Debra Chantry-Taylor: Smoking Hopium – Data Scorecards and Why Everyone Needs a Number

Debra Chantry-Taylor  00:00

If your numbers tell you everything's perfect while customers are leaving and cash is squeaking, then it's not really a scorecard. It's a bedtime story, feelings, lie, numbers clarify. If your team fear red, you'll get fiction. They'll start making things up. So build a culture where truth beats theatre. So I'm talking to you, Mr. Or Mrs. Visionary, put the opium down. It might make us feel good, but I promise you you'll breathe better on cold, clean data.

Debra Chantry-Taylor  00:36

Hello and welcome to another episode of Better Business, Better Life. I'm your host, Debra Chantry-Taylor, and I'm passionate about helping entrepreneurs live their best life by creating a better business. Now I have been deep diving into the data book. It's the latest EOS book. They're doing books on each of the six key components. We've already had a look at process. We've looked at people this time. It's around data, and I'm reading it for the second or probably even the third time now, and really enjoying what I'm reading. So this podcast has been inspired by the data book, and it is entitled smoking hopium. Data scorecards and why everyone needs a number. And the reason that I've given it this title is because the book, somewhere in the middle of book, I came across this beautiful phrase, and it talks about smoking hopium. And if you think about hopium, it really is that potent blend of hope and optimism that makes leaders feel really fabulous while the business beneath them quietly catches fire. And the two flavours of hopium and both are equally dangerous. So the first flavour is the all green illusion. You know, the leadership team walks in, they've got a score card. It's a lush meadow of green. Everything is green. It's high fives all around. We're flying. It's brilliant. We're doing amazing, except when we peek under the hood and we discover they're measuring the wrong things. So for example, they're measuring likes instead of qualified leads. They're measuring project sent instead of milestones hit. They've got team happiness via vibes rather than retention or time to fill. So they're classic, what we call watermelon metrics, green on the outside, red on the inside. So that's the first smoking hopium illusion, the all green illusion. And if your numbers tell you everything's perfect while customers are leaving and cash is squeaking, then it's not really a scorecard. It's a bedtime story. It might make you feel good, but it's not going to help. The second flavour is the always red fantasy. And so this is where the vision resets the targets based on the dream, not the data. So they want to go from sales from a 50 to 150 and in a quarter, it's impossible. Every line is red every week. And then after a certain amount of time, usually five or six weeks, the team stops even looking, because it's not a scorecard, it's a wall of shame. It's a finger pointing. It's for them. It's like they can't see how they're ever going to get into the green. And so my plea to you, visionary, to visionary, is, I love you. We are the spark. We are the things that keep things going. But if everything is red, then that's not really ambition. That's theatre. And what I mean by that is you're kidding yourself. You're not actually being realistic about what is achievable, and you're not motivating your team. You're going to end up with a very quickly burnt out team who completely ignores the numbers, or worse than that, if you're setting the bar too high, you're going to find people coming in and giving you fake numbers. They're going to try and not have the finger pointed out, and they'll try and change things. So you need to fix it. And the best way to fix either of these, either the always red or the all green, is to get truthful measures. And then when you've got truthful measures in place, you can then, if you're working with all the reds, you can ratchet up. You can start with the greens. You start with a lower number that is green that you can hit that the team knows you can hit, and you start to ratchet it up. So once you've got two or three consecutive greens, you push the number up, and I like to call that win, then stretch so you win, and then you stretch them, and then you win again, and then you stretch them, and that momentum will actually break the bravado. So this is a class. This is a story of one of my clients that I worked with many years ago, back in the early days of implementing Eos, they were a small food manufacturing business, and they were turning over about $3,000 per week. So that's pretty small compared to the businesses I work with now, but nevertheless, $3,000 a week turnover. Unfortunately, when I started working with them, we did the numbers, and we realised that the break even point for the business was actually $6,000 so effective, they were going back by $3,000 every single week. So we decided to put a scorecard in place. We decided to try and help the team to understand what needed to be done. And we could have gone in there and gone, hey, look, we need to get to $7,000 you know, immediately, because we're not making any money. But if we'd done that and put that number on the scorecard, the gap between 3007 1000 was huge, and the team would have gone there's no way in the world we're dreaming. We're smoking, you know, smoking opium. We're never going to get there. So what we decided to do was just set it at three and a half. We were achieving three on a regular basis. We set it for three and a half. Within a week, we'd actually hit three and a half. It was that easy. Once we got three and a half, we let it sit there for a couple of weeks, and we push up to four. Then we. We hit four for a couple of weeks to push up to four and a half by the end of the 13 weeks, which is a 90 day period, we actually had achieved $12,000 per week revenue. So now they were finally doing more than just breaking even. They were actually making a profit every single week. And they could not have done that if the visionary had insisted that we aim for 12,000 in the beginning, or even 6000 in the beginning. So we use the scorecard, especially when it's always red. We use the scorecard to bring the numbers to an achievable level. As they start to achieve it, we win, we celebrate the wins, and then we stretch the team, and then we win again, and then we stretch the team, and you really will start to see momentum. But of course, the first one I talked about the sea of all greens. Maybe it's the numbers too low, or maybe it is measuring the wrong thing. So if your scorecard is a field of green, where is the rot, you know? Where is the stuff that isn't accurate? Where is it that we're not measuring the right things? If the scorecard is telling us everything's fantastic, and yet, we're still losing clients, so we've got huge turnover of staff, then your scorecard is an absolute fantasy, really. So find out where that rot is, and if it's a wall of red, then have a look and go. Is this scorecard really meaningful? So today we're going to start to talk about replacing that hopium with clarity. We're going to get really practical. We'll upset a few Apple carts, and we'll leave you with a scorecard that actually predicts the future and keeps the wheels turning in the business. Let's talk about why everyone needs a number.

