EOS® tutorial: creating your company Scorecard
When it comes to measuring the traction of your team, it’s very common to lack consensus regarding the KPIs that matter. The Scorecard creates alignment on what matters to stay on track.
Picture this: the Head of Sales at a B2B company presents his team’s numbers for the past month, happy to have reached her quota. The next month, the CEO starts fundraising and needs to put together the company traction data for the last quarter.
When looking at the Customer Acquisition Cost (CAC) and comparing it to the industry benchmark, she discovers that it’s 2.5 times higher (a red flag for any investor). How did this misalignment happen? Why didn’t the Head of Sales know that measuring CAC was as critical as Revenue or Average Sale Ticket? Are there any other KPIs that the CEO will discover for other areas that can jeopardize the fundraising process?
Companies face situations like this example constantly. The pace is very fast, new people join the team, priorities change and issues arise every day that must be solved. However, it’s key to devote time aligning the management team and then spend little time pulling data and checking the scorecard traction to detect problems and correct them.
In case you don’t know what EOS is
Before continuing to the tutorial, I want to briefly mention that EOS is a complete methodology to run companies. If you are interested in learning more, you can find the rest of the articles I wrote in the EOS collection.
Tutorial: how to build the EOS Scorecard
Step 1 — Explain the objective to the management team
The only participants in this exercise, are the managers of the company. For this group, it’s important to explain the benefits of having a Scorecard, how we will do it (explain the steps of this tutorial) and the desired output (an example is included at the end of this article).
Step 2 — Build a list of all the candidate KPIs
We asked each participant to think what are their ten most important KPI to know if the company is on track, and to submit them to the Integrator who will later consolidate them.
Step 3 — Keep, Kill, Combine
Once every participant submits the list of KPIs, the Integrator must kill the ones that are not “Scorecard material” (very hard to obtain or not clear enough). Also the Integrator must combine duplicate or similar KPIs and keep the ones that have the most potential. The result is a short list of up to 10 KPIs.
Step 4 — Create the Scorecard
The Scorecard is a simple table containing up to ten KPIs:
- Owner
- Title
- Description
- Weekly Goal
- Unit
- Source (where the data comes from)
- Sales per week of the Quarter
Step 5 — Communicate to management team
Consolidating the KPIs, creating the Scorecard and communicating its implementation to the management team are all tasks for which the Integrator is responsible.
Once the Scorecard is ready, it must be explained and the Integrator is responsible for using it during the L10 meeting.
Some important things to consider
- The data included in the Scorecard must be easily obtainable. For example, having to run database SQL queries won’t work. But pulling the KPI from a CRM report is a good idea.
- I recommend designating a person responsible of updating data weekly. This person is usually the Integrator but you can designate another role. The idea is to have the updated data available for the L10 meeting.
- Show visual indicators to help easily identify which KPIs are going good (green) and which are falling behind (red)
- In my experience, some KPIs are not well suited for a weekly update, but are not Rocks either. Consider adding monthly KPIs to the Scorecard to track important variables that make sense to measure every 30 days,
Tracking the L10 meeting scores
I highly recommend including the L10 weekly score in the Scorecard, to easily track it over time and know if it’s improving. I’ve usually added a chart like this one in the Scorecard:
A real example
In case you are wondering what a real Scorecard looks like, I’ve included a real example below. It’s easy to see which KPIs are on track because we use conditional formatting (a Google Sheets feature) to display cell colors depending on the values of the KPIs:
Finally, you can see below that we added a monthly set of KPIs that we also want to track. These are updated weekly but we only analyze them at the end of the month.
If you are interested in learning more about EOS, you can find the rest of the articles I wrote in the EOS collection.
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