How To Build A Project Scorecard

A balanced scorecard is a way to monitor progress against a set of key, agreed measures. Companies typically have goals to focus on each year, such as revenue growth or health and safety targets.

It’s called a balanced scorecard because there are different measures on it and the company has to balance performance across the whole piece – it’s no good having amazing customer satisfaction scores if your staff costs are spiralling out of control, for example.

This model is in use in many businesses and it’s really helpful to scale it down for projects too. It is a sensible and standard way of monitoring your progress monthly. How do you start? Here’s a quick guide.

1. Identify your measures

The items that you want to include on your project scorecard should be the things that matter to you and your stakeholders, and that will persist throughout the life of the project.

They should be metrics that are available to you (or that you can make available). It’s no good including ‘impact on company revenue’ if you are never going to be able to find out what impact your project has made.

Financial information and quality targets are good starting points, and it is sensible to group measures into categories. One way to do it would be something like this:

• Project quality: audit results, project benefits, quality targets
• Project budget: Earned Value measures, project running costs (could also include benefits like return on investment)
• Project delivery: milestones, customer satisfaction
• Project team: staffing levels, resource allocation, staff satisfaction or engagement.

The measures you choose should be things that are meaningful to your team and sponsor. There’s not much point, for example, in assessing your progress against project benefits if you know your project won’t deliver any benefits until a good few months after it has finished.

The standard corporate balanced scorecard areas (based on the model from Robert Kaplan and David Norton) are financial, customer, internal processes and learning and growth. That gives you the opportunity to see the whole organization (or project organization) without solely focusing on the finances. But the good thing about the idea of a scorecard is that you can basically create whatever you want to track.

How many categories to have?

Four categories is my preferred number because you can then display each category as a quarter of a circle, and have a nice circle diagram to represent your scores for that month.

But if you don’t want to do that, a spreadsheet makes a great alternative and is probably easier to populate! Think about who is going to be reading it and what they would find most easy to use.

Personally I’m a fan of presenting information in a graphical format because that’s how I find it easier to digest numerical data, but you know your team best so lay out your scorecard however suits you.

Choose easily measurable categories

Finally, your measures should be things that you can measure easily. Your scorecard should be a neat way of monitoring your progress monthly, an addendum to your project report and something you can use when you are communicating up to your project sponsor. So you don’t want to spend hours pulling it together.

Use a mixture of leading and lagging indicators. Leading indicators are things that help you look forward and predict project performance; lagging indicators report on what has already happened.

2. Agree your targets

What makes your project red, amber (yellow) or green on a particular measure? Set measures for what Red means, or what makes a project Green.

Even if you are using something that is commonly understood in the business, it is still worth defining what it means. Every measure might have something slightly different. Here’s an example:

• Project quality: Red = All modules failed last verification, Amber = Over 20 modules failed last verification, Green = Under 20 modules failed last verification
• Timescales: Red = currently on track to miss published end date and/or more than 3 milestones on the critical path, Amber = currently not on track but expect to be able to still hit published end date and no critical path milestones impacted, Green = on track

As you can see, Red is defined differently for each measure.

Read next: Real-life tips for managing Red projects and getting back to Green

Use the targets across all measures

This all sounds quite time consuming but once you’ve set it up, you can use it for practically any project. Also, not only does this make it clear for everyone reading your scorecard, it takes away some of the work from you. You don’t have to apply your critical judgement every month as you’ve done it once and now you simply refer to the targets to see exactly where you are.

Share what the targets mean

You’ll have to find a way to communicate this – once is probably enough as long as people know where to find the data if they need a reminder. Try to avoid using footnotes in the document itself as people often don’t bother to read them and they make the page look cluttered. A page on the project’s intranet site or in the wiki might be a good place to store them.

Using RAG on the scorecard

My preference is to mark each area of the scorecard as red, amber or green as this contributes to the visual look and feel of it and helps you see areas in trouble at a glance.

This works because we use RAG scoring mechanisms on other areas of the project (such as the risk log) so everyone understands it.

If you use something different, or your stakeholders are used to information being evaluated in a different way – like with smiley faces, on a 1-10 scale or something different – then use that. Make it as easy for them as you can.

KPIs are different to scorecard measures

What’s the difference between a KPI and the scorecard? The scorecard can have any type of metric on including those that are related to project health. Key Performance Indicators normally relate to project outcomes e.g. number of applications processed, number of widgets made. If you want to include project health measures, check out my list of PMO KPIs and add some of those to the scorecard.

Additionally, a scorecard has multiple measures, a KPI is just one.

