Keeping Score

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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.

Back to the flamingo. Every month, support-services manager Heather Patrick tapes the "water level" onto the side of the pool. That's the company's year-to-date profit, and employees are learning that the profit level determines how much is available for their bonuses. Every month, too, Patrick moves the flamingo up the ladder that goes to the diving board. That scale shows the goal for Haworth sales, and the flamingo's foot marks the progress of Elements IV Interiors toward reaching that number. If the company hits the goal, the flamingo dives in--so to speak. Meeting both profit and Haworth goals triggers quarterly payouts.

Elements started out scoreboarding only those two numbers. As scoreboarders become more experienced, they learn to put up a cascade of numbers--tracking, in effect, all the lower-level metrics that drive the company's key objectives. A few miles down the road from Elements IV Interiors is Gasper Corp., a $6-million developer of management systems for banks' computer networks and automated teller machines. Where's the scoreboard? Well, there are dozens of computer-generated charts plastered all over the walls, but the up-to-the-minute data are stored in an intranet, where they're available to all the company's employees at the click of a mouse. Open up the home page and you see a menu guiding you to the data. Click on "Gasper Corp. Key Success Factors" and you call up the latest information on the number of new orders, the revenue from new orders, the anticipated revenue from systems sold but not yet installed, and the revenue from maintenance of installed systems.

At Gasper, the key success factors focus on revenues. "That's where the greatest variability is," explains founder David Gasper. To realize the company's revenue goals, salespeople have to hit their targets. Installers must work efficiently, getting new systems up and running on schedule. Tech-support people need to respond to problems quickly and effectively so that word of mouth about Gasper remains favorable. Software-development teams have to be on time and on budget with new releases so that products don't fall behind in the marketplace.

Not content with keeping all the data on the computer, Gasper puts the charts on department bulletin boards and in conference rooms so people can see the information, talk about it, and act on it. A recent problem with timely complaint resolution, for instance, showed up instantly. "When something like that happens, we're all trying to look for solutions," says Mark Marratta, a senior software engineer.

Building buy-in and unleashing creativity
The new scoreboarding is essentially a learning process. But what makes learning effective? As any teacher will tell you, it's when learners participate actively in the process rather than watching passively from the sidelines. Scoreboarding gets employees involved in their own learning. That means that they not only grasp the objectives--and the many numbers that drive them--at a gut level but also take on those objectives as their own.

Check out how the process has unfolded at CompuWorks, the computer-systems integrator. Last year a team of employees at the Pittsfield, Mass., company painted a big section of office wall green and marked off 52 weeks along the bottom. Up the left side, they inked in net profits in dollars. Then they stretched various colors of ribbon diagonally across the makeshift graph, indicating their goals for weekly performance. (The blue ribbon, indicating CompuWorks' ambitious plan, was promptly labeled "Al's Pipe Dream," in honor of president Alan Bauman.) As the year progressed scorekeeper Kristin Czelusniak stuck pushpins into the scoreboard once a week, showing the level of profits earned that week, and tied red yarn to the pushpins. Over time, the yarn created a handy chart of performance actuals that could be compared at a glance with performance benchmarks.

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