Debra Chantry-Taylor  06:28

Bottom line is, if you're paid to be here, you need a number. Full stop. End of message. That is it. Anybody who works for you is being paid to be here, they need to have a number, and why is that so? First of all, it gives clarity. What does winning look like for me this week, and this is where it's really important that we're talking about scorecards. It isn't about finger pointing, it isn't about blame. It's actually about celebrating success success. And it's like having a game without any rules. We want to go this is a game of business, and in business, we have rules and we want to win. We always want to win at games. So what does winning look like is what the scorecard actually gives the team. It tells them what they need to do to play the game. Well, it tells them what they need to do to win. The other thing is about behaviour. People manage what they measure. I've got some great examples later on about how measuring the right things means that people will actually start to manage it, to make things better. And the third thing is around truth. So numbers don't care about politics or pecking order or keeping the boss happy. They're going to tell you exactly what's going on. So here's a story of one of my clients, who was a manufacturing client. The ops leader said that her role was too complex to measure. Everybody tells you it's either too complex, and whether there's nothing I can measure, I'm a creative therefore we don't have anything we can measure on we sat down and we talked about what we could actually measure. We used her accountability chart, what is she actually being held accountable for in that ops role, and then we could look at what we could actually measure her for. So we landed on percentage, on time and in full and first pass yield. Now, in 90 days, the efficiency in that team went up, the rework came down, and the margin was recovered. She didn't get better because we tracked her. She became better because tracking focused the effort for her and for her team. So some examples by seat the visionary one to two numbers, so they might have things like the top five strategic relationships advanced weekly, a new opportunity pipeline. Value of those big relationships, the integrator might have things like on time rocks issues, close per week, leadership scorecard, percentage green. And don't forget that in a scorecard, it doesn't have to be numbers per se. It could be yes or no. So on time rocks is a yes or no. Did we hold our level 10 meeting? Yes or no? They can be things you can actually just report on that gives you an indicator when things aren't going right. In sales, we're looking at things like book to discovery calls, number of face to face meetings, proposals sent, and close rates. They're all the leading indicators that lead to the final result, which is actual sales. In marketing, we should be looking at things like qualified leads, not clicks, not likes, not engagement, but qualified leads lead to meeting conversion and cost per lead, and we should be looking across all the different channels to ensure that we're actually getting the results that we want, not using things that make us feel good. We can all look at our social media and go, Oh, yeah, I got 70 likes. How much engagement? If that doesn't lead to some kind of business or some kind of lead generation, then that's not a real number to be measuring in people. In HR, people still say, but you can't measure people HR. That's different. Of course, you can look at things like time to fill vacancies, 90 day 90 day retention, regretted turnover. And when I say regretted turnover, I mean the stuff that you the staff you don't want to lose.

