on March 25, 2022 (last modified on April 20, 2022) • 10 minute read
Ever set a big company goal to 3x revenue in a year? Only to revisit it in 6 months and realize you aren’t even close to hitting your goal.This happens more than you might think. While you might have the best intentions, a big goal is nothing without a set strategy and milestones to help you achieve it.That’s where creating KPI scorecards can be valuable. They can help you measure progress towards your big goal throughout the year.
In this post, we’re sharing what a KPI scorecard is, the difference between dashboards and scorecards, the main benefits, and 7 ways you can use them to improve performance.
A KPI scorecard is a tangible way to measure progress towards a specific company, department, or individual goal. So, you might have one scorecard for each employee, another for each department (think sales, marketing, customer support, etc.), and another for the company as a whole.There are three main KPI scorecard types: comparison, grading, or by time period.
In fact, all of the respondents we surveyed have some experience with scorecards: 93.75% are using them, while 6.25% have used them in the past.Note: 43.75% of our respondents work in B2C Services or Products. 31.25% are in B2B Services or Products. And, 25% work in agencies.
And, more than 66% of all respondents have at least 2-5 scorecards.
When used well, the main benefits of using KPI scorecards include:
Many people confuse dashboards and scorecards. That makes sense given how similar they can be.However, the biggest difference is that dashboards are used for overall monitoring. On the other hand, scorecards are for managing performance and progress.
Or put another way, most business dashboards are composed of many individual scorecards.
For instance, you might have a company-wide revenue dashboard to keep tabs on the company’s bottom line. Then, each sales rep might have their own scorecard to measure and manage their performance.
While there is no standard consensus, half of the respondents in our survey have 5-10 KPIs included in one scorecard.
Note: It is important to include a mix of leading and lagging indicators in your scorecard, so you have a balanced view on what’s happening.
Given that scorecards can promote greater accountability and transparency across your company, it is no surprise that 34.38% of respondents share them with managers. 25% of respondents share them with C-level executives. 21.88% of respondents share with directors. And, up to 15.63% of respondents share them with the entire team.
Here are some of the most common ways you can use KPI scorecards to improve performance.
By far, the most important approach is to monitor progress towards key company-wide initiatives.
“A business should be using KPI scorecards to measure and track progress towards specific goals,” says Claire Westbrook of LSAT Prep Hero. “KPI scorecards help a business focus on what is important by measuring progress towards specific goals. They allow a company to track performance, identify areas of improvement, and make changes in order to improve overall performance.
Additionally, KPI scorecards can help a business track trends over time, so that any changes in performance can be identified and addressed. KPI scorecards brought a lot of benefit to our business by helping us track our performance and identify areas for improvement. We were able to see at a glance how we were performing against our targets and make adjustments as needed. This helped us to achieve better results and grow our business. About half a year ago, our KPI scorecard showed that our website was not converting enough visitors into customers. We used this information to make some changes to our website design and saw a significant increase in conversion rates as a result.”
For instance, Avinash Chandra of BrandLoom says, “KPI scorecards help us effectively achieve key business objectives. Not only does it help achieve our business goals, but it also helps achieve our employees’ productivity and customer satisfaction.
KPI scorecards help transparency at all levels. It translates vision and strategy into figures which is very easy to understand and learn. If the business is lagging, then the KPI scorecard helps figure out our weaknesses and set them to improve our performance. Hence, using KPI is a must for every small or large organization.”
These scorecards can also be invaluable tools for managing employee performance. So instead of managing based on “butt in seat time,” you can manage based on output and results.
“KPI scorecards helped us in determining desirable characteristics among individual team members to set the performance targets,” says Rajat Chauhan of Ace Infoway. “Also, it helped us to align our business strategy parallel to business goals and finally identify how our team can positively impact a development project effectively, and most important consistently. We become proficient in identifying project-based talent within our teams to assign different tasks and ultimately this helped us achieve better project delivery, each time.”
Related: How to Set, Track, & Achieve Your Monthly Sales Goals
On top of managing employee performance, you can also use scorecards to help employees see how their individual actions impact broader organizational goals.
