How to develop a scorecard?

Everyday business owners and career professionals are faced with making decisions. Some decision are easier, while others are a bit complicated. For complicated decision does one "go with their gut or feeling"? or is there a better, more reliable approach?

One reliable method is the use of "scorecards". Scorecards are used to tabulate results to make an effective decision on the best solution (or course of action) when dealing with multiple decision factors.

Scorecards are very common in large organizations. However, recently implementing the scorecard methodology has become increasingly popular among small and mid-sized businesses. So, how does one assemble and effective scorecard?

The final scorecard product, in many organizations, looks like a table drawn on paper with many rows and columns. The number of rows and columns depend on the number of solutions one is deciding between as well as the number of decision factors.

Let us build a scorecard:

1. Start by writing down the names of the items you are deciding among, e.g. Company A, Company B, Company C.

2. Write down your decisions factors, e.g. Customer Service, Local, Public Company, etc.

3. Draw a table with rows and columns. The number of rows should be equal to the number of items you are deciding between (See #1)

4. The number of columns should be equal to the number of decision factors you are deciding between (See #2)

5. Once you have created your table you will need to add a weight (number) each decision factor i.e. how importance, from 1 to 10, do you place on each decision factor, e.g. Having good customer service for you may be 8, while having the company local is 10, etc.

6. After weighting the decision factors, you then tally the scores. In this example the highest score wins, and therefore your calculated decision should be to opt for the solution that has the highest score.

The scorecard method replaces the "gut feeling" approach and ensures a calculated and well though out decision process.