THE RESOURCE FOR CORPORATE FINANCE, ACCOUNTING & TREASURY PROFESSIONALS

Tim Weeks
Partner and Director of Scoreboards, CF...
Learning Objectives

•
•

•
THE RESOURCE FOR CORPORATE FINANCE, ACCOUNTING & TREASURY PROFESSIONALS

Tim Weeks
Partner and Director of Scoreboards, CF...
How many minutes are actually played in an NFL football game?
How many minutes are actually played in an NFL football game?
–
11 minutes
How many minutes are actually played in an NFL football game?
–
11 minutes
–
–
–
–
–

1 hour of commercials
75 minutes of ...
Key Metrics
NFL Football?
Factor
Fewer Turnovers
More Rushing Yards
Greater Time of Possession
More Total Yards
Higher 3rd...
How many calories does an average NBA player burn during a game?
How many calories does an average NBA player burn during a game?
–
Approximately 860 calories on average
–
NBA forward run...
Key Metrics
NBA Basketball?
• Two most important predictors are…
– Field goal conversion (% of baskets made compared to sh...
What is the average life of a baseball in Major League Baseball?
What is the average life of a baseball in Major League Baseball?
–
Average is 6 pitches
–
On average 60-70 balls are used ...
Key Metrics
MLB Baseball?
• Pitching most important
• Starting pitcher’s “Earned Run Average” (ERA) best
predictor
• Secon...
What Do We Know?
What Do We Know?

Teams
Score
Runners on Base
Channel (Branding)
Home Team

Pitch Count
Outs
Inning
Game
Therefore, What?

Teams
Score
Runners on Base
Channel (Branding)
Home Team

Pitch Count
Outs
Inning
Game
Applying Sports Scoreboards to Our Companies
Scoreboards Become More Valuable Over Time
Familiarity over time leads to qui...
Building Your Company’s Scoreboards
Using graphics and current technologies to tell the story.

Determining the Metrics on...
Building Your Company’s Scoreboards

Traditional Financial Package
Excel Based Reports
Imported to Acrobat Pro and Marked ...
Building Your Company’s Scoreboards
Building Your Company’s Scoreboards
Example of Cloud Based Scoreboards
Trends, sorting, creative charting
Power in speedom...
Building Your Company’s Scoreboards
Features and Flexibility
From simple to complex
Interactive
Pivot capabilities
Graphic...
Building Your Company’s Scoreboards

Online Scoreboards
Interactive
Quick Identification of Trends, Key Metrics, Ratios
Ac...
Pitney Bowes

Good to Great

Profit per Customer

By Jim Collins

Wells Fargo
Profit per Employee

Walgreen’s
Profit per C...
Good to Great
By Jim Collins
“The denominator can be quite subtle, sometimes even unobvious. The key is to
use the questio...
Determining Your Metrics
Monthly Indicators

Weekly Indicators
Daily Indicators

5 Year Forecast
Annual Forecast
Quarterly...
Determining Your Metrics

Monthly Indicators
Profit and Loss
Balance Sheet
Statement of Cash Flows
Industry Comparisons
Ke...
Determining Your Metrics

Quarterly Forecast
13-Week Rolling Forecast of Cash Flows
Identifies and Manages the Peaks and V...
THE RESOURCE FOR CORPORATE FINANCE, ACCOUNTING & TREASURY PROFESSIONALS
Scoreboards Provide Part of the Translation
Learn through trial and error how the members of your team learn and
understan...
Just Get Started
Let go of the idea the process must be perfect. Engage in dialogue at the executive
level. Begin on the b...
Dashboard Projects Led by IT
Easy to turn over to the IT department. The most critical factor is what we are
tracking and ...
Please join us at www.proformative.com to ask any
additional questions you may have and to continue this
conversation with...
Corporate Performance Management: Scorecards & Dashboards that Drive Results
Corporate Performance Management: Scorecards & Dashboards that Drive Results
Corporate Performance Management: Scorecards & Dashboards that Drive Results
Corporate Performance Management: Scorecards & Dashboards that Drive Results
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Corporate Performance Management: Scorecards & Dashboards that Drive Results

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Video & Slides: http://www.proformative.com/events/corporate-performance-management-scorecards-dashboards-drive-results-webinar-november-15-2012
Companies have access to more and more data, and as such are challenged in leveraging the data to identify areas of operation that impact company performance, and creating metrics that allow them to effectively manage these areas of operation. What information and metrics do finance, accounting, treasury and related leaders really want, and actually need? How is technology being leveraged to consolidate, analyze and deliver metrics and dashboards that offer the right data to company leaders?