“KPI scorecards can help improve employee engagement by aligning individual efforts with broader organizational goals,” says Roy Morejon of Enventys Partners. “Communicating strategy across an entire company and using a simple framework to monitor its execution ensures that everyone is working towards the same objectives, and allows employees to directly visualize their impact. When team members can draw a connection between their work and the benefits it has to key metrics, they’re far more engaged in the workplace and aware of their value. Creating and sharing KPI scorecards at our business transformed how our employees perceive their work in relation to our overall strategy, and that visualization boosted productivity.”
Related: Goals Based Reporting: Everything You Need to Know
You can also use employee scorecards to inform any necessary management changes, like when to hire additional staff.
“One reason why businesses should use KPI scorecards is to improve management decisions,” explains Matt Wooldridge of Invision Roofing. “For instance, if a company starts using the scorecard to note any changes, then they’ll also create a special metric system to analyze the data. It can help achieve the strategic goals set by the managers. Therefore, it is much easier for business owners to evaluate the KPI scorecards to make a data-driven decision on how to improve office management.
Last year, we began using KPI scorecards to manage our company’s performance level. It allowed us to track the progress of our goal achievement for the year. This is because data gathered by scorecards provided insights to improve the company’s operational performance. Hence, a data-driven approach further allowed my employees to focus on key areas that needed attention. Also, the managers would use the right measures to analyze the KPI scorecards that helped establish accountability and maintain a balance between operational factors as well.”
Related: Management Reporting: 8 Best Practices to Create Effective Reports
When the entire company is using scorecards and dashboards, you can eliminate many status calls/meetings. So, employees and managers can fire off a quick message with their scorecard updates each week instead of spending hours each month in pointless meetings presenting results that could have been an email or Loom.
“KPI scorecards are excellent for businesses because they allow every relevant stakeholder to have a clear picture of performance trends without needing to call time-consuming meetings or send distracting emails with questions,” says Stephen Light of Nolah Mattress.”They transformed the rate at which we take action, because when every single person is speaking a common language, strategic conclusions are drawn far quicker. That’s what KPI scorecards provide: a common language that eliminates the need to explain data and shifts the focus to next steps. KPI scorecards allow every employee to stay up-to-date, and empower teams to make informed decisions regarding key metrics at much faster rates.”
Related: How to Run Weekly Meetings Your Team Will Actually Enjoy
You can also use scorecards to understand your highest ROI marketing channels and campaigns.
“As the head marketer at a digital marketing company, I use KPI scorecards to determine the best integrated marketing technique for other businesses,” says Bryan Philips of In Motion Marketing. “By studying four key areas; exposure, timing, engagement, and repeat engagement, I help businesses determine which marketing channel (email, content, or social media) is their best investment. Customer satisfaction and interaction are the leading factors in a business’s success or failure, making it vital that companies understand their audience’s demographics and engagement levels.
Using a KPI scorecard template makes it easy to understand and adjust business practices as new realizations are discovered through customer data. In my previous position, I mapped the customer journey through KPIs and reduced the average sales cycle by 35%. The success of this strategy significantly raised revenue, increasing company growth by 110%. Given my success in that position, I now use the same strategy at my new business to assist other companies in increasing marketing revenue.”
Analyzing your scorecards (and trends!) can provide insights to help with quarterly and annual company planning.
“A KPI scorecard across all departments helps a business deduce some prominent patterns,” says Lauren Proctor of BenchMade Modern. “Every quarter, companies can conduct an in-depth analysis of what processes and techniques helped achieve goals. An insight into each employee’s performance every quarter can devise a proper strategy, including deploying incentives accordingly.
Utilizing KPI scorecards provided a significant opportunity for all my team members to collaborate successfully. The ease of accessing our KPI dashboard has encouraged everyone to visually see the data of their strengths and weaknesses. Identifying key problem areas proved beneficial in coming up with creative solutions and working together for the company’s future success.”
While KPI scorecards can offer a ton of benefits, creating them from scratch can be tedious. It often means pulling data from multiple tools and then building it in Excel or Google Sheets yourself or bugging your team to build it.Fortunately, there is a better way to build scorecards using automation. With a business dashboard software like Databox, you can sync all of your tools and then auto-populate your scorecard each week. You can even get email, mobile pish notification, and Slack updates on a daily, weekly, or monthly basis. Ready to get started? Create your first scorecard for free in Databox today.
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