Milan: [00:00:00] Hello again and welcome to Card Cast. So what did we talk about today?
Ged: Well, we, we talked about all the intricacies of scorecards, you know, why you should have them, how to build a scorecard, as in what should be in a scorecard. And I think the key things that we need to bring out of that, the conversation we had today around scorecards is scorecards is the specifications of the outcomes we expect from a function. We then ask for an individual to take accountability for that function. So the scorecard is for the function, not for the individual. And by having that separation, we are making it clear it’s what the function should be, achieving the outcomes rather than what the individual should be doing. Outcomes not activities.
Milan: We have a new episode here and Jet Roberts and I are here to talk about one of the cards. So let’s shuffle and see what comes up today.
And it looks like functional [00:01:00] scorecards came up. We just had a conversation, jet. So is it functional or function scorecard.
Ged: I think it can be both. I think we, we use a slightly different language here. I use the language function scorecard. ’cause I know I wanna, I want to emphasize that the scorecard is for the function. And no doubt we’ll talk more about that in, in a moment. But for me, the scorecard is all about the function. You know, it’s not about what the function does, the functional side of it, but it’s just a language thing. And I don’t think it’s important, which, which term you use.
Milan: You know, I would blame the writer here. And the fact that he is an ESL, right? Because I agree with you. It’s not that the scorecard is functional, it’s a scorecard of a function. So we are not talking about a function of a scorecard, but we’re talking about a scorecard of a function. And that is the important distinction that I’ll probably in the next edition [00:02:00] make that grammar correction in the title.
Ged: So, so this is something that often causes confusion, and now I, I normally introduce function scorecards initially to the CEO in the first quarter. So after the kickoff. I sit down with the CEO and I explain, and I, I coach them through what a function scorecard is, and then I set them the task of coming up with their own, with some guidance and, and over the first quarter, we iterate through about coming up with the CEO’s scorecard.. The reason I do that is because by the first quarterly meeting, I want the CEO to be comfortable with their scorecard. So they are able to show the rest of the leadership team that they, he or she has her scorecard and it’s now time for the leadership team to start thinking about what their scorecard should say for their functions. So it’s about setting the example for the rest of the team. So when we come into the second [00:03:00] quarter. They’re able to start building theirs out. Now I’ll, I’ll ask this question ’cause I think I know the answer. Milan. What’s the first or challenge or confusion people have about function scorecards?
Milan: They’re trying to build a scorecard around the person and not around the function. I think that’s a big piece, but you know what, I actually do want to react to what you said because while what you are saying is start with the CEO and then cascade down, I, I sometimes find it very, very difficult because, especially when you have a founder, CEO, who’s used to doing absolutely everything, it’s really, really hard without the involvement of the leadership team to zero down of what is it they actually should be doing.
So I quite often start in those situations with the leadership team scorecards, because the leaders get it very, very quickly. It’s clear because they have a functional accountability. You can start building the scorecard [00:04:00] from a functional accountability chart, right? Because once you put a mission in there.
That becomes the mission on the scorecard, you know, and it starts sort of building itself out. And then you can come back and say, okay, what do these leaders need from the CEO? Because sometimes you need to give the CEOA permission not to worry about something anymore,
Ged: Yeah.
Milan: Because somebody else has it.
Right?
Ged: Milan:.
Ged: I, I think we, I think we’re saying the, the same thing in a slightly different way, and, and I, I use that first quarter as a way of showing the CEO that he’s actually doing other people’s jobs. So the
Milan: That’s right. Yeah.
Ged: Is, no, no, no. No, no, that’s marketing. No, no, no, no, no. That’s
Milan: Mm-hmm.
Ged: Not talking about those scorecards yet.
We’ll do those next quarter. What is your scorecard as the CEO? Know, and
Milan: Mm-hmm.
Ged: Do come back with three scorecards. You know, they’ve maybe got CEO scorecard and they’ve maybe got, you know, sales scorecard and they’ve maybe got finance scorecard depending on, on how many hats they’re wearing. [00:05:00] The important thing is we want to get the CEO’s scorecard locked down, by forcing that distinction, like you’re actually doing two other people’s jobs, you know, that might mean you’re gonna end up with three scorecards, four now, but right now let’s focus on the CEO’s scorecard.
Milan: I’ve done several times with what I consider success that I would kick the CEO out of the room and I would have the leadership team build a scorecard for them. It’s very, very revealing every single time.
Ged: I love that. That’s a
Milan: Yeah.
Ged: Really good idea. I might, I
Milan: Yeah, no, it, it worked.
