10MINMC.Ep.16.AUDIO
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Trey Sheneman: [00:00:00] If your team doesn't know what winning looks like, then they're gonna aim for busy. Having a great scorecard fixes that.
Welcome to 10 Minute Masterclass, your weekly Mic Drop for Business Breakthrough. I'm your host and lead MC Trey Sheneman, and it's our goal each and every week on 10 Minute Masterclass to teach you timeless business principles that will translate to help you solve today's business problems. Now, the typical way we do that is through a a framework we call the Core four drivers of growth.
'cause whether it was taking my own startups to market like I'm doing right now with Herald, or running growth inside of some well-known brands. Growth always got stuck [00:01:00] or stalled when we hit bottlenecks in one of those core four drivers of growth, marketing, sales, operations, and leadership. Now before we jump into today's episode, if you've been listening for any length of time now, especially the last couple of weeks, you know that we got a sponsor, we gotta sponsor y'all LiveWell Vacation Club, more information to the show notes.
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We love it. Um, we. We are already planning next year's, once we've [00:02:00] renewed next year's, two weeks of of time that we get in our membership to go to some places we've never been before. So go check it out. Alright, let's get back to the content In today's episode. Today's episode we're gonna talk about operations, and specifically we're gonna talk about
having a great scorecard. Most businesses set goals. They'll do offsites and planning sessions and strategy meetings, and they'll set goals. Matter of fact, many businesses will use OKRs. If you go back and look through the lexicon of episodes here, wherever you're streaming this podcast or watching the video, um, you'll see I did an entire ed, uh, episode dedicated to building and structuring good OKRs teams.
They're, they're, they, they're willing to make and set goals, but a lot of businesses are terrible at tracking them. Today, I wanna make sure that that's not you, that you actually have a plan. Because at the end of the day, vision is exciting. My team gets on me all the time. I, I am the prototype of the vision first kind of lead leader.
I could be a squirrel at times and just chase things, and they have to ground me and bring me back down [00:03:00] vision. It's exciting, right? It's energizing, but execution is what pays the bills. And we wanna make sure that our scorecards are helping us. Execute. 'cause the moment your team stops guessing and starts measuring is the moment you're gonna go from hoping to grow to watching it happen weekly.
I promise you. So the big idea for today's episode is when people see the score, they play the game differently. But more important than that, when there's somebody who owns the score, they're responsible for it, then they're gonna play to win. And so today I want to talk to you about the core elements of an operational scorecard.
They get your team to play to win. The first component of a good scorecard is what's called lagging metrics. Okay these are things that have already happened. These are things like past revenue, past profit, churn, customer count, close deals. An example of a lagging metric would be we did $150,000 in revenue last month.
[00:04:00] Lagging. These are important because they're the rear view metrics that lets you know where you've come from, lets you know how you're trending, lets you know what is real. The business, not what is hoped for in the business. So you've gotta have a good handle on lagging metrics. Now the opposite of lagging metrics are leading metrics.
These are windshield, so lagging metrics, rear view leading metrics, wind, windshield. They tell you what's about to happen. They are pipeline. Pipeline is a great leading metric of the potential gains of the business going forward. They tell you about the number of book demos that you have coming up. They tell you about, um, you know, events that are on the calendar where you know you're gonna get a chance to, to pitch.
This is, uh, things where you're, you're, you're able to see and know how you are going to trend in the near future. Future. Uh, a pro tip here is really, really great operators reverse engineer what the leading indicators have to be [00:05:00] to be able to know what the lagging results are going to need to be. 'cause those two things are connected to each other.
So you've gotta have a good handle on your lagging metrics, what has happened and your leading metrics, what's about to happen or what you want to be, the thing that's about to happen. Once you have those good mixes of leading me, leading measures. Lagging measures. Excuse me. Um, then the next thing I want you to do is ownership.
I said earlier, if you give results an owner, then people are gonna play to win every one of those metrics in leading and lagging has gotta have this many names beside it, one name. Okay. An owner, no shared responsibility, no exceptions. Shared responsibility in something like a scorecard is gonna feel like no responsibility.