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Corporate Performance Management: Scorecards & Dashboards that Drive Results

  1. 1. THE RESOURCE FOR CORPORATE FINANCE, ACCOUNTING & TREASURY PROFESSIONALS Tim Weeks Partner and Director of Scoreboards, CFOwise
  2. 2. Learning Objectives • • •
  3. 3. THE RESOURCE FOR CORPORATE FINANCE, ACCOUNTING & TREASURY PROFESSIONALS Tim Weeks Partner and Director of Scoreboards, CFOwise
  4. 4. How many minutes are actually played in an NFL football game?
  5. 5. How many minutes are actually played in an NFL football game? – 11 minutes
  6. 6. How many minutes are actually played in an NFL football game? – 11 minutes – – – – – 1 hour of commercials 75 minutes of player shots, at the line of scrimmage, in the huddle and general milling about 7% of the broadcast on coaches and referees Costs anywhere between $150K and $250K to produce a game with a staff ranging between 80 to 200 Source: WSJ, 11 Minutes of Action, 1/15/10
  7. 7. Key Metrics NFL Football? Factor Fewer Turnovers More Rushing Yards Greater Time of Possession More Total Yards Higher 3rd Down Conversions More First Downs Home 83% 78% 77% 75% 75% 73% Away 72% 67% 62% 60% 59% 57% Overall Vs the Spread 78% 75% 73% 69% 70% 66% 68% 64% 68% 63% 66% 61% Source: http://twominutewarning.com/g13.htm
  8. 8. How many calories does an average NBA player burn during a game?
  9. 9. How many calories does an average NBA player burn during a game? – Approximately 860 calories on average – NBA forward runs approx 3 miles on average (college 2 miles) – Source: AOL News 9/14/10
  10. 10. Key Metrics NBA Basketball? • Two most important predictors are… – Field goal conversion (% of baskets made compared to shots) – Average 3-point conversion of opposing team • Field goal conversion 3 times greater variance than 3-point conversion of other team • Suggests offense more important than defense • Every 1% increase in field goal conversion provides a 7.9% increase in winning %
  11. 11. What is the average life of a baseball in Major League Baseball?
  12. 12. What is the average life of a baseball in Major League Baseball? – Average is 6 pitches – On average 60-70 balls are used in a game – Home team has to have 90 new baseballs on hand – Average of 12 hockey pucks are used in an NHL game – Source: Wiki.answers.com
  13. 13. Key Metrics MLB Baseball? • Pitching most important • Starting pitcher’s “Earned Run Average” (ERA) best predictor • Second most important is starting pitcher’s WHIP (Walks and Hits per Inning Pitched)
  14. 14. What Do We Know?
  15. 15. What Do We Know? Teams Score Runners on Base Channel (Branding) Home Team Pitch Count Outs Inning Game
  16. 16. Therefore, What? Teams Score Runners on Base Channel (Branding) Home Team Pitch Count Outs Inning Game
  17. 17. Applying Sports Scoreboards to Our Companies Scoreboards Become More Valuable Over Time Familiarity over time leads to quick understanding of results; what would a sporting event be like without a Scoreboard? For leaders and executives, they bring clarity and peace of mind. What Should Be Measured? Can be subtle; at times even unobvious; what are the key metrics; profit per X. Defining an Opponent While our companies are facing competitors we cannot always measure directly against those direct competitors; so our competition becomes our…goal, forecast, budget, results from last month, last week, same month prior year, etc; assist the executive team in understanding the game. Predictors of Success Did we win or lose today? This Week? This Month? This Year? Therefore, What? Purpose of the Scoreboards is to lead to good decision making; strategy; quick identification of negative trends and confirmation of previous strategic decisions.
  18. 18. Building Your Company’s Scoreboards Using graphics and current technologies to tell the story. Determining the Metrics on Your Scoreboards Guidelines for determining your Company’s metrics. Scoreboards for the Entire Team Not just for the executive team. Every group in the enterprise can benefit.
  19. 19. Building Your Company’s Scoreboards Traditional Financial Package Excel Based Reports Imported to Acrobat Pro and Marked Up Charts from Excel
  20. 20. Building Your Company’s Scoreboards
  21. 21. Building Your Company’s Scoreboards Example of Cloud Based Scoreboards Trends, sorting, creative charting Power in speedometers, stoplights and other chart options Customize targets, ranges and min/max options
  22. 22. Building Your Company’s Scoreboards Features and Flexibility From simple to complex Interactive Pivot capabilities Graphics vs spreadsheets Identifying the critical issues quickly
  23. 23. Building Your Company’s Scoreboards Online Scoreboards Interactive Quick Identification of Trends, Key Metrics, Ratios Accessible from Any Location with Internet Access *** Significantly Reduces Preparation Time Prior to Meetings *** Quickly Keys on Most Important Results