Ged: Your permission.
Milan: Oh, absolutely. Absolutely. We’re all about sharing here, aren’t we?
Yeah.
Ged: Indeed. Yeah. So, so you mentioned the confusion between the function scorecard and the individual scorecard. So, so how, how do you reinforce that distinction when you are asking the leadership team and the CEO to start drafting their [00:06:00] scorecards? How do you reinforce that?
Milan: The. So first sort of switch or point, if you will that everybody runs into is, okay, so this is the CFO scorecard. No, that’s the finance scorecard. The fact that the person who is in that role has a title of CFO is secondary, right? What do we need? What do we mean? What is the mission of what we consider to be our finance function or our legal function or our marketing function?
So. The mental switch of going to what is it that we need as an organization rather than what we have or what we are used to is the first big switch. Because what we are doing here is organizational design, right? And we generally come in because some change in the organization needs to happen. We are not there just to log down the way.
Everything has been done so far and this is a very powerful tool to see actually. [00:07:00] Why is that in this person’s. Wheelhouse because that’s not part of their function. Does it mean that they have two scorecards? Does it mean that there should be somebody else, or does this accountability needs to travel?
Because it just ended up there for historical reasons. So I think that when you really start thinking about it like that again, a lot gets revealed and a lot of cracks that could have been covered with duct tape of habit, you know, in the, in the organization gets rebuilt like that and allow you to actually fix it at its core.
Ged: I’ve got a recent example of that. I’m, I’m working with a, a company that are growing very, very fast. And they’ve had a, a leadership team that’s been in place for quite some time. But the roles have evolved. Over time as well. And they, they’ve realized that they need to bring in someone who is gonna head up operations, who, who is probably a more experienced person than the person who is in that role at the [00:08:00] moment. And that person’s okay with that. They, they, they know that they’re not, they’re not able to, to take that function forward in a way that it needs to as, as they grow. And. The, the conversation I’m having with the CEO is now he’s stuck between, well, you know, we can’t actually decide, you know, what the job actually involves, you know, because, you know, is it one person or is it two people?
And I said, okay, well let’s, let’s take a step back now. Why don’t we actually build out two scorecards? Because, you know, there are, there’s two groups of functional activities, functional accountabilities, that, that. Area of the business where there’s one area is two areas, three areas that that area needs to do.
So let’s build out scorecards for those individual areas, and then let’s work out who is best suited to take those on. Now, it may end up being one individual, in which case they have got two functions, and over time those functions might get combined into one. That’s okay. But let’s [00:09:00] start off by building out the specification of what. However many functions in that area are what those actual specifications are. And he said, yeah, but in a, but in a, I don’t necessarily want to go out and hire three people. And I said, well, you don’t necessarily have to, but just, just define the activities, the accountabilities that those functions need to cover. Then we’ll work out if we can find one person that can do that, or whether it needs to be two people. You is it ahead of operations and ahead of logistics, you know, or is it ahead of operations and logistics? Because the individual that you find is able to take on both functions. But let’s not presuppose that right now.
Let’s get the specification down so you know what you need to look for, whether it’s one person, two people, or three people.
Milan: Yeah, you’re, you’re right because the scorecards and the bodies don’t necessarily match one-to-one. It’s actually many to many relationship. Right? Because you can have one person holding multiple [00:10:00] scorecards and you can have a whole bunch of people sharing the same scorecard, right. Especially frontline, like, you know, if I am a delivery driver, my scorecard is probably the same as the other delivery drivers.
Right. To a large degree, I might have a different priority, or I might have different details. But as far as the accountabilities and the competencies required, and of course the values and all of the, all of those other parts, that’s going to be the same. But what is important is using the scorecard, first and foremost as the tool for organizational design to really quantify and qualify.
The accountability is that somebody in the organization needs to take care of so the organization can move forward towards its goals. How we then distribute it between scorecards and between people is is secondary. Yeah.
Ged: Absolutely. Absolutely. So, so the ne the next challenge I come across with scorecards, with [00:11:00] capturing scorecards or documenting scorecards is, is leadership team members often come to me and say, well, I don’t know what to put in my scorecard and that that astonishes me, that astonishes me. And I say, well, you know, what are the three to five things that your function needs to achieve?
Milan: So why are you here? What is it that, what is it that this company is paying you to do?
Ged: Indeed. And, and you’ve
Milan: Right?
Ged: About how you phrase that because it can very easily come across as like, no, really, you dunno what you do. And that’s effectively what, what they’re saying. You know, they’re saying, well, I don’t,
Milan: Yeah.
