Information is a powerful tool on its own, and it becomes exponentially more powerful in the hands of those who can wield it properly. A balanced scorecard can be one of the most crucial weapons in an auto dealership manager’s arsenal.
What is a balanced scorecard?
First, I’d like to make sure we are all on the same page on what a balanced scorecard is, at least as it pertains to business. A balanced scorecard is a short document that shows the performance of your auto dealership. Usually, they are less than a page and have important information pared down, so users can get all the data they need at a glance. The data that is gleaned from these sheets can be used in a variety of ways, whether it is a CEO looking at the performance of different locations, or a first-year employee looking at sales goals.
Why is it important to disseminate information to all levels of a company?
Circulating information can help your employees feel more involved, as they can see how their performance impacts the dealership as whole. Information also gives them goals to shoot for going forward. For example, if the goal is to sell 20 cars this month, the employee will work harder to reach that goal and feel more accomplished having hit that target, regardless of whether there is a prize. Management can also use these numbers to help drive decisions.
Balanced scorecards are helpful in any sector of business. At a financial institution, for example, the branch manager could see that their new openings of student savings accounts are down. Using that information, the institution might coordinate a date to talk to the high school classes about financial literacy. The result – getting their institution out as the one where students should deposit their Christmas gifts and first paychecks as they move into adulthood.
How should you build a balanced scorecard to get the most out of it?
There are a few key steps I recommend to increase the effectiveness of your balanced scorecard. First, keep it simple. Only put relevant numbers on it; for example, if you run a car dealership, you can put the sale of 20 cars for their total value, and not individually. Second, make your balanced scorecard easy to follow. Choose some sort of logical pattern in the beginning, and stick to it. Keep the most important numbers clearly visible or bolded to make them quickly accessible. And third, make sure you choose the right timeline for releasing your balanced scorecard. It doesn’t have to be a daily or weekly occurrence; monthly or quarterly may be sufficient for your users.
However you choose to use balanced scorecards in your business, the key is to get started today. ARB’s Auto Dealership Services Group is here to help. Contact our industry leader, Bart Haag, to discuss your strategy.
by Justin Burley, Associate