As a good CFO, keeping track of numbers and ratios is an important part of what you do for a living. But are you mostly tracking the numbers for the overall business? If so, are you paying enough attention to the performance of your own department and team members?
Here are some concepts you can use, starting today, to get more out of your finance team and make the finance function even more important to the business.
But first, let me take you to a faraway land. How about Tahiti? There you are, on the beach, not a cloud in the sky and the warm Pacific breeze gently blowing. You have no way of knowing what’s going on at the office, as you’re cut off from all communication. (You have to get a lot more remote than Tahiti these days to be really isolated, but bear with me.)
All of a sudden, a bottle washes up onto shore with a single sheet of paper inside. You open it up and it’s an Excel sheet with a couple dozen numbers on it. Pay no mind to how it got there — this is an apocryphal tale about knowing how your department is doing. The point is that no matter where you are or what you’re doing (or not doing), this one sheet of paper, this Scorecard, will give you an absolute pulse on that each week.
So, what’s on your Scorecard? Here’s how it should look.
Column 1 contains a handful of measurables that provide a perfect snapshot of your department’s efficiency, productivity, and value to the business.
How do you know what to measure? Just think about what will keep you and the finance team ahead of that phone call from the CEO, COO, or business unit head asking for information they needed yesterday.
Gather your team in front of a nice, clean whiteboard and brainstorm all the data points you could be measuring and that might be suitable for the weekly Scorecard. Come up with 10 to 30 items.
Then do a little “keep/kill/combine” of those items to pare down the list to something manageable. Remember: less is more. Limit these to somewhere between 5 and 15 items.
Column 2 of the Scorecard shows, for each measurable, the name of a person who owns that item and is responsible for achieving it every week.
Column 3 shows the weekly goal for that measurable. There must be one. If there’s no goal, what’s the point of tracking it?
Columns 4-17 (if you have 15 measurables) track each measurable each week for an entire quarter on a rolling basis to see if you’re on-track or off-track. Why weekly? Because if you track a data point quarterly or monthly, by the time you realize you’re off-track, you’ve lost valuable time. By tracking weekly, you’ll be able to make crucial adjustments.
When you’re off-track from any particular goal, discuss it in your weekly team meeting to get to the root cause of the issue. Then solve it fast by creating to-dos assigned to specific people and due for completion by the following week’s team meeting.
A final note: Don’t expect to love your Scorecard instantly. It’ll take two or three months of tweaking until it’s pretty much perfect and the finance team is a well-oiled machine.
Mitchell York, a former president of Lending Tree, is a Professional Certified Coach and Professional EOS Implementer. He can be reached via www.york.coach or at Mitchell@York.coach.