3. Collate and share the results

A balanced scorecard is a great communication tool. Now you have your model set up, your diagram or spreadsheet prepared, the next step is of course to assess your project against your targets.

Gather your data, populate your balanced scorecard template and produce your first version of it. With the results collated, you should have a good graphical snapshot of the project’s progress to be able to share with your key stakeholders and the project team.

Ask for feedback

You’ll most likely get some useful feedback the first few times that you share the scorecard results with everyone. Think about how you could incorporate this to make the model clearer or to include measures that your project sponsor thinks are essential (but forgot to tell you about the first time).

Of course, you may also get feedback that you can’t incorporate, so explain why. That should stop people asking you for the same changes again next month.

Act on the results

Remember, the point of doing this is to record key measures and project performance, so it’s also important to build in some time to do something about the results.

If any of your project measures are reporting as Red (or a sad face, or 0 out of 10 or whatever) then what are you going to do about it? It’s pretty pointless to go to the effort of measuring performance if you aren’t then going to take action to put right anything that is identified as underperforming.

While the scorecard is a great communication tool, it’s also a performance management tool to help you manage the project more effectively, so use it.

4. Track trends

Gathering a set of standard monthly data items on a regular basis gives you the information you need to track trends on your project. Looking at the scorecard data might help you identify where your project team is struggling. An element that goes from Green to Amber is likely to go to Red next month unless you do something about it.

Positive trends are also good for internal trumpet-blowing! Look at your dashboard figures and see what you can shout about. You’ll have turned something around or have a good news story in there somewhere, so share your positive results with your colleagues.

5. Report and recommend

The data on the scorecard is useful, but you can demonstrate more business acumen and value to your execs if you go beyond tracking trends and showing them the data, and suggest what they can do with it.

Use the trends to identify recommendations that you can make to improve project delivery. You should be course-correcting from the data anyway, but let management know what actions you have taken. Every action plan needs someone leading it, so you can build in remedial actions to your project schedule, and link it to your Kanban board or Gantt chart so the work actually gets done.

Using scorecards for the PMO

While project scorecards are great tools for project managers, you can also use them at the Project Management Office level to monitor the health of your project portfolio overall.

The measures you put on the scorecard are likely to be similar to those in use on a project scorecard, but you would want to pay more attention to things that are important to the PMO such as resourcing.

Here are some ideas for metrics that you could use:

• Percent of projects with complete project information or documentation
• Percent of staff working on more than one project
• Project team member churn rates
• Percent of projects with overallocated resources
• Percent of projects with red indicators (maybe in comparison to last month, so you’d show an increase or decrease against the last reported figure).

A PMO-level scorecard could take a sub-set of dashboard measures that you are already collecting. Or it could roll up the scorecards from all the projects and report at a consolidated level. This could give you an interesting picture for the organization as a whole and help you identify business-wide weaknesses.

For example, if across all projects the project managers are reporting Red indicators against financial measures, then you can target training at boosting their budget handling skills.

Using scorecards for strategic planning

Traditionally, scorecards were done at department or organization level, as part of a strategy map. For example, it could help identify customer value propositions, or tell the story of how close you are to reaching organizational goals.

The performance measures tracked could show financial health of the organization overall, customer care survey results or brand recognition, and then you can build your strategy next steps off the back of that. This data could feed a priority matrix to help you identify which projects to work on to meet strategic goals.

In other words, scorecards can be used at all levels in the organization. If you do end up with multiple scorecards, try to make sure the ones you create dovetail into others so the story isn’t fragmented.

Numbers never tell the whole story!

However good your measurements remember that they don’t replace your judgement (either at a project or PMO level). Numbers never tell the whole story: context is everything. A Red score might not be that much of a problem in the grand scheme of things and equally reporting a measure as Green, while technically correct, might hide some other issues with the project activities.

Scorecards are a good visual way of communicating progress, tracking trends and showing the snapshot status of a project but they aren’t a replacement for solid project management skills.

And, as I have said, anyone can report but it takes someone to act on the data and improve the results. As a project manager, that should be your job. The scorecard is simply there to highlight problems. Metrics help you manage projects and performance but the actual ‘management’ is down to you.

Tools to create a balanced scorecard

A lot of project management software products have scorecards built in, look for a summary report or a dashboard-type report. You can create something basic on a PowerPoint slide and use it as the front page in a steering deck. You can create something in Excel. You can get scorecard software or find a scorecard template.

My tip (from having to create lots of status update slides in my career) is to not make something that requires too much manual updating every month as you are just making work for yourself. Think about the maintenance of the scorecard and what it will be used for.

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