Debra Chantry-Taylor  09:39

So there's always gonna be certain turnover we can not, we can't avoid. But the regretted turnovers, the good people that we don't want to lose, that are actually going that is a real red flag. If you've got significant regretted turnover, then that is something we need to be looking at in finance. It's things like, you know, cash runway, weeks, how many, how much cash we got in the bank? What runway does that give us? What's our debtor days? What's our forecast? Accuracy in OPS delivery, it's on time in full delivery, it's cycle time. It's defects per X. The idea is that all of these things, they come from the accountability chart. What are we holding this person to sit accountable for? And then these measurables, other things that come from that that create that accountability chart. I said earlier that, you know, I've worked with a lot of creatives, and people go, Oh, but you know, my role is creative. You can't put a number on creativity, and you're absolutely right. You cannot put a number on creativity, but you can put a number on outcomes, things like, what is your brief acceptance rate with your clients? How many revision rounds did you have to go to? How many on time sign offs were there? How many contacts have you had with your customers to keep them top of mind. So measure the value delivered, not the vibes produced. One of the things I will say, if you think a seat can't be measured, then one of two things is likely to be true, either the seat is unclear or the seat isn't adding value. And in either of those two situations, something needs to be done. So if your seat is unclear, you need to get really deep into that accountability chart and be really clear about the value they deliver to the organisation and to the clients. And if they're not adding value, you have to ask the tough questions, should that seat still be there? What about data turning into drama? And here's the thing, data will always overcome drama, if you think about it, feelings lie, numbers clarify. So I had a professional services firm who felt that their clients were happy. The scorecard said that the net promoter score was drifting from 68 to 49 their churn was up two points per month. And nobody was doing this with maliciously or with intent. They were all just really busy. So we added two new measurables, proactive client callbacks within 48 hours and quarterly value reviews completed. That churn stabilised in six weeks and it recovered in 12 so this is a case of where we're taking away the feelings because they can lie, and using number to really deep dive into what is going on. And I know that you know, as an aside for us visionaries. You know, our gut feel, our intuition, it is a superpower, and we should be using it, but only when it's calibrated by data, because without data, your gut feel becomes biassed with branding. And so there's a really famous quote by somebody who it is now they said, if we've got data, let's look at the data. If all we've got is opinions, let's go with mine. This was a visionary, and this is how we tend to behave. You know, we are very persuasive. We are very convincing. We can have our whole team do what we think is a great idea because we're the boss. But the reality is the data which will help that your gut feel to become your superpower. So separate the data from the drama to the facts, first, feelings afterwards, interesting. You know, a lot of people that I talk to will say, we don't need a scorecard. We've got a dashboard. We've got a profit and loss that gives us everything. But let's have a look at these three things, scorecard, dashboard, profit and loss, and let's have a look at them in plain English.

Debra Chantry-Taylor  12:54

So Profit and Loss is history. It's useful, but it's late. It's been, it's done. You cannot do anything about it. Your dashboard is your operational readouts. It's kind of the stuff that is happening in the kind of day to day. But your scorecard really is your weekly predictive measurables that will tell you if you'll win the quarter or not. Remember, in Eos, we work in 90 day quarters. We're always looking at all of our things every 90 days, and we are then adjusting them for the next 90 days ahead. And we should, as leaders, become really good at predicting both short term and long term. So our scorecard we should be looking at every 90 days and saying, Are these still the right numbers that we need to be looking at to predict whether or not we're going to hit and win the next quarter? So the rules that work in scorecards is having, you know, five to 15 measurables at a leadership level, fewer is cleaner. I've worked with companies that have had 20, 3040, I've seen 72 measurables. That is not a scorecard. That is just one of those dot matrix reports used to get when I worked in insurance. They deliver pages and pages of all this stuff, and you didn't even look at it. So we really want to think of it as the finger on the pulse. What are the key measurables from each of the key departments that will let us know, like the indicator light in a car, that something is wrong with the engine. And that's really what a scorecard is. It's designed to be an indicator that says you should have a look under the hood because something is not quite right. So those five to 15 measurables, one or two from each department, a mixture of leading and lagging indicators, fewer is definitely cleaner. And then you need to make sure that you've got one owner per line. So it needs an actual human name, not a team, not the marketing team. They're not a person. A person has to own that particular number and be responsible for it. I know, when I was running my Event Centre business and we went into covid and lockdowns and things, you know, I had to look at my scorecard and put my numbers in every week. And if I hadn't been doing that, it would have been really easy to glow. To gloss over it all and go, Oh, it's all okay. Everything will be fine. You know, I've got lots of hope that it will all return. I feel really optimistic about where things are headed. But when you're looking at a scorecard number every single week, and you're entering into a scorecard, you have to face reality. You have to look at it and go, damn it, we have. Hit that number, and that's my responsibility. It makes you start to think about, you know, what that is, what is going on in the business, and what do we need to do? And the reality was, in that event space business, there was no way it could continue as it was. And that was the wake up call. Was seeing those reds every week. And then there's the next thing. The next rule is, it has to be weekly. You've got to have a weekly cadence of weekly meetings and weekly measurables. And look, let's be honest, there are certain numbers you cannot measure every single week, but they should be few and far between. Because if you think about the lagging indicators, the things like the revenue, the number of sales we've actually made, they can be measured on a monthly basis, but it's too late by then. We want the weekly cadence, the weekly reporting that is actually the leading things that lead to that end result. So in a sales example, it will be things like, how many people came into our pipeline, what were the leads that were actually generated? Then how many discovery calls did we actually have? How many proposals did we have? Or face to face meetings did we have? How proposals did we send out to that and then how many became clients? And so by having a couple of those measurables, you wouldn't use all of those, but you might go number of people, of leads being a marketing measurable, you would have the number of face to face meetings that you've made, and then maybe the number of proposals that have gone out. And then finally, that the last measurable would be at the actual sales made. And this, being measured on a weekly basis, gives you that indicator light in the car that says, hey, take a look at this if we're going off track, to see if we can actually rectify it before it becomes a major, a major issue. So one of my agencies, they turned up with 34 items.

