When Joey from Friends met the Balanced Scorecard

How you doin?

So, how you doin’?

You get this most days, don’t you? People ask “How’s business?”, or maybe “Are you busy?”

We normally give them the answer they want to hear: “Oh grand”, or “Tipping away” or even “Up the walls at the moment”.

All nice, socially acceptable answers. But often, total bullshit.

You don’t want to suddenly unleash on innocent well-wishers that you’re struggling with how to grow your business, or don’t know what to do next with a staffing issue or are worried about where the next wave of income is coming from.

So we keep going along, like the swan on the lake. The picture of elegance on the surface, while beneath we paddle furiously.

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Really though, how are you doing?

If we sat down right now, would you be ready to go beneath the veneer of socially acceptable platitudes and have a real conversation about your business?

There’s a question we frequently ask at our SmarterPreneur sessions: how are you feeling about it all today? Of course, you can lie if you want, but most don’t. We tend to be quite good at recognising when we’re feeling well, and when we’re not. It’s actually a skill that we develop with practice.

And how is the business really doing? Is that a feeling thing too? Or do you have a clear picture of what that looks like?

This might surprise you but most business owners I interact with don’t have that clear picture. They have a version of reality, often clouded by emotion, and enhanced by optimism. Some are guided by cash in the bank, others keep an eye on a sales metric, while more still wait for their meetings with their accountants.

What does your picture look like?

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The idea of a ‘balanced scorecard’ has been popular in larger businesses for twenty years or so. The simple idea is that there are important aspects of the business to be measured beyond the normal profit and loss stuff. This can include measures of client satisfaction, how well the internal processes of the business are performing and how employees are developing.

When applied with wisdom, it’s a very useful approach. It can lead to some powerful conversations where awareness is raised about how much progress is really being made.

We need this too. We need to raise our own awareness about where the business is going. All of the tips and tricks in the world don’t matter a damn if we don’t pause and take a good, honest look at where we are.

Here’s a simple scorecard for business owners. It has just four elements and it’s all visible on one page. We designed it for a workshop and it was very effective in raising awareness on the trajectory of the businesses in the room. For some, it was a useful validation. For others, it was a wake-up call to learn more about the business model behind their work.

Now, it’s your turn.

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Here’s how it works:

The scorecard combines what’s important for the business and what’s important for us. Some answers will be immediately obvious, others might require further investigation.

What’s really interesting is what happens when the scorecard is completed. You may well be surprised when you see it staring back at you.

Here’s what not to do: fold it up and stuff it into your top pocket and get back to what you were doing. Instead, make this the reason to have meaningful conversations with people who can both challenge and support you as you build your business.

Next time someone asks you how you’re doing, you’ll know.

image credit Network Ten

 

This post has been amended from a previous edition of a fortnightly email written specially for ambitious business owners. You can join the growing list who receive this mail here. 

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