Keeping Score

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This year a series of strategic-planning sessions produced new goals--another Pipe Dream--and the big board was updated accordingly. This year, too, the whole company began to sprout scoreboards. (P.S.: The company is currently beating this year's version of Al's Pipe Dream.)

CompuWorks calls itself a systems integrator, but it makes money in a variety of ways. There's a sales department and a service-and-installations department. There's one group that develops custom software and another group that conducts computer training classes. The company's plan called for revenue and earnings contributions from each of the departments. The departments themselves had to figure out how to get there and how to measure their progress.

The solution? More scoreboards. Groups got together to brainstorm. What are our key numbers and our targets for improvement? Where do we have to be each month? And then the plaintive question: Has anybody here got any artistic talent?

Some did. In the custom-software group, Marianne Hall designed a striking Yellow Brick Road scoreboard, with sales dollars up one side and the wizard in a balloon marking progress. And what drives sales dollars? "We have two things we do," explains programmer and analyst Deb Van Tine, "billable time and internal time. So you can see"--she points to the scoreboard--"here's Dorothy, representing billable time, and here's the witch, representing internal time. We want to have Dorothy ahead all the time."

Other departments were more modest--not to say artistically challenged--in their efforts. The sales department produced a picture of nearby Mt. Greylock, with numbers indicating total sales, gross profit, and sales expense per gross profit dollar. The training folks created a vase with paper flowers: hit certain targets for billable hours or students trained, and you get to put a flower in the vase. The service department contented itself with a whiteboard-and-marker chart indicating each person's percentage of billable hours by month. Every department established targets by month, quarter, and year; each had a small budget for rewards if it reached its goals. Presto: everyone was working for objectives that fed the pushpins on the big green board. "People don't necessarily feel they can change the big board directly," says Bauman. "What they do feel they can do is change their numbers."

Performance management
Scoreboards force a level of accountability--hence performance--that's often missing in small companies. The numbers come in fast, usually every week. They're watched not just by the CEO but by every manager plus quite a few employees, so problems get addressed faster. "It's the feedback loop that makes the difference," says Douglas Devlin, chief financial officer of TriNet VCO, a 100-employee, $250-million professional-employer organization in San Leandro, Calif. "Communicating the company's progress lets managers and employees see the effect of their work. It definitely has a positive impact on performance."

Sometimes the numbers are so much on track that the scoreboard gets--well, boring. That's when it's time to plug in new numbers to watch. TriNet has a "dashboard" scoreboard, complete with dials and gauges representing revenues, subscriber head count, and other key variables. One section of the dashboard is a space that each department uses for the numbers it wants to track--numbers that are likely to change as issues are resolved. TriNet's payroll department, for example, tracked the timing on its electronic submissions to the bank "because," explains Devlin, "we were getting close to our banking deadlines on peak days." After a while the department got its procedures under control and submitted the payroll in plenty of time, so the metric disappeared from the scoreboard. Says Devlin, "Each month, we ask the managers, 'Do you want to change your gauge?' We want every department to have something that's meaningful to them on there."

But the real value of scoreboards comes over the long haul, as people learn not just to watch numbers but to take responsibility for them and as employees incorporate the scoreboarding process into their year-in, year-out approach to the business. An exemplar of that value is Neilsen Manufacturing Inc. (NMI), a precision sheet-metal job shop and assembler in Salem, Oreg.

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