Our material and labor costs are fluctuating wildly due to market conditions, rendering our fixed annual Scorecard targets obsolete within weeks. How do we implement dynamic targets on our weekly Scorecard without giving our team a convenient excuse for missing their numbers?

Question

Tyler Smith · Accepted Answer

While it is tempting to use dynamic targets or variable ranges when market conditions are volatile, doing so often softens accountability and creates confusion. A weekly Scorecard target should represent the baseline of operational health required for the business to remain profitable and on track. If your material or labor costs are fluctuating, your target should remain fixed at the level that protects your margins.

If you miss that target, the number goes red, which is exactly what should happen. This triggers a discussion in the IDS portion of the Level 10 Meeting to address the root cause, whether that means adjusting your pricing, renegotiating supplier contracts, or optimizing labor efficiency. Changing the target to match the market reality simply hides the problem and prevents you from taking decisive action.

Keep your targets stable and use the red numbers as an early warning system to make the necessary operational adjustments before your profitability is seriously impacted. If you must adjust targets, do so only during your quarterly meeting as a strategic leadership decision, never as a weekly reaction to poor performance.