Debra Chantry-Taylor  16:30

You know, it's difficult. I with lots of marketing teams as well. And when you've got that many measurables, you're going to find that with the team, by the time you get to number 12, the eyes have completely glazed over. They're no longer looking at it. And of course, if you've got 34 measurables, if a whole bunch of them are red, I've seen it happen in level 10 meetings where they just get ignored. People go, oh yeah, red again. Oh yeah, red again. They don't drop it down. And the whole point of the scorecard is, when something is red, it should be a major indicator that something is going on in our engine, and we should actually be stopping and deep diving in our IDs session to work out what's going on. So we cut that number back to 10 that actually predicted performance, qualified leads, Discovery calls, proposals, win rate, average deal size, utilisation of staff, gross margin per pod, net promoter, score, rework, tickets, debtor days and the meetings halved in time, but they also doubled in value, because now we're looking at the real indicators, and they were actually getting clear on what the issues were, dropping them down into IDs. And actually IDs ing things that were affecting the way the business is run, because the scorecard is meant to be an indicator of how we are going in terms of reaching our 90 day goals, and so we need to be actually discussing things that are stopping us from getting there. If you've got scorecard measurables that are completely unrelated to what we're trying to achieve in the next 90 days, then you're dropping down issues that have got no relevance. There's a you know, I think one of the jokes I make is, if your scorecard looks like a Christmas tree, you've confused comprehensive with useful. And what I just mean by that is simplify it down. Get it simplified down. It should be finger on the pulse, the most important numbers. So I've talked a little bit about predictive versus lagging. So the way that I like to describe this is drive by the windscreen and by the dashboard, not by the rear view mirror. So looking in your rear view mirror will tell you what has actually gone on and what you've come past. Looking at the wind screen ahead tells you where you are going, understanding what you need to navigate, and your dashboard tells you how you're actually dealing with that in real simple terms, lagging tells you what happened, revenue, profit, churn, predictive or leading indicators tells you what's coming, number of meetings, books, proposals. Sent cycle time, first response within X number of minutes. So one of my construction businesses, they used to watch things like completed jobs and cash in. Not bad, lagging indicators, but we move them into more leading indicators, quotes, sent deposits, taken lead time variance. That way they could spot a tender drought. In week three, they pivoted their resource, they filled the pipeline. The result was they had no gap. Eight weeks later. And this happens a lot is, though, if we leave it to just doing monthly reporting, we get to the end of the month, we haven't hit the leading stuff that we had to, and suddenly there's a gap. So I think the best way to kind of view this is the car light coming on. Doesn't mean panic. It means check now, if the car light turns orange, it means check now, find out what's going on. So treat every light, every red on your scorecard, as an invitation to IDs. It identify, discuss and solve what the real issue is, and treat it as a positive. You know, I think this is one of the things. I'm probably going to cover this up more later on as well. But people think that scorecards are about keeping track of things. We can point the finger so we can apportion blame, so we hold people accountable. Yes, we want to hold people accountable, but we want to hold them accountable in a positive way. The scorecard should be about rewarding great results. There should be high fives all around when we're hitting genuine greens, but there should also be a real sense of. We have an issue here with a red number. What can we actually do to identify, discuss and solve that? So I talked about watermelon metrics in the beginning. You know, green on the outside, red on the inside. This is about making sure that we get rid of those vanity and watermelon type metrics. How do we do that? So we need to kill those vanity metrics and move to things that really move the needle in the business.

