Fourth Step to Implement EOS: Scorecard

Continuing with the series on implementing the Entrepreneurial Operating System (EOS), today I share the 4th of 7 steps. The 4th step is called, “Scorecards.” We have begun to introduce scorecards into our business.

Traction begins the section on Scorecards with the following quote:

The concept of managing through a Scorecard has been around for a long time. The idea has been expressed through many different terms. It’s been called a dashboard, flash report, scoreboard metrics, measurables, key performance indicators, smart numbers, and so on. Whatever you call it, it’s a handful of numbers that can tell you at a glance how your business is doing.

Many organizations just depend upon P&L to measure their health, but P&L is not very useful in discovering ways to make specific improvements. P&L is a trailing indication of the performance of the organization.

Scorecards on the other hand let you change the future.

Here’s a good way to understand scorecards. Imagine you are suddenly cut off from all knowledge of your business except for 5-15 numbers. Imagine that you had to run your company with just the knowledge of those 5-15 numbers. What would you want those numbers to be?

Those important numbers become your company’s scorecard numbers. They should be weekly numbers. The scorecard helps detect trends.

I’ve written previously about our company dashboard. As part of implementing Step 4 of EOS, we are now revitalizing those dashboards and rethinking the numbers we track for our business.

What metrics do you track on a weekly basis in your startup? Do you have a startup dashboard?

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