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Welcome to my Newsletter - Monday Morning Motivations (MMM) - Article #13:

Can the key to improved team performance be as simple as keeping score? Discover the surprising impact of scorekeeping

May 30, 2023

Today we delve into the critical roles of scorekeeping and visual display in the realm of setting objectives and goals within the workplace. Engaging your team in determining the design of their scorecards and visual displays is key, as their intimate knowledge of the workflow makes them the ideal decision-makers.

The concept of scorekeeping extends far beyond just tracking the completion of tasks. In any working environment, it involves a comprehensive examination of the workflow, the output, the time taken to complete a cycle (cycle time), and the identification of any defects or errors that transpire throughout the process. When we talk about forming a team, it should ideally be constructed around a specific process, with the primary objective of refining and enhancing that process. However, the crux of this entire scenario is understanding the current performance of the process, without which no effective improvements can be instituted. This fundamental insight is provided by scorekeeping, which forms the bedrock of process optimization.

To illustrate this principle, let's consider a practical work situation from my experience with a financial lender. In this case, the focus wasn't confined to the measurement of settled loans or the total amount of funds disbursed. Instead, we had to delve deeper into various other parameters along the entire lending process.

One key measure we considered was the 'Time to Approval,' often referred to as 'Time to Yes.' This metric gauged the duration between a customer's loan application submission and the financial institution's approval. This time frame is critical in the fast-paced financial sector, as potential borrowers often choose their lenders based on how quickly they can get approved.

Another metric we closely monitored was the 'Time for Cash to be Disbursed,' or 'Time to Cash.' This parameter captured the time span from the loan approval until the actual disbursal of funds to the borrower. Again, the faster this process, the more attractive the lender appears to potential borrowers, which directly influences the lender's competitiveness and profitability.

We also kept a vigilant eye on the number of deals that were not approved within a 24-hour timeframe. This particular metric is crucial in identifying any potential bottlenecks in the loan approval process, helping to streamline operations and improve customer satisfaction.

Further, we tracked the number of applications still in the pipeline, providing a clear picture of the workload and helping to prioritize tasks effectively. It also allowed us to identify and rectify any inefficiencies within the approval process.

Lastly, we monitored the number of applications that had to be reworked or handed off to the document follow-up team. This measure acted as a direct indicator of the quality of the initial application processing. A high number of reworks may signify an issue with the application acceptance process, leading to re-evaluations and necessary improvements.

In addition to implementing these tracking measures, we took the transparency of this scorekeeping a step further. We ensured that these statistics were clearly displayed across the office on large, visible dashboards. This real-time tracking allowed for immediate identification and rectification of issues. It also encouraged a sense of accountability and collective effort among team members, since everyone could see how their individual actions directly contributed to the overall performance.

Through this holistic approach to scorekeeping, we were able to drive continuous improvement and optimization in the loan processing workflow, leading to enhanced efficiency, productivity, and customer satisfaction.

While striving for continual improvement, we also need to observe data and trends to set targets. The performance of individuals and the culture within the organization are paramount, as is keeping track of the numbers. To enhance process performance, we need to establish numerical targets and ensure we're keeping score.

Just like in a sports game, where a scoreboard is always present, having a scorekeeping mechanism in business is essential. Ever wondered why some sports become extinct and others flourish? The answer is motivation. Nothing fuels motivation more than witnessing the fruits of our labor. Scorekeeping, by its very nature, is visual, immediate, and provides feedback, all crucial ingredients for a successful business recipe.

Try a simple experiment to experience the power of scorekeeping. During a football or basketball game, jot down each score you hear, marking them as positive or negative. You'll be astounded at how scorekeeping can influence motivation to continue participating and spectating. Remember, while tracking our scores, we should focus on the positives, encouraging a healthy competitive spirit.

The feedback effect is a critical component derived from the supplier input process, output, and customer. Feedback should be appropriately given and timely. Visual displays are essential in every workspace, and they should be large, bright, and engaging. They should contain baseline data, along with records of new strategies and their results.

A fishbone diagram, also known as a cause and effect diagram or Ishikawa diagram, is a powerful visual tool used in problem-solving and root cause analysis. Developed by Kaoru Ishikawa, a Japanese quality control expert, it helps to systematically identify and present potential causes of a specific problem or effect. The diagram resembles the skeleton of a fish, hence the name 'fishbone,' and it can effectively distil complex issues, ranging from late shipping to machinery or manpower issues, into manageable and solvable components.

