Business Owners and Senior Management should be constantly monitoring the performance of their business. Some managers may accomplish this by talking to the people who work for them. Ultimately, however, management is called upon to make decisions, and they do so with the information they have available to them. Often the biggest challenge is bringing all of the data together into something which can be understood.
Most business leaders want to base their decisions upon clear, reliable information. But, this can be a challenge. Information can be difficult to obtain in a timely manner. The accuracy of the data contained in reports is sometimes questionable. Management reports may be extremely detailed without providing critical metrics which are easy to locate. So what do you do?
If you are a manager with some of these issues, I would urge you to clear your head for a moment and go for a spin in your car. That’s right – turn on the ignition, be careful in the parking lot, put on your favorite music and go for a 30 minute drive. While you are there, take a moment to appreciate the amazing information solution right in front of you – your car dashboard.
A car dashboard exhibits three powerful concepts.
Consolidation– my dashboard prominently shows me my speed, my engine temperature, the gasoline remaining in my tank, among other things. Where does this information come from? Generally, I know – but not specifically, and frankly, I’m not that interested. But to answer the question, the data feeding the three dials I mention above each comes from three distinct components, undoubtedly manufactured by three separate vendors. Can you imagine if your car started behaving the way most IT departments do? “I’m sorry, but we can’t tell you how much gas you have left, because that information is in a different system.” I know what I would do. I’d get a new car.
Context – I’m not an auto mechanic. I have no idea what the correct oil pressure should be in my car, or at what temperature my engine overheats. Fortunately, my dashboard is color coded. When the dial goes Red, that is bad. I need to take corrective action to move the dial out of the Red, into the Yellow or Green.
Relevance – for some pieces of information, any kind of numeric measurement is not useful. I simply want to know if I should be concerned or take action. For example, the alert that tells me that I don’t have my seatbelt on (and the car is moving). Or the one that tells me that I need to check my engine. Fortunately, the dashboard does not provide me with a diagnostic code – because I would not know how to interpret it. But I do know how to respond to a Check Engine light.
Operating a business is not very different from operating an automobile. In both cases, you are working with a sophisticated, complex system which has a lot of moving parts. Further, you need to keep your eyes on the road in front of you. Driving or operating your vehicle is not the time to be looking for information, and getting that information can mean having to take your car out of service, costing money.
Unlike automobiles, it’s up to you as the manager of the business to decide which metrics are Key Performance Indicators – the ones you need to keep your eye on to ensure optimal performance. Therefore, recognize that you will need to address your organizational readiness to begin monitoring your business in the same manner.
- Define your strategy – have a clear understanding of what the critical metrics are, and remove data and information which is not important to monitor.
- Embrace Data Driven Decision making – organizations which have committed to data driven decision making take good care of their operational data, attending to data quality issues as they arise.
- Keep it Actionable – Your envisioned dashboards will need right-time access to operational data – depending upon what you are looking to accomplish, you may or may not need “real-time information”. What is important is that you have information in time to make a correction, and don’t spend time and money investing on technology capabilities which your organization does not need.
- Keep it simple – You’ll need easy to use tools, both for IT and Management – and there are plenty of them available today!
By implementing a dashboard, or set of dashboards for your business, you can expect to be able to apply better focus to the critical processes that drive your business, because “What gets measured gets done”. You’ll make better decisions, and also make these good decisions in time to take impactful action. Finally, dashboards can help you communicate your strategy and performance to your management team.