Debra Chantry-Taylor  20:22

And then there's the watermelon metrics, the green on the outside, red on the inside. So you're measuring things like the attendance is logged, vent, but we're not looking at the people who actually show up. So that means it looks great. We've got 100 people registered to attend, but we actually only got two ups. That's the green metric, when really it's a red in it, and MSP type services, tickets closed, but there's been no first time resolution. So that is a, you know, it looks great. We've got greens. All the tickets are closed, but we actually haven't done anything with them. And we're closing them with, you know, and then having to reopen them the same tickets two or three times. I saw the tech film, actually, they celebrated tickets closed. Yeah, we got our tickets closed, but customers were reopening the same tickets two or three times. So we swapped it to a much more accurate measurable, which is first time resolution and time to first response. And then all of a sudden, the customer said, CSAT climbed, and the tickets actually fell, because we're looking to resolve it, not just celebrating closing a ticket. One of my things here on a scorecard. You know, if you think about if a 12 year old can't explain the metric back to you, it's probably fluff. It needs to be really, really in depth that you'll see the wording I'm using here, first time resolution, time to first response. It's not re it's not things like tickets closed or attendance is locked. I talked at the beginning about the two hopium traps, and here is how to fix them. So trapez was the all green because you measuring the wrong things. This is where you need to look at replacing vanity with value. So leads to qualified, leads to meetings, proposals to wins, you just swap your lagging for your predictive. Wherever possible, you'll have to have a couple of lagging indicators in there, but we really want to have the predictive or the leading indicator tell us where things are potentially going wrong, and then add in some Canary measures. So response time, time to value percentage proactive check ins, things that are going to keep the wheels turning and keep customers satisfied that aren't necessarily end results. Trap B was the always read, because targets are live in space, and this is where the visionary has kind of gone. Hey, you know, if we shoot for the stars or a trip for the moon, at least, we'll end up in the trees. But of course, this is going to cause issues for the team, because they're going to think this stuff is impossible. They're going to think it's unrealistic. They'll very easily get demotivated, they'll get burnt out, or worse, they'll start to lie about what's on the store card. So when you've got this always read, because the targets are so high up in space, then the best way you can actually deal with this is start where you're at, you know, start where you're at. Get some wins on the board, then win, then stretch, win, then stretch. You can have in your mind as a visionary what the end result needs to be, but think about how you can gently motivate and encourage the team to actually get up there and only ratchet it after two or three consecutive greens. There's no point in changing it after every green. Otherwise you're changing the number all the time. There's no consistency, and nobody really knows what they're actually aiming for.

Debra Chantry-Taylor  23:06

So I always say two or three greens means we're getting that that target nailed. Let's push it up and push it up by a reasonable amount. Don't suddenly push it up to twice the number in something that is able to be done. The example I gave at the beginning, you know, going from 3000 to three and a half 1000 was a stretch, but it wasn't that much, and just putting it up by $500 kind of every couple of weeks meant they got to that end goal within the 90 day period, within the 13 weeks. And then use some guardrails. So, you know, agree, a floor like a minimum acceptable value and a stretch is ambitious but sane, so it's not boom or bust. And a lot of the software you can use to track these scorecards will give you the ability of a range. So have a range in there so that you know that you're not kind of pushing people too hard, but you're also not allowing them to do less than the minimum acceptable. So ambition is, without a doubt, gorgeous. It's what US visionaries do. We're very full of hope and optimism, and we really want to be ambitious, but when you weaponize ambition, it just leads to carnage. And it's important that people feel valued, that they feel that they're adding value, that they're actually able to contribute, and that they can get the wins. And I think it's really important I said earlier on, do celebrate those wins. When you get a green on the scorecard, it's a genuine green, we should be congratulating people. And if we've got a red we should be dropping it down and you get the IDs in it, in the in the issue solving section of the level 10 meeting, okay, everyone must have a number. This gives you a chance to cascade EOS without chaos. So the leadership scorecard cascades the departmental scorecards, and then right the way under seat measurables. And you really need to have that leadership team at the top. That means that the leaders of the business are keeping a finger on the pulse of all the main departments and know what's going on. The Departmental scorecards are going to get into much more detail. So for example, in a sales departmental scorecard, you might have six sales people who've all got the same three measurables that makes 18 measurables at the departmental level. And maybe you'll have. A sum of each of those that you can then delve deeper into, and then you've got seat measurables. Each sales person has got their own measurables, and keep that alignment really tight. Each line below should feed a line above. So the departmental scorecard may not even go into minute detail, but it might have some sums of the team's efforts. And then the team have got their own individual seat measurables as well. So again, some examples of different people in different seats, what they could be looking at, so a reception or a front desk, you could be looking at things like calls answered in less than three rings.

