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EOS® - How To Create a Scorecard Process Template

The Scorecard is an instrumental tool within the Entrepreneurial Operating System (EOS) framework, designed to give us a clear and concise view of our most vital metrics. Use this process to learn how to create a Scorecard for your team.

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EOS® - How To Create a Scorecard Process Template

The Scorecard is an instrumental tool within the Entrepreneurial Operating System (EOS) framework, designed to give us a clear and concise view of our most vital metrics. Use this process to learn how to create a Scorecard for your team.

Introduction

What Is a Scorecard?

The Scorecard is an instrumental tool within the Entrepreneurial Operating System (EOS) framework, designed to give us a clear and concise view of our most vital metrics. 

At a glance, we want to be able to assess the company's health and operational performance. This weekly report typically tracks 5 to 15 high-level numbers, encompassing various business aspects, from sales figures to customer satisfaction rates. 

By monitoring these critical numbers consistently, we can swiftly identify deviations from targets or expected outcomes. Such early detection allows us to pinpoint issues before they magnify, driving proactive solutions. 

Essentially, the EOS Scorecard serves a dual purpose: providing a rapid pulse check on the company’s well-being and acting as a catalyst for timely action. In doing so, it ensures businesses remain on track toward their strategic objectives and vision.

Why We Use Scorecards in Our Business

We’ll be honest — when it came to numbers, we only used to rely on our profit and loss statements. However, they’re a trailing measurable — meaning, it was always too late to react to what our profit and loss statements were telling us.

So, when we started using the EOS framework, we sat down with the entire leadership team to determine the best numbers that would give us the pulse of our business on a weekly basis. We managed to whittle the list down from an initial list of 21 categories:

  • Weekly revenue: Amount of revenue generated.
  • Weekly sales: Number of sales closed.
  • Cash balance: Total amount of money on hand.
  • New leads: Number of potential clients or customers inquired or generated.
  • Lead conversion rate: Percentage of leads that turn into paying customers.
  • Customer satisfaction rate: Typically gathered from surveys or feedback forms.
  • Product returns/complaints: Number of products returned or complaints received.
  • Operational downtime: Time when machinery or systems were non-operational.
  • Employee productivity: Often measured by output per employee or team.
  • Inventory levels: For businesses with physical products, tracking stock levels.
  • Accounts receivable: Outstanding invoices that are owed by customers.
  • Accounts payable: Amounts owed to suppliers and vendors.
  • Weekly expenses: Total operational costs for the week.
  • Net profit margin: Profit as a percentage of revenue.
  • Website traffic: Number of visitors or unique sessions on the company website.
  • Customer churn rate: Percentage of customers who stopped using the business's product or service.
  • Order fulfillment time: Average time taken to complete and deliver a customer order.
  • Average sale value: Average monetary value of each sale made.
  • Project completion rate: For businesses handling projects, how many were completed on time.
  • Sales call rate: For businesses reliant on phone calls, the percentage of outgoing calls answered.
  • Social media engagement: Metrics like shares, likes, and comments across platforms.

Our Leadership’s Scorecard

We managed to get the list down to the most important six measurables:

  • Weekly revenue.
  • Net profit margin.
  • New leads.
  • Lead conversion rate.
  • Customer satisfaction rate.
  • Customer churn rate.

Why six? We’ve found that there is such a thing as too much information — it’s unnecessary to track 21 different categories every single week, and the six above give us the best pulse of our company’s health. 

These six numbers keep us the most proactive when it comes to solving problems and they help us predict what our annual numbers might look like. 

Here’s what our scorecard looks like:

Example of EOS Scorecard

Category: Our weekly measurables.
Owner:
The person accountable for delivering that specific measurable each week.
Goal:
Our goal number for the week.
Dates:
Filled in with the measurable for the corresponding week.

Our CMO is in charge of collecting these measurables from their owners each week before our leadership meeting. They will red-flag any categories that fall short of the goal for discussion during the meeting.

How To Create a Scorecard

Step-by-step Guide to Creating a Scorecard for Your Team

We believe that every team can maximize the benefits of implementing Scorecards in their weekly meetings. That’s why we’ve created a step-by-step guide to choosing your team’s unique categories and creating your own Scorecard.

1. Define Key Numbers: 

  • Gather your team for a brainstorming session. 
  • Visualize a scenario where you can only access a few essential business numbers. 
  • Discuss and decide on the vital categories that need weekly tracking. 
  • Consider categories that make sense to your department. For example, the marketing department might want to consider social media engagement numbers, while the sales team will be more interested in the number of outgoing calls they do weekly.
  • Aim for 5-15 essential numbers, ideally leaning towards five. 
  • Plug these categories into your Scorecard template under the “Category” heading.

2. Assign Accountability: 

  • In the Scorecard, list who is accountable for each category under “Owner.” 
  • Ensure only one person is designated as accountable for each number. 
  • Remember, the accountable person is the one responsible for delivering the number, not the one inputting it.

3. Set Weekly Goals: 

  • For each category, decide the expected goal for the upcoming week. 
  • Align these weekly goals with your team’s one-year plan.

4. Date Your Scorecard: 

  • Insert the upcoming week's date in the first date column of the Scorecard.

5. Determine Scorecard Management: 

  • Decide on the individual responsible for collecting and inputting weekly numbers. 
  • Outline the process for how this person will obtain numbers from each accountable team member.

6. Implement and Monitor: 

  • Regularly review the Scorecard during your team’s weekly meeting to ensure alignment with your vision. 
  • Over time, observe multi-week trends to identify patterns. 
  • Once you’ve collected 14 weeks worth of data, let the first week's data roll off but store it for future reference and historical analysis.

And there you have it! Your initial Scorecard will evolve and prompt an organizational change. By providing hard data, it highlights and predicts issues, guiding your team to address root causes, ensuring alignment with vision, and enhancing accountability and clarity within the team.

Tips for Using Scorecards

To get the most out of our EOS Scorecards, we use the following:

The 7 Truths

You must believe that:

1. What gets measured gets done.

2. Managing metrics saves time.

3. A Scorecard gives you a pulse and the ability to predict.

4. You must inspect what you expect.

5. You can have accountability in a culture that is high trust and healthy.

6. A Scorecard requires hard work, discipline, and consistency to manage, but it’s worth it.

7. One person must own it.

The 6 Fundamentals

1. Review weekly with your leadership team.

2. 5-15 numbers.

3. Someone is accountable for each measurable (who drives it?).

4. There is a goal for each measurable.

5. If the goal is not hit, you “drop it down.”

6. 13 weeks at a glance (patterns and trends).

You’re on an Island

You're on an island is an exercise where you ask a team to imagine they are on an island with no contact with the business. What 5-15 numbers would give them a clear sense of how the business is performing?

Get the complete EOS® toolbox. 

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