Before I started using EOS in my business, I had very little clarity on how my business was performing. At the end of the month, I’d tally up some numbers and figure out whether I turned a profit or not – but outside of that exercise I had little else to rely on. Maybe my checking account balance.
If my business was an airplane, I was flying it into a storm with only an airspeed gauge. While useful, not really enough to get me through what was about to happen.
One of the six key components of EOS is “Data” which is applied via a Scorecard and Measurables.
Before implementing a scorecard – I had plenty of access to data through programs like Google Analytics and our recurring billing platform – Recurly. But jumping into your website analytics or billing system here and there provides little context to what is actually happening on the front lines of your business.
Implementing a scorecard with just 5-10 numbers on it that you check each and every week has changed me as an entrepreneur.
It’s been a long road.
Sometimes I will track a number for weeks – or months – that ends up having little to no correlation with success in the business.
Sometimes I will track a number and hate what I’m seeing for weeks. The numbers will be plateaued… or going down… and no matter what you try you can’t get them to change.
But then they’ll be a breakthrough. All of a sudden I’ll see something deeper in the data. Or have a realization about a connection between one of our numbers and another. Each week pushing deeper into the mechanics of the business.
With a scorecard, I ultimately want to see the health of my business on a single, one-page spreadsheet. It should tell me if there is an emergency. If our marketing campaigns are effective. If our customers are loving our products. If they are getting the results we promise through our value proposition. If there are leaks in our administration or finance.
I should be able to look at my scorecard and not just see how things performed (lagging indicators), but also where things are headed (leading indicators).
Examples of lagging indicators:
- Cash balance
Examples of leading indicators:
- Website traffic
- Ad spend
- Sales calls
There are countless metrics that you can track in your business. And these days, plenty of cool data platforms to visualize this stuff. But too much data can be a big disservice. It’s hard to influence a dozen or more numbers simultaneously. On our team, we make sure each number on our scorecard is owned by someone. And ideally, each person only has a few numbers to keep their eye on.
Less, but better.
While there are certainly a lot of numbers that might be interesting to know or keep your eye on from time to time, your scorecard should be the essential few that if improved – could dramatically change your business for the better.
Every business should have 3-4 of these numbers and then maybe another 2-3 numbers that illustrate the overall health of the business.
But your business is your business. And your scorecard will be unique. Over the last three years I tracked a lot of numbers on our scorecards that I no longer do. I think everyone has to go through this evolutionary process in their own way. Sure, you can get some guidance, but it’s such a personal thing.
Here are some quick lessons learned around scorecards from the trenches:
- Stay disciplined. Update your data every week and hold yourself accountable to your goals.
- If you miss a goal, add an issue to your issues list to either take a clarity break on (if you are solo), or IDS (if you have a team)
- Use a single spreadsheet and only show the most recent 13 weeks for clarity. Use the “hide columns” feature to remove old data – but keep it around in case you want to use graphs to better understand your data.
- Use graphs to better understand your data. I’m a visual guy and several of my “data breakthroughs” have come when looking at data visualized over time… and in some cases layering different numbers over the same timeline.
- Leverage a VA (virtual assistant) to compile data once you are certain about your numbers. This will save time prepping for your weekly team meetings.
Scorecards helped me so much in my business, I also added them to my personal life by shifting to a single number budget. This allowed my family to forget about monthly spending categories, automate all of our finances, and keep focused on controlling our discretionary spending to a single number each week. We’ve successfully operated on this budget for over two years now! That’s crazy talk for most people when it comes to sticking to a regular family budget.
Are you using a scorecard in your business? If so, what numbers do you track each week? If not – how come? What’s holding you back?