Here is a step-by-step guide to constructing a fishbone diagram:

1. Define the Problem: Write down the problem you want to solve (the effect) on the right-hand side of the diagram (the fish's head). This could be anything from delayed loan approvals to increased customer complaints.
2. Identify the Major Causes: There are typically six categories of causes which are often referred to as the 6 Ms - Machine, Method, Material, Man (or People), Measurement, and Mother Nature (Environment). However, you can customize these based on the context. For each category, identify potential causes related to the problem. For instance, under 'Man,' you might note insufficient training, high turnover, or unclear job descriptions.
3. List Sub-Causes: For each major cause, brainstorm possible sub-causes. These are placed as branches from the major cause lines.
4. Analyze and Prioritize Causes: Discuss and analyze your fishbone diagram. What stands out? What areas require immediate attention? The fishbone diagram can help prioritize actions.
5. Develop Solutions: Once the most significant causes have been identified, start thinking about potential solutions. These should target the root causes rather than the symptoms.

Let's consider an example related to the previous scenario - high "time to approval" for a loan in a financial lender's office.

1. Define the Problem: The defined problem (the fish's head) is "High Time to Approval for Loans."
2. Identify the Major Causes: The team may identify four main categories: Process, People, Technology, and Policies.
3. Process: Maybe the loan approval process is convoluted or unclear.
4. People: Perhaps there's insufficient staff or lack of training.
5. Technology: The software being used could be outdated or malfunctioning.
6. Policies: There may be stringent policies that slow down the process.
7. List Sub-Causes: Under "People," sub-causes might be: high turnover rate, insufficient training, and low motivation. Under "Technology," sub-causes could include: outdated software, frequent system crashes, and lack of automation.
8. Analyze and Prioritize Causes: After listing out all the potential causes and sub-causes, the team can discuss and identify the most significant ones. Perhaps they conclude that the primary issues are outdated software and a convoluted approval process.
9. Develop Solutions: The team could then look for solutions to these root causes, such as implementing new software and streamlining the approval process.

By using the fishbone diagram, the team is better equipped to systematically identify the root causes of a problem, brainstorm solutions, and take action to improve the process.

Let's consider the benefits of a balanced scorecard. A mistake that many companies make is primarily focusing on financial measures, which can inadvertently lead to a drop in quality and productivity. Cost-cutting is beneficial but should not be the sole focus. A balanced scorecard ensures a measure of total performance by considering customer satisfaction, quality, and financial measures.

A balanced scorecard model begins with a long-term strategy and then moves out to four quadrants. These are customer satisfaction and quality, business processes and workflows, financial measures, and learning and development. Prioritizing learning and development can have a positive influence on the other three quadrants.

In order to measure cycle time reliably, we need to ask ourselves how consistent we are in meeting the set timeframe. Attention should also be given to variability by graphing all our data and spotting inconsistencies. This can provide insights into our customers' perception of our reliability and productivity.

Several different aspects should be measured to understand how your team is performing. Financials like revenue, costs, and return on assets are important. As a manager, you should aim to increase the return on assets and keep costs down while maintaining or increasing revenue. Learning and development measures like training course completion and multi-skilling should also be tracked.

Establishing a balanced scorecard begins with defining your measures and setting up some baseline data for each one. From there, we graph the baseline data and set short-term

Final thoughts

The practices of scorekeeping and problem-solving using tools like the fishbone diagram are crucial for any manager who wishes to effectively lead their team. Scorekeeping goes beyond just tracking work; it involves continuously monitoring workflow, output, cycle time, and defects, thereby providing actionable insights into the process performance. It serves as the compass, guiding the team to understand where improvements can be made.

Similarly, the fishbone diagram offers a practical and methodical approach to identify root causes of problems, promote collaborative brainstorming, and encourage action-oriented solutions. By visualizing issues and their sources, it simplifies complex problems, making them more manageable.

For new managers seeking to implement these ideas, here's some practical advice:

1. Start Small: Don't attempt to measure everything at once. Begin with a few key metrics relevant to your team's output and gradually expand your scorekeeping efforts.
2. Involve Your Team: Effective scorekeeping and problem-solving are collaborative efforts. Engage your team in the process of deciding what metrics to track and how to improve them.
3. Use Visual Aids: Use tools like dashboards and diagrams to visually present data and problems. This makes the information more accessible and easier to understand.
4. Encourage a Culture of Continuous Improvement: Foster an environment where regular feedback is encouraged and used to make iterative improvements.
5. Prioritize: Not all problems are created equal. Use tools like the fishbone diagram to identify and focus on the most impactful issues first.

Remember, the goal is not just to identify problems, but to find effective solutions that improve the process and enhance the team's performance. As a manager, your role is to guide and facilitate this process, leveraging these tools to drive your team towards success.

Cheers,

Jonathan Chan

 Empowered Leader 

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