What is an Effective Business “Dashboard”?
We have all become familiar with the concept of a dashboard from driving in cars where all the information we need is presented to us in a panel in front of us. In a car this will include critical data like speed and whether or not we have sufficient fuel to perhaps less critical but useful data such as the time or the outside air temperature. In fact, these car dashboards are getting ever more sophisticated with onboard computers providing all sorts of additional data that we can choose to have fed to us or available at call, allowing the journey to be safer, more efficient or just more comfortable. This dashboard concept has now very much been applied to the modern workplace with the idea being that every leader needs a convenient “panel” to be available to him or her so as to get the most from the resources under his or her control, including people. Although the analogy with a car, bus or even plane dashboard is a useful one, how far it helps us to design an effective business or organizational dashboard is a concept we’ll explore briefly in this article.
A well designed business dashboard can provide a very effective way of presenting what might be an almost overwhelming amount of data that businesses measure and disseminate every day. In other words, if it is well-assembled, a dashboard can save individuals lots of time and the wider organization wasted effort and money by making data easier to access and learn from and thereby give people the chance to make better decisions. It is therefore extremely important that the dashboard be tailored to suit the specific needs of an organization and the departments, functions and/or teams within it. In addition, it is critical that the dashboard presents information or measures of performance that are meaningful and useful to its target audience.
Before deciding on a particular dashboard in terms of design and content, we should be be fully aware of what all good dashboards seem to have in common. Just to outline a few of these, all dashboards should:
- Be simple in overall design and include no more than 10 measures (and 6-8 is ideal)
- Be appealing to the eye or have a good user interface, if rendered on computers
- Graph or chart quantitative data
- Find simple means to include important qualitative data
- Present data/information visually as much as possible.
- Provide a context for data so that people can immediately appreciate what is good/bad or indifferent performance
- Use color/highlights to highly important results or targets
- Always seeks to communicate information with clarity and simplicity
Designing the Dashboard
With the above in mind, all organizations need to think hard about what measures really matter to their performance that may be possible to include on an overall dashboard. However, these dashboards will typically include four main areas:
- Their performance with customers (in marketing, sales and customer service terms such as volume of calls, changes in market share, number of leads generated, number of complaints etc.)
- Their performance with processes (like delivery on time, responsiveness, order cycle time, quality levels etc.)
- Their performance with people (like absenteeism, turnover, morale, “bench-strength”, overtime levels etc.)
- Their performance financially (like revenues, costs, budget v actual performance, collection days etc.)
In addition to the above functionally specific metrics, a dashboard can be designed to graph or chart interesting ratio data and how it may change over time. The following are therefore popular inclusions in many organizations:
- Revenue and cost per lead
- Cost to income ratio
- Revenue or Profit per employee
- Average progressive profit per sale
- Return on capital employed etc.
The point here is to select measures for inclusion on an overall dashboard that will paint a picture of how an organization is performing in an overall or “big-picture way. This means finding measures and ratios which quickly and simply tell a story and give people insights into what may need to be changed. For this reason you will also want to have some dashboard measures which look at past performance (and how current performance relates to it) and some that focus on possible future performance. These are often called “lag” indicators (such as average revenue per salesperson) and “lead” indicators (such as numbers of outbound calls or sales pitches made). This helps to provide a more balanced picture.
One final point to make here is that many senior managers worry that an overall dashboard does not have enough information to cover the entire business or to be useful to all the teams or departments within it (which can lead to cluttered dashboards which employees can find confusing and unhelpful). The “trick” then is to keep the dashboard simple, as we said at the outset, and focused mainly on overall organizational measures which matter most. You can always create sub-dashboards for individual teams where necessary, but even here, their measures should tie directly to overall performance measures which affect the entire organization.