When an “IBM-er” joined Dell Computers, he was told at his first performance review that “Margin decreases revenue velocity.” There are trade-offs between driving gross margin vs. top-line growth. Both companies are successful, yet they measure and pursue different metrics. You need to know what YOUR company is measured on.
A corporate scorecard (or dashboard) measures important dimensions of people, teams and organizations. As the previous Dell CFO said, “Structure and incentive drive behavior.” If your product/service is not in the sales plan, or has lower commission tied to it – then the scorecard will not highlight people ignoring it…and it will not get done. Each of these employees has just determined that, “the juice is not worth the squeeze.”
If you measure correctly, you get data on your department’s successful performance…or your failure to perform. Of course, it is then what you do with that data. As Andrew Lang (1844-1912) said, “He uses statistics as a drunken man uses lamp posts…For support rather than illumination.”
Does your company implement scorecards?
