The need for the personal scorecard is promoted by known saying “What gets measured gets done.” People create their scorecards, divide their life into four, eight, or more sectors, and then expect for a miracle to happen. The next quarter/year they get back to their scorecards and see that:
- Some obvious easy-to do things were improved (and hopefully will motivate you to go ahead), but…
- Most of the really ambitious goals are still there with no or little progress
Magic did not happen…
If compare balanced scorecard to a sport car, then you just started your engine. Read this article and I’ll teach you how to start driving and get to the tangible results.
1. Metric Problem: focusing on the results and efforts, instead of leading actions
Let’s take a typical metric that I often see on personal scorecards (anyone wants to be paid higher):
- Salary increase, %
What does this metric measure? It actually measures the result of someone else’s action.
- Your boss needs to decide to increase your salary, not you.
You are not working with this metric directly; it reflects a boss’ perception of your value for the company, but you don’t influence it directly. When I tell this to the people a normal reaction is to focus on the job done. They say, let’s then measure:
- Hours spend working on the project
Now you are measuring your efforts and imply that this is what your boss need… The more hours one spends on the project, the more value this person creates for the company. Or not?
Still this doesn’t work. You can spend all the weekends working on the new project, but you won’t achieve an increase in a salary. Why? Because you are still measuring your efforts, not the value that you create.
Following this logic the next question is: what should I measure then?
- You should measure what actually matters for your company!
Someone might argue that this sounds more like Captain Obvious’ citation, but this approach actually makes the difference between just a scorecard (a measurement tool) and balanced scorecard (a management tool that helps to align actions with strategy).
2. Finding cause-and-effect connections
The right approach is to start with a question: what should I do to get a salary increase? This is not a sort of question that you can answer immediately. You might need to talk to your boss about career opportunities, value creating chain in the company, and skills that are needed for a new position.
- Once you have an answer, plan your response that will lead you to the desired outcomes.
For example, your boss might suggest that increasing First Call Resolution Rate is one of the priorities for the company, and achieving a certain benchmark will be compensated with higher salary.
In this case you can have two metrics:
- Leading metric: Fist Call Resolution Rate, % (it is aligned with the value that you should create)
- Lagging metric: Salary increase, % (it measures expected results)
People focus too much on lagging metrics and forgot about leading ones. Lagging metrics don’t give action-oriented information, so you need to have leading metrics to see both sides of the coin.
3. Dream-list problem: Dreams and actions are not connected
Have a look at your personal balanced scorecard. Are there metrics only? Hopefully not, your metrics need to be aligned with some objectives. What kind of objective do you have on your scorecard?
- Personal dreams and values
- Objectives (not the same as goal )
- Specific things to do
Actually you should have all of them! Let’s find some analogies with the business world:
- Personal dreams -> Mission and vision statements
- Personal Goals -> Business goals (general directions to what need to be achieved)
- Personal Objectives -> Business objectives (similar to the goals, but with much higher level of the details)
- Things to do -> Initiatives and action plans
A typical problem is focusing too much on the “dream” part: “Increase in a salary,” “New house,” “Travel worldwide 1st class,” etc. Other levels should be filled in as well.
- “Travel world-wide 1st class” (Dream level)
- “Get position in the company where one travel worldwide 1st class” (This is a the level of the vague goals)
- “Get an MBA degree,” “Work on this project with ABC Company.” (This is the objectives level)
- “Screen MBA programs,” “Find one that deliver required skills and expertise.” (This is an action level)
One important thing that we did:
- We showed how top-level dream is linked down to the lower level goals and objectives.
4. Completeness problem: Your life is not a straight road, nor is your scorecard
Many authors promote a very technical approach to the personal balanced scorecard. You get your objectives, you get your KPIs, you make everything S.M.A.R.T.  and here you are… a worldwide recognized professional, running a fast growing business, with the highest stock market.
A life story might be a straight line if told by the biographer or some business guru. In practice the most successful persons, as well as the most successful companies have achieved excellent results not just because of great planning skills, but because of many attempts to success that they made, and failures that were their teachers on this road to success.