There will be a lot of buck passing going on if there's not a single name there. So when you have this scorecard and you have the owner and you do your weekly review, whether it's an L 10, we call ours our cornerstone, like whatever you do for your weekly meeting, then you can go, Hey, so and so. Hey Alex, your metric [00:06:00] is red this week.
What's the plan to make it go back to green? You can have very poignant conversations with the people on your team about what's going on. So speaking of colors, once you have your leading metrics, your lagging metrics, you have your ownership, then you're gonna use traffic lights. Okay? You're gonna have very three quick little color codes beside the metric of either it's green, which means it's on track, what's it on track to?
It's on track towards the OKRs that you've set for that quarter. Yellow, it's. Needs attention. It's getting off track. It's not all the way off track yet, but it's trending off track or red. It needs action because it is already off track. Now, hopefully if you're doing this well, things are getting into yellow before they're getting into red, and you're able to stave them off from going red.
But having this simple traffic light pattern up and down your scorecard makes it very easy for you as the founder of the business or the person who's responsible for the scorecard, to get a quick snapshot of the general health of the business. Because these leading and landing metrics should be about the general health of the [00:07:00] business in real time.
So if you can see eight outta 10 or green, one is red, one is yellow, that's a pretty good spot to be as a business owner. So the traffic. Light patterns. They give you instant clarity on exactly how the business is doing when done well. And then I kind of mentioned this a minute ago, the fifth part of this, outside of you get the metrics, the two kinds of metrics, the owner, the traffic light pattern is you have got to have at least biweekly, I really think weekly check-in meetings with your team about these 5, 6, 8, 10 kind of KPIs on the scorecard where you're simply saying.
What's on track? What's off track and what's the plan to fix it? It does not have to be a complicated meeting, should actually be really honest and gritty and straightforward, but that operational meeting is a huge part of driving it towards the finish line that you want. Now, when you're building these scorecards out, I wanna make sure they also give you some.
Mistakes to avoid. These are, these are mistakes I've made myself. The first of which is to have too many metrics. I kind of indicated this, I think five to 10 [00:08:00] KPIs on a scorecard is a really good number. Call it four or five in lagging four or five in leading. I think that's about enough to be able to manage it.
'cause I'm also imagining most leadership teams and kind of managers inside of an organization, unless you're a big organization, you're not gonna have more than five to 10 managers. You know, as you, as you're building, especially with the early stage, so KPIs and number of owners, uh, tends to be a good balancing act.
The second mistake to avoid is to make sure that you don't have a situation where there's no context for a number. Uh, you don't, don't say something like, well, you know, the metric is the way we say the metric this week is sales are down. Well, well, what does that mean? Down from what? Down to goal? Down from the week before, down from the month before.
So, uh, if sales are down, what are they down to? And more importantly, why are they down? Did leads go down? I. Did we do less demos? Did our conversion rate go down? Like so hold yourself and your team accountable for contextualized numbers. Okay? And the third [00:09:00] one is, is when people come in with an action plan.
Now, I don't get lit too much in the job force. I really have worked on that. God has shown me some grace, and I really don't get bothered by a ton. But man, when people come in and give me a problem and don't have a plan, I am, that's, that's how I get, get sideways if you know what I'm saying. Something we say down here in the south.
Um, so. Make sure that you're holding your team accountable, that they have action plans. So build a great scorecard, four or 5, 7, 8 metrics ownership. Use your traffic pattern, look at it biweekly or weekly, and make sure that your team is ready. 'cause at the end of the day, if you wanna grow faster, you have to make your team's progress visible.
If you can't see it, you can't scale it. I say it again. If you can't see it, you can't scale it. So if you can keep the score and you make them on it with you, they're gonna play to win. So this is your challenge this week. Here's your homework. Go build your simple scorecard. Follow this as a rubric, build it out, and watch what happens when they start [00:10:00] with you.
They choose to with you. Start playing the game like a pro would. You gotta keep score to play it like a pro. Hope you got something outta this lesson. Don't just be one who hears, be one who takes action. As always, thanks for tuning in to 10 Minute Masterclass and until next time, we'll catch you on the flip side.