Debra Chantry-Taylor  25:32

Missed Calls are called back within less than 30 minutes. If you're an accounts receivable, you might have get a days percentage of invoices that are error free, disputes that are resolved in less than five days. We're talking about delivery, or in field, you could have jobs completed per tech per day, first time, fixed percentage revisit rate. All these things are measuring where there are potential issues in the business. If you've got people or HR, it could be, you know, how offer acceptance percentage. If you're employing a lot of people, how many are actually taking up the offer. What's the time to productivity? So from the day they actually start in the business, the time where they're actually producing the results that we want? What's our 90 day success rate? Like one of my clients, again, professional services came up with gave the front desk a three rings and same day callbacks like I just mentioned. And those two measurables led to significant improvements in the business, their complaints halved, their referrals rose. And that small number gives a really big signal. It gives a big signal that we actually care. And the analogy that I like to use of my music background and my background is the music. One is the orchestra only sounds good when every instrument plays on time, even the triangle. So you might think that somebody's role is really small and really unimportant, but if you think about that Kestrel piece, that triangle, that little ding that we used to do when we were at school, that completes the piece. And that is me. It's the same in business, every single person in the business has a part to play, and they should have a part to play for the greater good of the business, which should be measured by a scorecard, measurable, getting towards the end now, but you know, we've got to think about things like ownership. We need ownership, not excuses. That's why we have one owner per metric. If you've got co ownership, there's no ownership. And that is like if you give a measurable to two people and they're both supposedly accountable for it, it's very easy to kind of go but I thought they were doing it, and this means there is no real ownership. And I've seen this happen so many times in my own businesses, but also the businesses that I work with. You know, sales blame marketing's bad leads. Marketing blame products not having the right product. Product blame sales promises and promising the customer too much. So, you know, we have to think about this and go right. In this scenario, we need to set some really good measurables to make sure that every department has got their own measurable. Each has got an owner. So it's things like lead quality score, show rate, win rate, each with an owner. And then within a short period of time, the blame game will actually stop, and the pipeline will start to live, because everybody owns their part of it, but they know that the sum of all the parts is what actually makes this work. And when you have real ownership, then there is no room for excuses. But we as leaders also have to support our team to actually be able to get their numbers. So we don't want to point the finger and blame and say, you know, you haven't got your number. You're in red. It's got to be about, how do we help you get back to green? So the question would be, the number is red, what's your next right action, or what help or resource do you need? Or what will be different by next Monday if your meeting's on a Monday in a week's time? So coach the person, fix the process, keep the ownership, but don't make it about blame.

