Executive Education

Is Your Balanced Scorecard Hurting Your Results?

Sarah winced as the hourly stack rankings beeped through her smartphone.

She didn’t have to say a word. Karin knew that look from the inside out. She’s been on the frantic receiving end of such beeps. Hourly results coming in 15 times a day—quality, efficiency, sales— all neatly ranked as a constant reminder that she wasn’t doing enough. And just in case the beeps didn’t get her attention, at least one or two of the hourly blasts were typically followed up by a call from her boss: “Have you seen the numbers?”

Sarah interrupted Karin’s painful flashback. “I’m sorry, but I have to huddle the team. We have to get to 94% customer satisfaction by the end of the day.”

“What are you planning as your key message?” Karin asked. Sarah looked at her as if she was crazy. “Ninety-four,” she said. When Karin met with Sarah’s team later in the day and asked what they were doing to improve the customer experience, she heard more of the same.

“We just need to get to ninety-four,” with not one mention of the behaviors or methodology needed to improve the customer experience.  Such metrics matter. A balanced scorecard, with well-selected key performance indicators, will reinforce your strategy and align actions with goals. But be sure your team knows, the score is not the game.

Your customer doesn’t care what you received on your internal scorecard. And it’s likely that those 27 metrics and the spreadsheets that go with them are distracting your team from the behaviors they most need for success.

How Your Scorecard Distracts Your Team From the Win

Imagine that you go to the doctor and are told that your blood pressure is high. The doctor prescribes a medication, change in diet, and more exercise. Assuming you are motivated to get healthy, what would you do when you leave the doctor’s office?

You might go to a pharmacy, fill your prescription, and then head home. Once you are there, you might evaluate what food you have on hand and make a shopping list that includes whole grains, lean meats, and vegetables. You might take a walk and start an exercise plan.

Now imagine instead that you leave the doctor’s office and first go to a medical supply store, pick up a blood pressure cuff, then head home and start taking your own blood pressure every 15 minutes. Your blood pressure is still high, and now you’re stressed; you have to achieve results! So you start taking your blood pressure every 10 minutes, only to see your blood pressure rise even higher.

We don’t know any healthy people who have ever done this with their blood pressure, but when it comes to leading business teams, we see managers do it all the time. They focus on the score because they mistake the number for what it actually represents.

Your blood pressure score is not your blood pressure. The score is a set of numbers on a readout that tells you what’s happening in your body. It is an indicator of health—it’s not health itself.

If you’re in sales, your average sale per customer is an indicator of your relationship with your customers, it’s not the relationship itself. If you’re in customer service, your service ratings are indicators of satisfaction, they’re not the service itself.

Whatever measurements you use in your business, it’s vital to help your team understand that, Measurements are not what they do; measurements represent what they do.

When you focus too much on the score, your team loses focus on the behaviors they need to win the game. The only real and lasting way to change the score is to play a better game.

Want a better blood pressure score? Take your medicine, eat well, and exercise.

Want better business metrics? Identify the key behaviors that produce results and do those things consistently.

We know you’ve heard the stories of companies that focus on quarterly gains to please Wall Street and put off crucial long-term investments in technology, people, or infrastructure to sustain growth.

Think about it this way: No coach has ever said, “We may 
have lost the game, but we owned the scoreboard for eight of nine innings!” To help you avoid these pitfalls, look for these five warning signs in your organization.

  1. False sense of competition

If, “We have to beat Joe’s team!” is a louder rally cry than, “Make a genuine connection with every customer!” your team is missing the point. A little smack talk may be fun, but too much focus on the stack rank, will drive short-term behaviors.

Competition can be healthy and productive. Compete to provide the best service. Work hard to offer the best product. Strive to provide the best experience you can—not to beat Joe. Be sure your team knows that your product, service, or experience is the real game.

  1. Gaming

Employees who tell customers they’ll get in trouble if they don’t rate them a “10,” and over-reporting sales figures are all examples of gaming. Gaming refers to behaviors that change the score but aren’t really about playing the game well. Gamers have no focus on real results.

We’ve seen astounding creativity in the huge lengths some employees and managers will go to game the system. If they spent as much time improving the quality of their work as they spend working the work-around, they’d be knocking results out of the park.

When you exclusively focus on metrics, you encourage this kind of gaming. People will do what you ask them to do—in this case, to change the score. And they do it creatively, which wastes time, is often unethical, and annoys your customers.

  1. Volatile performanceYou can’t respond to most metrics on an hourly (or even daily) basis. When you do, you’re likely to be reactive and more annoying than helpful. When you’re reactive, you exhaust your team and they will eventually ignore you.

If metrics go up when you rant, scream, or dress like a superhero, and then rapidly come down, take a step back and plan a consistent approach to reinforce key behaviors, again and again.

  1. Unintended consequences

If, “I fixed this, but broke that,” sounds like the sad country music soundtrack of your group’s performance, you’re likely focused on one or two numbers rather than on the key game-changing behaviors that will lead to lasting performance.

In every business there are one or two vital behaviors that will improve your overall results. Be sure to focus on these early and often. Then build on that foundation.

  1. Stupid decisionsThis happens at all levels but can be particularly disastrous when you become focused on a short-term adrenaline shot to force up results.

    “Oh sure, we can bring on 500 people in 10 weeks to get the contract,” is not rational thinking. Focus your decisions on activities that lead to consistent upward trends and sustained performance. Respond with and celebrate consistent improvement, not flash-in-the-pan reactions to today’s score.

You know you’re Winning Well when employees are more proud of an actual customer experience or the difference they make in quality than of numbers on an Excel spreadsheet.

Written by:

Karin Hurt (Baltimore, MD) is a top leadership consultant and CEO of Let’s Grow Leaders and co-author of WINNING WELL: A Manager’s Guide To Getting Results – Without Losing Your Soul. A former Verizon Wireless executive, she was named to Inc. Magazine’s list of great leadership speakers.

David Dye (Denver, CO) is a former nonprofit executive, elected official, and president of Trailblaze, Inc., a leadership training and consulting firm and co-author of WINNING WELL: A Manager’s Guide To Getting Results – Without Losing Your Soul.

For more information visit WinningWellBook.com.

Track Latest News Live on CEOWORLD magazine and get news updates from the United States and around the world. The views expressed are those of the author and are not necessarily those of the CEOWORLD magazine.
Follow CEOWORLD magazine headlines on: Google News, LinkedIn, Twitter, and Facebook.
Thank you for supporting our journalism. Subscribe here.
For media queries, please contact: info@ceoworld.biz
Featured columnists
Featured Columnists at the CEOWORLD Magazine is a team of experts led by Camilla O'Donnell, James Reed, Amarendra Bhushan, and Amanda Millar. The CEOWORLD Magazine is the worlds leading business and technology magazine for CEOs (chief executives) and top-level management professionals.