Good data begins in your book­keep­ing and account­ing depart­ment.  If it also ends there, you have wast­ed one of the most valu­able tools in your tool box.  The pow­er in your data is with your peo­ple.

Every­one likes to keep score.  We all have an innate desire to suc­ceed. Those two facts, cou­pled with putting the right data into the hands of the right peo­ple in a time­ly way, can trans­form your busi­ness.

We have often heard the adage, when it comes to real estate, what is impor­tant is loca­tion, loca­tion, loca­tion.  When it comes to peo­ple, what is impor­tant is com­mu­ni­ca­tion, com­mu­ni­ca­tion, com­mu­ni­ca­tion. As CEOs, we focus our com­mu­ni­ca­tion on the vision, pos­si­bil­i­ty and next big sale of the day.  These types of com­mu­ni­ca­tions are crit­i­cal in cre­at­ing cul­ture and build­ing a cohe­sive team.

Your employ­ees also need clear com­mu­ni­ca­tion on their indi­vid­ual, dai­ly roles. Have you com­mu­ni­cat­ed clear­ly what it means to do an excel­lent job?  What do they need to do today to make the com­pa­ny vision a real­i­ty tomor­row?  A job descrip­tion is a good start, but dai­ly and week­ly mea­sur­ables built from that job descrip­tion cre­ate a win­ning for­mu­la for both you and your employ­ees. That is where score­cards come in.

You set your employ­ees up for suc­cess when you empow­er them with their own indi­vid­ual score­cards.  What are the one to three mea­sures that real­ly mat­ter in their job?  That is a sim­ple ques­tion, and one that can be a slip­pery slope. Mea­sures have con­se­quences, and the wrong mea­sures are just as pow­er­ful as the right ones, but in a neg­a­tive way.  Tak­ing your time and think through what makes a moti­vat­ing mea­sure­ment is key.

Here is an exam­ple from a pro­fes­sion­al ser­vices firm.   A CPA friend was con­fid­ing in me one day that she was let go because she was “too effi­cient.”  She often accom­plished jobs in 50% or less of her bud­get­ed hours.  Her boss told her that if a bud­get for a job was 6 hours, she need­ed to spend 6 hours on it.  Get­ting it done in 3 wasn’t a suc­cess.   Based on her “per­for­mance,” she was ter­mi­nat­ed.  She is a stel­lar CPA, and this firm lost a key tal­ent by using the wrong mea­sure.

A bet­ter mea­sure might be rev­enue per labor dol­lar. In a ser­vice firm, your employ­ees are your biggest asset. You invest in them in terms of wages, ben­e­fits and train­ing with the expec­ta­tion of a return.  One mea­sure for this is rev­enue per labor dol­lar. In oth­er words, how many dol­lars of rev­enue does an employ­ee pro­duce based on your invest­ment in them?   If your cul­ture is more team ori­ent­ed, this met­ric might be bet­ter as a team goal.

If you cou­ple the rev­enue per labor dol­lar met­ric with one or two that mea­sure cus­tomer sat­is­fac­tion, like days accounts receiv­able, new busi­ness refer­rals from exist­ing cus­tomers or con­tract renewals, now you have a pow­er­ful set of met­rics for your employ­ees or your team.

What makes them pow­er­ful?

  • First, they are under­stand­able by every­one on the team. Every­one can under­stand if it takes on aver­age 3 days or 60 days for a cus­tomer to pay their invoice.  Every­one can under­stand rev­enue per labor dol­lar or how many refer­rals came in from exist­ing clients.


  • Sec­ond, they are con­trol­lable by the peo­ple that are being mea­sured by them. Rev­enue per labor dol­lar, and con­tract renewals are some­thing your employ­ees can relate to their every­day activ­i­ties.


  • Third, they are self-bal­anc­ing by design. If my only mea­sure is rev­enue per labor dol­lar, the focus is pure­ly on today’s prof­it. By com­bin­ing rev­enue per labor dol­lar with a cus­tomer sat­is­fac­tion met­ric, you are bal­anc­ing the focus on today and tomorrow’s prof­it.


  • Fourth, they fit the cul­ture of the busi­ness. What are your busi­ness val­ues?  For exam­ple, is indi­vid­ual per­for­mance para­mount?  Or is it more about the team?  Review­ing your mea­sures for val­ue fit allows them to build on your cul­ture. Oth­er­wise they will tear your cul­ture apart.


  • Fifth, your score­card has a max­i­mum of three goals. Study after study on goal set­ting tell us that if you have too many goals, it is worse than hav­ing none.  Where do you real­ly want your employ­ees’ atten­tion to be?  What is most rel­e­vant in their job to the over­all achieve­ment of the company’s goals?  Keep focus­ing until you find the best answer for your cul­ture.

Fall is the time when we are focused on how 2017 will end. It also the best time to begin plan­ning for 2018.  As you pre­pare for 2018, why not empow­er your team with score­cards?

At Mack­ey Advi­sors, we love help­ing busi­ness own­ers achieve their goals.  If we can help you devel­op score­cards for your busi­ness, please reach out to me at or 859–331-7755.

To your pros­per­i­ty,