Indicators, objectives, balanced scorecard and history - all companies have different levels of maturity with regard to these topics. Here are four pro tips that will give you dashboards to be proud of.
1. Less is definitely more when it comes to your management dashboard
Focus on indicators that track your core strategies:
The ideal is between 5 and 9 indicators and no more, 7 being the objective. This forces you to make a selection and get to the point. You should also take care not to create a reporting dashboard and find the right balance between the four types of indicators to be tracked:
- Performance indicators: based on objectives set
- Management indicators: control of resources allocated to achieve objectives
- External indicators: whether external data influences the structure and/or markets
- Impact indicators: measure the direct and indirect effect of actions on the business environment
The primary objective is to put achievements, goals and forecasts into perspective.
2. Collective and pragmatic indicators above all
Indicators mean objectives. And when it comes to objectives, those which are too individual are to be avoided at all costs. It is much riskier to get everyone concentrating on their individual performance rather than give a group a collective performance target. Avoid internal warfare and competition by actually uniting your teams behind team indicators.
However, people can only strive for something that’s tangible and that they understand. So make sure you choose objectives (and thus indicators) that are both concrete and related to the business of the teams that are monitoring them. Some good and bad examples:
- Objectifying consultants on EBITDA is somewhat abstract, whereas days billed is much less so.
- The monitoring of the value of the average basket for a marketing team is quite natural and understandable for them.
- It’s better to ask a sales manager to monitor sales by value and by volume rather than an average conversion rate.
In short, as you will have realised, the more meaningful an indicator is, the more likely it is to be improved.
3. Limit the confusion of indicators
As with all measurements, whether physical (e.g. the temperature of a room) or of a business (e.g. CHURN), the indicator can be subject to confusion which distorts the value. Implementing a good dashboard, therefore, absolutely requires protection from such confusion.
- Data quality: you can't make a silk purse out of a sow's ear. The data required for the calculation of your indicator must be checked regularly to improve a management dashboard: reliability of sources, freshness of data, comprehensiveness, uncorrupted, etc.
- Human disturbance: an information system never invents data! There is always some kind of human intervention behind it. And where there are humans there is a risk of manipulation. Did the sales people really give me all their figures? Was the outstanding work on this project deliberately underestimated? These are all difficult but essential questions that you have to ask in order to challenge the value of your indicators.
- The context of the indicator: an indicator is always assessed in relation to a particular context or another indicator. 600% growth seems extraordinary, but if the starting point is a turnover of €1,000, it puts the figure into perspective. Therefore, make sure that indicators are put into perspective and always ask yourself the question "Am I comparing this value to a relevant benchmark?”.
4. Don't overlook the presentation of your management dashboard
It's a fact that we tend to look at what is attractive and ignore what is ugly. However, although we are all attached to the relevance of our indicators, we often forget to present them in an attractive manner.
Have you ever given your website or your company brochure a makeover? Well, you need to put the same energy into the look of your dashboard: readability, harmonious colours, attractive fonts, images, etc.
And since beauty is in the eye of the beholder and some people's choices won't please others, minimalism is your best bet - nobody will be able to tell you that a single figure written in Calibri is ugly.
The best business success stories often combine the good and the beautiful...