In the most cases your scorecard won’t be 100% completed. Some goals will be unclear and you will need additional research just to understand how to formulate your goal. In the most cases you won’t know the correct way to measure your performance, or your metrics will be too generic.
For the most people this is very demotivating and they prefer to forget about their scorecard project. A solution is to be prepared for these situations and to take them as a part of the natural problem solving cycle:
- Having unclear goals is normal
- Having intermediate goals is normal
- Starting with just 20% of metrics defined is normal
What is more important is that you get back to your scorecard frequently, and then revise and update it with new findings.
5. What’s wrong with dividing life in 4, 8, 20 areas?
Balanced Scorecard includes four well-known perspectives:
- Internal processes
- Education and growth
Authors that write about personal balanced scorecard follow one of the two paradigms:
- Coping/renaming original four perspectives into something more person-oriented. For example, renaming “Customers” to the “Family and relationship,” “Education and growth” to the “Personal development,” and “Internal processes” to the “Health Care.”
- Dividing into the new areas. The number of these areas might be 4, 8 (life wheel approach), or for example 20 
These divisions are a good point to start thinking about various aspects of the life, but this approach is ignoring one important idea about the balanced scorecard. I’m talking about cause-and-effect relationships between objectives within various perspectives.
6. Balanced Scorecard is not just about grouping metrics into 4 perspectives
The real Balanced Scorecard is not about a rectangle diagram that you saw on the Internet. It is more about a strategy map.
- On the strategy map we have financial goals on the top (Finance perspective), then we explain how these financial goals can be achieved by satisfying certain customer needs (Customer perspective), what business systems we need to satisfy these needs (Internal Business Process Perspective), and where should we focus our leaning efforts to be able to do all this (Learning & Growth Perspective).
Most personal scorecards ignore this logic as it is too complex. For example, it is even hard to decide what should be on the top – career/money, or family/relationship, or health/personal development.
Actually, a business faces a similar problem. On the one hand companies need to have an excellent product, and on the other hand their operations need to be good as well, and they need to be good with their clients.
- How do businesses solve this problem? They don’t have just one strategy – they normally follow three strategic themes.
A good question is: “What should I have on the top of the BSC diagram?” Have a look at the advice that we gave to non-profit organizations when discussing financial perspective. In the case of the personal scorecard you might put on the top stake holder (yours) interests that will be a derivative from your core values.
Personal Balanced Scorecard Best Practices
- Start with thinking “strategically.” What are you dream-goal? What prevents you from achieving these goals? What did you already try? What experts recommend to overcome these obstacles? Take some ideas from this article.
- Have a map of your goals that support your dream-goal. Make sure you see the cause-and-effect relationship between these goals. Follow the ideas from the strategy map article.
- You are not working in a vacuum, so make sure you form a “team” (might be your boss, colleagues, business partners, family) that know what their role will be. Similar process in the business scorecard is called cascading.
- Revise the way you deal with new challenges. Make sure that what you do and the way you do it are aligned with your personal scorecard/strategy.
- Measures are not that important. Use them to motivate yourself to walk the extra mile. Don’t measure something just because you can, all measures should be aligned with your goals. Keep a balanced set of leading and lagging metrics.
- Sometimes metrics are a short answer to the questions: “what skills do I need?” “What is really important?” “Where should I pay more attention?” For example these are 8 entrepreneurial KPIs. Research for ready KPIs and use them to stimulate your creative thinking and to come up with more specific goals.
- If your company follows BSC methodology, then it might be a good idea to link your scorecard (at least its business part) to the company’s one.
It’s your turn
It would be great to hear you experience with personal balanced scorecard. What did you try? What did work? What didn’t? Would you add something to the best practice list of the ideas?
- ^ Vision and Goals vs. Strategy Map and Objectives, 2013, Aleksey Savkin, http://www.bscdesigner.com/vision-and-goals-vs-strategy-map-and-objectives.htm
- ^ SMART criteria, Wikipedia, http://en.wikipedia.org/wiki/SMART_criteria
- ^ 7 Steps to Developing And Using Your Own “Personal Balanced Scorecard” (PBSC), 2007, Dr. Lauchlan A. K. Mackinnon, http://www.think-differently.org/2007/09/7-steps-to-developing-and-using-your/