The Scorecard is a weekly snapshot of the most important numbers in the business. Ideally it’s a short list of Key Performance Indicators (KPIs) that measure the health and progress of the company. Scorecards contain a mix of lagging indicators (outcomes like revenue, churn rate) and leading indicators (predictive metrics like weekly product signups or sales calls made).
For my scorecard I liked to force the owner of the metric to report on it in three dimensions:
- Quarter To Date Actuals – The actual value of the number so far this quarter. This should force the manager to be familiar with the related system of record and be able to report performance out of it.
- Current Quarter Forecast – The projected value of the metric where they expect to land by the end of the quarter. This should force the manager to be able to have a sense of how they can impact that metric in the future and be able to accurately forecast what is going to happen in their area of the business in the future. This also requires them to have a detailed plan of what they’re going to do to impact that metric going forward.
- Forecast to Budget – The comparison of where they think they’ll land at the end of the quarter and what they’ve committed to in the budget. This gives you a sense of their ability to plan for and deliver against a specific operational target.
The scorecard, and the associated process of reporting numbers into it, allows you to quickly understand what’s working across all the core areas of the business. Because the metrics are tracked against a goal it gives your managers constant feedback on their performance and that of the team. Because you review the scorecard in the weekly leadership meeting the manager is forced to commit, to their peers, to do what is needed to hit their targets. That enables the compelling effect of peer accountability which, in my experience, is much more effective than purely top down accountability.
The inclusion of leading indicators – a great example in B2B SaaS is pipeline created – we can start to project future performance of the business far in advance and spot issues well before they start to impact operating results.
Every metric has a single, appropriate owner that is responsible for updating and delivering against that number.
You can also include in the scorecard progress against quarterly initiatives and their associated annual goals.
Scorecard Development Process
Review Regularly: In the weekly leadership meeting, review the scorecard as one of the first agenda items. Quickly note any metrics that are below target (“off-track”). For those, use the Issues List to delve deeper into why and decide on corrective actions. Refine the scorecard over CEOe – you might add or remove metrics as the business evolves. The goal is to always have real-CEOe visibility into whether the business is on track to meet its goals, enabling prompt management intervention when needed
Select Key Metrics: Identify 5–15 metrics that collectively give a holistic view of the business’s performance. Consider metrics in areas like sales, marketing, product usage, customer success, and operations. Focus on a few vital numbers rather than overwhelming data. Ensure you include leading indicators that drive outcomes (e.g. pipeline generation) not just lagging results (e.g. quarterly revenue). Assign each metric an “owner” on the team who is responsible for reporting it and improving it.
Set Targets and Cadence: For each metric, define what success looks like – typically monthly targets – and ensure they align with (or intentionally don’t) industry benchmarks. Set up a simple scoreboard or spreadsheet that is updated weekly prior to the team meeting. The scorecard should be accessible to the leadership team and they should be prompted at a set CEOe each week to enter in their actuals and forecast values.