Are You Measuring What Matters?
Running a business today in the global economy has become more complex and competitive. We find that because of this increasingly challenging environment, running the day-to-day business can become overwhelming. In our experience, actively managing your strategy is a first step to clarify and focus decision making, and make the complex more manageable.
A critical part of our strategy management process is having timely and accurate information to guide decisions and make course correction to the strategy in real time. As part of our work with client strategy teams, we assist in designing dashboards that measure and monitor progress against the long term strategic objective. A dashboard is a visual presentation of KPIs (Key Performance Indicators), most often presented in graphs, that are critical to the long term success of the strategy. Like an instrument panel of an airplane, the dashboard data should provide management easy to read and understand information about trending issues or opportunities as they journey towards the achievement of the strategy’s objectives.
Research studies have shown that dashboards are valuable because the human brain can more easily understand them, whereas Excel spreadsheets and tables filled with numbers take longer to digest and comprehend. Therefore, a dashboard is a simple and effective way to communicate the strategy to the overall organization.
Keep in mind that creating a strategy dashboard should be an iterative process. Don’t expect all your metric and design choices to be perfect the first time, and therefore, do not spend weeks or months coming up with the perfect presentation. Instead, create your dashboard with the understanding that you will need to test and adjust the presentation and the data multiple times. Remember that creating and using an effective dashboard is an organizational capability that is learned over time.
A recent article entitled “Dashboard Design” by Renita Wolf published on LinkedIn caught my attention. Ms. Wolf had these great dashboard quick tips to keep in mind:
- Strategically, focus on high level information that tracks progress toward the achievement of strategy’s objectives. Separate operational metrics from strategic KPIs. Strategic KPIs are high level long term targets. Operational metrics address the annual plan targets.
- Sketch your graphs on paper before you finalize them. Play with different graphical representations until you find one that is simple, clean and delivers on the message.
- Put the numbers in context…don’t make your audience have to dig out previous reports to understand the message of the graph. And don’t make the graphs too complicated. Stick to three or fewer variables per graph.
- Limit your dashboard to fit on one page. Too much data will obscure the story and make it more difficult to communicate. There can always be additional graphs that the strategy team can prepare to drill down for more information if needed. Remember, less is more…if it isn’t relevant, don’t include it on the page.
Tracking progress against the strategy’s objectives is a critical part of the strategy management process. It can help communicate the strategic story to the organization, and provides the strategy steering committee a vehicle to make better decisions faster. Do you have a dashboard for your company? We’d like to hear how your dashboard has helped you improve performance and achieve your long term strategic objectives.