  24. 24. Pitney Bowes Good to Great Profit per Customer By Jim Collins Wells Fargo Profit per Employee Walgreen’s Profit per Customer Visit profit per “X” What you are deeply passionate about What you can be best in the world at What drives your economic engine Kroger Profit per Local Population Nucor Steel Profit per Ton of Finished Steel
  25. 25. Good to Great By Jim Collins “The denominator can be quite subtle, sometimes even unobvious. The key is to use the question of the denominator to gain understanding and insight into your economic model.” “The denominator question serves as a mechanism to force deeper understanding of the key drivers in your economic engine. As the denominator question emerged from the research, we tested the question on a number of executive teams. We found that the question always stimulated intense dialogue and debate. Furthermore, even in cases where the team failed (or refused) to identify a single denominator, the challenge of the question drove them to deeper insight. And that is, after all, the point—to have a denominator not for the sake of having a denominator, but for the sake of gaining insight that ultimately leads to more robust and sustainable economics.”
  26. 26. Determining Your Metrics Monthly Indicators Weekly Indicators Daily Indicators 5 Year Forecast Annual Forecast Quarterly Forecast
  27. 27. Determining Your Metrics Monthly Indicators Profit and Loss Balance Sheet Statement of Cash Flows Industry Comparisons Key Performance and Health Ratios Weekly Indicators Metrics for Each Department, Discipline or Team 1 to 3 of the Most Critical Metrics Condensed or Simplified Version of a Balanced Scorecard Daily Indicators The 1 to 3 Key Drivers of the Company’s Economic Engine
  28. 28. Determining Your Metrics Quarterly Forecast 13-Week Rolling Forecast of Cash Flows Identifies and Manages the Peaks and Valleys of Cash Flow Annual Forecast Compares Actual Results to the Company’s Forecast, Budget or Plan Analyzes Performance Month by Month Focus on Analyzing Variances 5 Year Forecast Financial Model or Projection of the Core Financial Statements Assumptions of the Company’s Growth Strategy Planned Acquisitions, Divestitures, New Product Launches, Pricing Strategies
  29. 29. THE RESOURCE FOR CORPORATE FINANCE, ACCOUNTING & TREASURY PROFESSIONALS
  30. 30. Scoreboards Provide Part of the Translation Learn through trial and error how the members of your team learn and understand. Getting your scoreboards right is an ongoing process. Let Team Members Discover Therefore, What? Report Cards. Who in the Enterprise Should be Included? Division or team leaders, on the line, in the field; who has influence on key performance indicators? Who Outside the Enterprise Could Benefit? Improved communication with bankers, vendors and other partners.
  31. 31. Just Get Started Let go of the idea the process must be perfect. Engage in dialogue at the executive level. Begin on the back of a napkin if that is what you have. Flexibility in Technology and Metrics Your first attempt is the rough draft. Do not invest in technology that has to be executed perfectly the first time. Your Scoreboards and the metrics you track WILL change. Accept Everyone Understands in His or Her Own Way Be patient with your team. Continue to try new methods until each member of the team has his or her A-Ha moment. Scoreboards Must be Accessible Physically and Intellectually Make it easy to access the Scoreboards. The more—clicks, files that need to be opened, steps, etc—required the less likely your team is to review the Scoreboards often. Design should make metrics readily available.
  32. 32. Dashboard Projects Led by IT Easy to turn over to the IT department. The most critical factor is what we are tracking and those decisions must be made by the executive team with finance and accounting leading the effort. Allowing Design to Get in the Way Never build a chart or graphic that is simply on the Scoreboard because it is “cool”. Every measurement must on the Scoreboard must have a purpose and be aligned with the Company’s overall goals. Viewing Scoreboard as Tools for Management Only Most team members want to know they are contributing to the success of the Company. Look for influencers. Bad Data This is the one area that has to be done right the first time. Regardless of what you track, the data must be accurate!
  33. 33. Please join us at www.proformative.com to ask any additional questions you may have and to continue this conversation with your peers and the experts you heard from today. If you have questions about CPE Credit please contact cpe@proformative.com
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