Ged: I can’t write it down. They said, well, okay, well go and ask someone else. Go and ask someone else to list down the three to five things that your function does. Okay. So they go away and they write it down and like, you know, they say, okay, well now how would we measure whether those things have been successfully achieved? Okay. So, you know, I can bring my metrics in. Yeah, absolutely.
You know. You know, only got three [00:12:00] metrics. That’s okay. That’s okay. You might have, you might come up with some other ones later on, but for now, let’s put those in. We’ve now got the three to five accountabilities and we’ve got some metrics and, and then we look at, you know, what are the competencies that that function, the person that takes that function on the individual.
Now what are the competencies that they need to have to be able to successfully fulfill that functional role now? And at that point you are, you’ve pretty much got a complete scorecard. You, you know, you got the, to, you got, you know, as long as you know what the, the one sentence or the one paragraph mission is, what are the accountabilities?
What are the competencies? How do you measure it? Maybe what the priorities they have this quarter are gonna, are gonna be or are now. And then core values, well, everyone shares the same core values. You’ve got your scorecard.
Milan: Absolutely. First version thereof. I think that that is a thing that that also gets overlooked. That the scorecard is a living document. You don’t get it right the first time ever. [00:13:00] Right. So good enough is good enough at this point, like, you know, is it something we can deal with? Is it something that we can live with?
And then we have our review process, and I know that’s under the card, but we have to mention it here, is that the scorecard is a critical component of your quarterly review process and. Within that process, you are not just reviewing the person. That’s why we don’t call it performance review or a team review.
We are calling it a review because you’re also reviewing the scorecard
Ged: Yeah. Yeah, yeah.
Milan: Like, is it still valid? Does it still fit? Is it still the right one? Do we need to make any changes? Right? That is a really, really important piece of that. So the scorecard will live and will evolve, and that is okay.
Ged: Yeah, no, you’re absolutely right. And I gave a big thumbs up because that’s really, really important. The, the review that hangs off the scorecard is not a performance review, it’s a coaching review. It’s a two way conversation, but as
Milan: Actually, I like to call [00:14:00] it a, I call it three-way, because it’s between the manager or the leader, between the person holding the function and the scorecard itself. So it’s a three-way conversation.
Ged: I like that. I like that. But it’s measurable because we have the scorecard.
Milan: Yes. Exactly. Exactly.
Ged: Yeah. As you say, the reviews are a separate card and a separate episode or a separate edition, so we’ll, we’ll pick that up some, some other time. As
Milan: Mm-hmm.
Ged: Notes around scorecards Milan, what, what else would you throw in?
Milan: I think that the one thing that I see is how do scorecards fit into the policies of the organization. So several of my clients and I actually really encourage that, have the scorecard as an end to the employee contract,
Ged: Okay.
Milan: When the scorecard changes, they actually signed a new version.
Ged: Mm-hmm.
Milan: Right, because then you have the track record.
This is how you are doing. And you know, there, there is just so much [00:15:00] information in that and how that, how that goes. That I, I really like that. I think that one of, one of my clients just brought it up one on their own. I was like, my goodness, this makes a lot of sense. And I started using that. So I would highly, highly recommend that because again, it’s hard to set up the expectations of the job.
Clearer than that job description that’s built on top of the scorecard or with the installation of the scorecard. That’s a marketing material. You know, its job is to attract candidates that might take care of that, but a scorecard is, the core of it
Ged: Yeah,
Milan: What’s defines the expectations, and that’s what you measure yourself against.
Ged: Yeah. So you are setting down the expectations or the outcomes the function needs to achieve, not. Activities and then the job description flows on from that. So scorecard first, job description afterwards. And one scorecard may actually [00:16:00] have several different job descriptions ’cause you might need to break it down or the other way, round two. Now one job
Milan: Yeah.
Ged: Cover several scorecard.
Milan: And I really, really want to double click on something you just said because I don’t think that it’s said very clearly. Accountability. You are not accountable to do something. You’re accountable to achieve something.
Ged: Mm-hmm.
Milan: Right? So it has to be outcome driven. That’s it.
Ged: Yep. So scorecards, we like to get them in place within the first two quarters of an engagement. Sometimes it takes a little bit longer but once you have clarity that scorecards bring your organization, everything just becomes a lot simpler, a lot smoother.
Milan: I’m actually a bit more aggressive. I’m really trying to get them in quickly because they help it so much. But yes, the prescriptive thing is two quarters is probably a reasonable expectations.
Ged: Okay, so if you don’t have [00:17:00] scorecards in your organization, now is the time to put them in place.
