Scoreboard – Financial Results

Many of us love sports or other types of competition. We identify as fans and enjoy tracking our favorite players and teams, gauging the results, celebrating wins, and suffering through losses. 

For winning, our goals can vary.  They might be to:

·       score the most points (football, basketball, baseball, bowling, archery)

·       shoot the lowest score (golf)

·       finish with the fastest time (track, auto racing)

But, in every case, the participants can see where they are compared to the competition (scoreboard, scorecard, leader board, three seconds behind, and so on).

In business, the scoreboard is ultimately our financial results. Yes, we have other tasks to do and non-financial goals for our businesses, including things such as:

• ethical practices
• community impact
• customer service
• customer sentiment
• employee satisfaction

However, these are truly important only if we can stay in business–financial results matter!

Financial results

Just as in sports, the score on the scoreboard mirrors the cumulative impact of effort. Your top-line sales, margins, and bottom-line profits reflect the actions of your team. Your competition is the results of the previous day, week, month, or year. Are you getting better? Are you incrementally improving? Can you see the impact of those improvements in your results?

While the final score is how we judge our performance, we can’t simply declare, “I want more top-line sales,” and it magically happens. We must work on one or more of the following fundamental factors that drive sales:

·       customer count

·       transaction count

·       average sale price

At least one of these needs to increase (while the other two stay constant or also increase) to drive the desired results.

Key Performance Indicators (KPIs)

Sports are such a great analogy! Our teams, just like the players on a football field, need to know the elements (measured by KPIs) that influence the outcome and increase our chances to put more points on the scoreboard, such as the following:

·       Knowing the rules (what’s acceptable, what’s not)

·       Knowing the plays

·       Listening to the leader (quarterback)

·       Executing their specific role

·       Being trusted by teammates to execute

·       Coordinating and collaborating with others on the team

KPIs in business are analogous to the detailed stats in sports. They show progress, indicators that you are progressing toward the goals of financial results. For example, consider the following sports KPIs and possible corresponding business KPIs:

·       First downs.       -->    New Clients acquired

·       Rushing yards   -->    Transaction Count

·       Passing yards   -->     Average Sale Price

·       Penalty yards    -->    Customer complaints

·       Turnovers         -->     Lost Clients

The list could go on, but I think you get the picture. 

We all want to be on or at least associated with a winning team. Our team members need to know what they can do to improve those chances individually, and we need to provide the training, encouragement, and practice opportunities to ensure their success. Our results depend on it!

"Only Action gets you closer to your dreams - do something today that your future self will thank you for."

- COACH