Debra Chantry-Taylor  28:36

And as I said earlier on, you know, please, please use the good red and celebrate the good reds, IDs, the reds. The red on a scorecard is really great. It should be an early warning signal. We saw it then we acted. Whereas a bad red is where we've got recurring neglect. I saw this in a meeting the other day. I was observing a level 10 meeting with a client I've been working with for quite a few years now. Haven't seen them for a while, and I went to observe the level 10 meeting, and they had all reds on the scorecard, and they saw it, and they shrugged, and they ignored it. And if you just ignore it, you're not doing anything about it. And what had happened was it had just become so normal that it was read, that they weren't dropping it down, they weren't IDs in it. So I actually forced them to do it. I said, Hold on a second. That is a scorecard patrol. That's off track. Let's drop that down. Let's discuss it in the IDs. We brought it up in the IDs, we discussed it, and suddenly we had this brain wave, this genius insight into what was actually going on. And it actually gave a strategy for us to bring that red back into the green. It was an action that came out of it. IDS is always about identifying, discussing and solve which leads to an action. So an action came out of it, and they actually made some changes. And the next time I checked the scorecard, they were actually getting up to green again, which was fantastic. So another story to share. You know, I had a Software as a Service pod who flagged a demo no show rate spiking. The root cause was that the calendar link was failing on mobile phones. They fixed it in a week. The pipeline was saved, and they brought a red which means, you know, they. Brought the red to the table that leadership were able to look at that and then bring the applause for actually solving it. So here's the thing, if your team fear red, you'll get fiction. They'll start making things up. So build a culture where truth beats Theatre, where reds are celebrated and then the solves and the greens are celebrated too. The five leadership abilities I've talked about this in previous podcasts. This is a little note I made here to myself. I want to explore the five legibilities through the lens of data. So in the five legitibilities, we've got five things that we know, if we've hit the ceiling and we're not getting things done, we need to ask ourselves five simple questions. So let's look at it in a data perspective. Number one is simplify. You have five to 15 measurables in plain English, very specific, and one owner each. That's how you simplify data. Less is more less. But obsess, get that ownership. Make sure it's really clear what we're measuring, and, more importantly, make sure we're measuring the things that actually produce the results that we want. Number two is around, delegate and elevate. So if you let your numbers run the day to day, this will mean you will only do the work that you can do and that you love and that you're great at. It gives you the ability to kind of see other people are looking after it through the numbers, you can actually do the things that are important to you. The third one is prediction. So choosing those leading indicators that give you that 13 week line of sight. You know, we always work in 90 days, the 90 day world, the 13 weeks. These indicators, the leading indicators, should be telling us, are we going to win this game at the end of the quarter? There's a really great book out there that I recommend to a lot of people. It's written about a law firm. It's called fireproof. If you Google it, don't go for the one about firefighters. It is about a law firm as about a law firm that implemented EOS. They got so strong on prediction and knowing what levers they could pull to change the measurables in their business, they could literally predict their revenue, weekly, monthly, quarterly, annually, within point zero 1% because if things were going too fast, they knew which lever to pull to slow it down. If things were going too slow, then you would leave it a push to kind of to speed it up. And that is what those leading indicators are all about. They should give you the ability to recognise what's working, what's not working, and to know what we need to do to actually change that number four is around systemize. So just make sure we've got standard definitions, one data source, weekly cadence. Make sure we've got it documented. If somebody is away who owns that number, somebody else knows how to get that number, and they can then bring that number to the table. That's why it's important. We know where the number is coming from, what the definition is, what we're using it for, and we're looking on a weekly basis. And then the structure component, number five, leadership ability, is structure. And if you think about data, I've said this throughout the whole podcast, your data in your scorecard measurables are linked to your accountability chart. Here's a look at a person's accountability chart, which should actually their seat should tell you what value they bring to the business, what value they bring to the client, and that should then devise their scorecard measurables. There shouldn't be any orphan metrics. They should all belong to an accountability chart seat and every person in the organisation, whether they're working in the field, picking vegetables from the ground, whether they're sorting metal in a metal recycling yard, whether they're sitting in the office working on a spreadsheet full of numbers, every single role must have metrics that are tied to that role, and there shouldn't be any orphan metrics that don't belong to somebody. The book data talks about the fact that, as visionaries, you'll get the freedom when the numbers tell you the truth without you hovering around, putting your fingers in a meddling that's the really good stuff. So get this stuff right, and I promise you, it's going to give you freedom to get back to delegating and elevating, doing what you're really good at, because the numbers are telling you that everybody else has got things sorted, and if they haven't, they're going to bring it to the meeting. I'm going to work for the greater good to work out how we can actually solve that.

