Should our leadership Scorecard targets be fixed single numbers or should we use acceptable performance ranges with minimum and maximum thresholds?

Question

Tyler Smith · Accepted Answer

In the Entrepreneurial Operating System, weekly Scorecard targets must be clear and binary. A number is either at or above target, or it is below target. It is green or it is red.

Introducing acceptable performance ranges, three-tier color coding, or yellow warning zones destroys accountability. The moment you tell a leadership team that a target is 20 new discovery calls but an acceptable range is 15 to 25, the real target becomes 15. Human nature will always gravitate toward the lowest acceptable number. Yellow creates an emotional middle ground where leaders spend meeting time debating whether a number was close enough instead of confronting operational reality.

If your target is a floor, make that floor the published target:
- If you require at least 15 qualified meetings each week, the target is 15. Hitting 14 is red. It drops to the Issues List.
- If you want an operational metric to stay below a certain limit, such as past-due accounts receivable over 60 days, set the ceiling as the target. The target is less than 20,000 dollars. Hitting 21,000 dollars is red.

Red does not mean someone is getting fired. Red simply means the measurable needs attention. Dropping a red number down to the Issues List in your Level 10 Meeting allows the leadership team to evaluate whether the miss is a temporary blip or a systemic flaw that requires IDS. Keep the standard absolute to eliminate debate.