on a dozen different scales, department-by-department performance, and companywide financial data. The giant board at Colonial Mills Inc., a $7-million specialty-rug manufacturer in Pawtucket, R.I., stretches 30 feet or so, covering most of the lunchroom wall. A big gold rocket ship in the middle shows the year-to-date profit. Columns for winding, braiding, and the other production departments show monthly output--cans filled, square feet braided, and so on--all compared with the plan. What happens when people see that information month in and month out? They learn the connections between work-group or department performance and big-picture results, knowledge that goes a long way toward answering questions about why the numbers matter. Since there's no law requiring a scoreboarder to practice open-book management, the big-picture numbers may be something other than actual sales or profits--for example, an index comparing companywide performance to the plan. Regardless, the message is the same: this is the real measure. It's a measure of our business success and thus an indication of job security and opportunity.
A second big difference between the old and the new scoreboarding is that now the employees typically get involved in setting targets, creating the boards, and figuring out what rewards or bonuses to give themselves if they succeed. "Our targets aren't the powers-that-be coming down and saying, 'This shall be the number," says Colonial Mills CEO Don Scarlata. "They're numbers everybody has discussed and signed off on." It's much the same at most scoreboarding companies. Employees take part in the planning process, discussing (and coming to understand) the annual goals. On the department level they challenge themselves to hit objectives such as cutting cycle time and reducing accounts-receivable days, and then they build homemade boards to track their progress. Usually, the company owner and employees work out a deal for a bonus--or maybe just a celebratory barbecue--if they "win." The from-the-bottom-up process transforms the connotation of the scoreboard from them measuring us to us measuring ourselves.
Maybe most important, the new scoreboarding is a dynamic phenomenon. The goals and metrics change. Employees learn to think in new ways. "People start asking the kinds of questions a business owner would ask," says Brenda Wilbur, chief operating officer of CompuWorks, a $4-million computer-systems integrator. "They ask, 'Why are we leasing equipment instead of buying it?' 'Could we purchase this any cheaper if we bought it in bulk?" One CompuWorks employee volunteered to water the plants every week, another to paint his own office--all, says Wilbur, so that the expense numbers on the scoreboard would turn out better.
Look at scoreboarding in action at several companies and you can see how it evolves into a tool that gets people focused on the figures that would make a great year.
Identifying the key numbers
The scoreboard at Elements IV Interiors, a $9-million office-furniture dealer in Dayton, sits unobtrusively in the break room. In fact, you might not take it for a scoreboard at all, because it's a not-too-big cartoon of a flamingo poised to plunge into a rose-colored swimming pool. On the other hand, it is a picture with meaning.
Elements IV Interiors--the Roman numeral reflects the company's founding by four partners--is new at score-boarding and just recently faced the challenge of determining its objectives. Owners Bruce LaVielle and Kim Duncan were clear about one objective, at least: they wanted a certain amount of net profit. But they knew they couldn't pursue profit without keeping a watchful eye on another number, namely, shipments of Haworth Inc. furniture, their primary product line. If Haworth sales ever tank, their company risks losing its valuable franchise.