Debra Chantry-Taylor  33:46

So how do we build trust in the numbers? There's a number of things you can do that can kill trust or build trust. I had a retailer who kept fixing the sheep and the numbers looked ugly. And I say fixing it means that they kept, you know, if they didn't kind of like the numbers, they would manipulate it, change the numbers to make it look good. But it was actually hiding what was really going on. So we ring fenced those edit rights. We added a change log and published definitions, and then what that meant is people actually knew that the scorecard was a genuine mirror, not a mood board of the organisation. So how do you fix a broken scorecard? There was a seven step reset that is recommended in the book. So number one is list everything that you currently track. Number two, circle only the lines that truly predict success. We don't want more numbers. Less is more. Number three is kill the rest or push them to departmental dashboards. Departmental dashboards often go into a lot more detail, and that's where it should sit at the leadership team. It should be high level, name, one owner per line on the scorecard according to your accountability chart. Define what that number is in one sentence so everybody understands. Set a target you can actually hit, and then ratchet after consecutive greens and then review weekly in the level 10 meeting. If you can't describe the metric without a paragraph, it's on a metric. It's a novel we need really. Really simple numbers that will actually tell us what is going on. Again. I'm just going to finish off with a few quick fire templates by function. So these are some of the things you could be thinking about. Sales, booked meetings, proposals sent, win rate, average deal value. Marketing, qualified leads, lead to meeting, percentage cost per lead pipeline, influence customer success, time to first response, first time resolution, percentage, net promoter, score, ops and delivery on time in full cycle, time defects per 1000, rework, percentage, finance can be debtor days, forecast, accuracy, gross margin, percentage, people in HR, time to fill 90 day. Success rate, regretted, turnover, visionary, strategic relationship touches, big bet, milestones, integrator, rocks, on track, issues, closed scorecard, percentage green. Just pick one or two each for the main departments and keep the room tightly focused on measuring those things. And don't forget, a scorecard is not set in stone. It should adjust every 90 days based on what the company is hoping to achieve. In the next 90 days, there'll be certain things that always stay there, your revenue, your number of sales, the number of face to face calls, might always be on there because they are the indicators that really give your finger on the pulse of business. The leading stuff, like the proposals, the face to face meetings, they will always be on there. But you might find in the next 90 days you've got a particular issue that you want to focus on. So I had a client who had a real issue around leave and sick leave being taken. We added sick leave onto the 90 day scorecard for all departments. And the reality is, as the old saying says, what gets measured gets improved. As soon as we put that onto the scorecard, there was an ownership of sick leave, and was really pinpointing where the sick leave was coming from. And so we started to deal with it through the IDS section, and we made changes that actually improved the attendance of people and reduced the sick leave. So don't think that they're set in stone. Do think about how you can review them every 90 days. Are they still aligned with our rocks for the 90 days? Are they aligned with our accountability chart for the next 90 days? Are they aligned with what we're trying to achieve in the next 90 days in terms of our overarching numbers? So there the tips and things I've taken from the book. The book goes into a lot more detail. I would highly encourage you to read it. It's a fantastic book, but it's going to close on how you can go from hopium being that the mixture of hope and optimism to actual habits. So here are the key things. If your scorecard is all green, it often means you're looking at the wrong numbers. So take a good, hard look at your measurables and make sure you're measuring the right things. If your scorecard is always red, it often means we're chasing fantasy targets. That means we need to actually use the scorecard to motivate and inspire, drop those targets down, get some greens on the run, win and stretch, win and stretch until you actually achieve what you need to everybody must have a number. Numbers create clarity. They create behaviour. They create truth. Every single person, full stop, must have a number predictive or leading beats lagging. It's about acting before it really hurts, before it becomes a major issue. And so while you'll have to have some lagging indicators, make sure you have leading indicators in there. And red is a prompt. It's your it's your light on your car dashboard. It's not a not a panic, it's a prompt to IDs it drop it down IDs at your weekly meeting. And finally, less is more less, but obsess five to 15 numbers owned by one person, measured on a weekly basis.

Debra Chantry-Taylor  38:34

So your call to action, this is what I'd love you to do from this particular podcast, go away number one and audit your scorecard, kill your vanity metrics, kill your watermelon lines, and have a really decent scorecard that actually has a finger on the pulse of the business. Number two, give every seat a clean outcome driven measurable. These are the rules of the game that business is a game like any other game. People like to know how they win. They like to know what the rules are. They not like to know how they can come out on top. So make sure every single seat has got a clean outcome, driven measurable. Number three, lower those fantasy targets build the wins ratchet later, and then win stretch. Win stretch. That's how you'll get to your fantasy target in the end. But don't start there. And number four, praise the first honest red that shows up if somebody comes with an honest red or an honest green, for that matter, to celebrate success as much as the honest reds, but make sure if they're genuinely honestly red or genuinely honestly green, praise them and then work out what we're going to do. If it's a green, it should be a high five and a well done. If it's a red, drop it down. Let's take it down to IDs. So I'm talking to you, Mr. And Mrs. Visionary. Put the hopium down. It might make us feel good. Promise you, you'll breathe better on cold, clean data. If this episode has hit a nerve and you want help making your scorecard predictive and peaceful, you know where to find me? Debra. Action.com.au, let's get you a better business and a better life with numbers that tell you the truth. I hope you've enjoyed listening to this. I do highly recommend reading the EOS data book. Please reach out if I can help in any way.