With information coming at us from every direction, it’s difficult to digest it all and use it to grow our businesses. As the facilitator of several industry peer groups, I’ve noticed the same topic comes up repeatedly at our meetings: how to develop the most useful dashboard to run our companies.
A dashboard organizes key business statistics into a summary report for leadership to assess the results of their efforts. It can be as simple as a spreadsheet that contains certain key performance indicators (KPIs) or it can be an elaborate report that contains charts, graphs and variance analysis. But the bottom line is that it’s created to get a snapshot of the company’s status in all functional areas. If your organization has multiple managers, you may want to develop multiple dashboards to guide them in overseeing their areas.
It’s difficult to create an all-encompassing report because the information comes from many different places, such as operational software and financial software. While programs exist to help consolidate this data, the user first must define exactly which KPIs are required before the dashboard design can begin.
Getting started
So how do we go about designing a useful dashboard? The most useful and succinct dashboard I’ve seen is a baseball box score. A baseball box score gives information at a team level, giving the score inning by inning. In addition, it gives statistics on each player such as at bats, hits and errors committed. All this data appear in a neat little box so any reader can understand who won and how they won.
Using the baseball parallel, think of the team statistics, such as inning-by-inning score, as your financial information. Think of the individual player statistics as your operational information. If you’re executing operationally and from a marketing perspective, then the financial indicators should fall into place. It’s nice to have all these items in one dashboard so the user can draw relationships, like how an increase in production or revenue per employee affects profitability or how a reduction in sales lead cost will boost profitability.
So how do we design a dashboard that’s simple to look at but powerful in terms of giving us information to grow our business?
When designing a dashboard, consider the following:
- Make it appropriate for its purpose. Only include information that will help the person it’s intended for make better decisions. For example, if you’re creating a dashboard for your operations manager, he’ll want to see route values, route efficiency, revenue per technician, as well as items like number of customers served and retreatments. He may not be as interested in liquidity ratios or other balance sheet relationships. Save these for your CFO.
- Ensure the data points are easily measured and comparable to prior and future periods. Consistency is key. For example, many companies struggle with their definitions of retention (i.e. first-year retention or how long customers must be on the books before they’re counted as customers). If your management is constantly tweaking the definition, the dashboard statistic will not be as meaningful period to period.
- Keep related data points together. Look at the dashboard as a storyboard that guides the reader through several KPIs that allow him to draw conclusions about the business and therefore make better decisions.
- Make it easy on the eyes. While they may look cool, too many colors and graphs could take away from the objective of giving the user a bird’s-eye view of the area being reported on.
Optimal dashboard design combines relevance, usability and aesthetic presentation to provide maximum value to its users. If designed properly and disseminated timely, dashboard reports can help management define what information is important and educate the team on priorities by putting the statistics in front of them. In addition, dashboards are important tools for setting realistic goals for individuals and promoting specific action to achieve those goals.
