There is no one single way to measure performance or to see how well a company is performing on the basis of the prices that are being set. However, it is good practice to design and update continually a structured report that covers key operational and strategic performance. It does not have to be long but should be a simple way to see how well things are, or are not, going so that praise can be given or focus for corrective actions can be made effectively. Indeed, a balanced scorecard could be on a single side of A4 paper.
The characteristics of a balanced scorecard need to align to the pricing strategy that is in place and focus on a small number of metrics; examples may be:
- Number of new clients per month
- Net margin % across a number of portfolios or segments of the business
- Overall gross & net margins for the month
- Monthly turnover
- Number of opportunities bid for vs number of opportunities awarded
- Top 5 risks to profitability, and mitigating actions
With a balanced scorecard in place, the objectives and performance reporting of staff can be aligned and monitored at a regular frequency – a balanced scorecard could be updated/reviewed every month with staff performance appraisals occurring every 6 months by mapping each individual’s role to the results of the scorecard.