Metrics dashboards simplified- and how to make yours powerful
Have you ever been asked a fairly straightforward question by your boss, a co-worker, or a management or investor team – only to discover that you cannot give a simple answer? If you need to prepare 4-5 different reports to answer that question, then I encourage you to seriously consider the effective use of a metrics dashboard. It will make your life so much easier!
So- what exactly IS a metrics dashboard? Here’s a brief definition:
A business metrics dashboard is an integral data presentation tool that you can use to effectively combine and communicate specific and multiple pieces of information to your intended audience. Used properly, it can also transform your communications in a way that solicits action and support.
Before we go any further, though, you need to have a very clear understanding of something:
Data ≠ information.
Please do not confuse the two because they are not the same! And they’re not interchangeable.
Here’s a short definition of the two for clarification:
Raw numbers. Measurements such as time, distance, sales, profits, labor hours.
Conclusion(s) derived from analysis and interpretation of the raw data.
More on this further down the page, but for now, just remember: data ≠ information.
The goal is to turn data into information, and information into insight.
The need, not just for information, but for INSIGHTFUL information is increasing. As a result, using a metrics dashboard will arm both you and your audience with clear information and consequently, valuable insights, into your business and operation. They will put a welcome end to your reliance on less-helpful raw data and simple reports.
The usefulness of a metrics dashboard, and 4 ways it differs from a simple data report
Dashboards are an effective way to summarize larger volumes of data and reports than with simple data reports.
Dashboards are a convenient, effective way to communicate insight & action to a larger audience, even if they’re unaware of your business.
Rather than displaying numbers alone, dashboards can have pictures, graphs, and charts. They transform numbers into visual evidence of relationships and patterns.
Dashboards save time by quickly making the point to your audience. This is a requirement as your career progresses.
So, consider data as something static- a noun. That is- stationary, still, not moving.
Think of information as a verb. It is dynamic, moving, incites action. Information is invaluable!
Why is information so important to us? Besides wanting to know, we mostly want to know WHY we think we know.
For example, you’ve been asked to decide and take a position:
Should you purchase this equipment or not?
Can you increase production?
Can you decrease cost?
Should you purchase this product line?
Should you invest right now in further research & development?
Essentially, what should you base your decision on? You can assuredly make those types of decisions in greater confidence – and with greater respect by your peers – with information rather than data.
some information is better than no information. But relevant information is best!
We live in a world of information. This is different from data. Data is everywhere.
Information, however, is at a premium and information transforms data and numbers into actionable insight. People in business make decisions based on information!
Information is becoming the next commodity in my opinion. Business rules and conditions will continue to rely upon information. And decision makers will be expected to make smart, timely, relevant decisions – that’s right! – based on information.
Here are 3 critical factors that explain why businesses will continue to place a high priority on information:
The global community connects us all, resulting in a constant stream of DATA overload. Ask 10 people where they acquire data and I bet you’ll receive 10 different responses. It’s the same for businesses as well. Businesses have to be able to discern which data is relevant and useful.
Business moves at a faster pace than ever before. We face new, more, and more complex challenges. Consequently, we are required not to just have more information, but to have more specific information to make informed decisions. The person who has the relevant information (and has it right now) has the most knowledge. THAT person can make the most informed decisions.
The gap between success and failure is narrowing. Companies routinely gain competitive advantage over others based on the quality of their decisions. Decisions which by default rely on the data and resulting information used to support it. This is an example of how business metric dashboards can really help you. When employed and used effectively, they can be quite powerful – and in turn, they can help you gain that competitive edge.
So, how can you get in the game and ahead of the curve to have information (vs data alone) at hand?
Now that you have a great foundational understanding of data and information, let’s discuss the concept of metrics dashboards.
A metrics dashboard is a collection of KPIs assembled into meaningful visual information
The concept of a business metrics dashboard is this:
It is the science (some would say art) of taking vast amounts of data and transforming it into insightful, actionable information. It can be a representation of larger data sets, but summarized in a manner that your audience can quickly, accurately understand.
A metrics dashboard transforms data (the raw numbers, metrics, kpi’s) into pictures, graphs, charts, even colors. The information can come from several reports, even different types of reports. The result is that the information is viewed more quickly, and good decisions are made-almost in real time.
what does kpi stand for?
KPI stands for Key Performance Indicator. It is frequently used interchangeably with the term “metrics”. Both terms refer to numbers such as cost, quantity, volume, percentage- really any unit of measure.
Metrics Dashboard Terminology
You may also hear terms like operational metrics, operational metrics dashboard, and kpi dashboard. Although specific implications may exist in certain situations, these terms all generally refer to the same thing- a business metrics dashboard.
why are metrics dashboards so effective (and popular)?
Most people in business or management want only the high points- so a metrics dashboard gives them what they want- and fast.
The more reports you use to tell your status, position, or story, the more likely you are to lose your audience, especially if they don’t have intimate knowledge of your business.
Never ever assume that you will have the time or someone else’s time or patience to explain to them your report; you won’t!
dashboards are a powerful, effective way to communicate.
Have you ever handed someone your report and hope they interpret it as you do? What happens when they don’t? Don’t put yourself in the position of handing someone a set of reports that you need to interpret for them.
With a metrics dashboard, you can communicate about your business, project, department, or task- even when you are not in the room to explain.
You can focus on the critical few and can avoid data overload.
Your entire message will be lost or minimized if you overload your audience with unnecessary information. If someone cannot read your report, they won’t listen to your recommendation or your point of view.
People are visual
Dashboards actually allow you to communicate very complex information or data sets in a simpler, easier to interpret form. You, your message, and your brand can be succinctly and correctly communicated through the use of a metrics dashboard.
how to construct and format your business dashboard
There’s more than one right way to assemble a dashboard.
Here I describe some best practices you can use as a metrics dashboard template. Feel free to tailor them for your own use.
Ultimately, you need to be comfortable with the format of what you present.
In general, consider these 5 areas when you create your dashboard:
Keep it to 1 page. Remember, this is a summary of the most important, critical, pieces of information. 1 page will do.
consider your audience
Communicate your information assuming that the audience has no idea of your operation. Avoid acronyms, terms, and references that are not common to your audience.
Use a number (metric) only when you have to.
Use a chart or graph when you can. Avoid the overuse of color. Color all over the page makes it more difficult to perceive specific and unique points.
Define visual effectiveness in terms of how quickly your audience can understand your information.
Place the most important information in the top left quadrant of the page, followed by the top right, lower left, and lower right.
Keep in mind – don’t make your reader look for the message you want to communicate – it should be very clear to read and interpret.
tell a story
Place like information together in a way that makes the most sense and “tells a story”.
For example, don’t place a cost/unit graph far away from another cost/unit graph. By placing them close together, you allow the reader to understand data relationships better.
practical and specific uses for metrics dashboards
in repetitive work situations
Anytime you have waiting lines (queues), continuous flow, or even a batch process. For example, service environments, manufacturing, banks/tellers, fast food restaurants, call centers, manufacturing continuous line assembly.
For example, a sales pipeline, accounts sold, products sold, account renewals, etc.
Project days, cost per project, employees assigned to project, etc.
the lasting benefit of using metrics dashboards
In our busy world, succinct, brief communication is key. One might think that the more data you have, the more information you share, the better. Actually, from my experience, it is just the opposite.
Here’s a brief summary for you regarding the benefits of using a metrics dashboard for your business:
Metrics dashboards can actually be used to LEAD conversations! Essentially, you can involve yourself and your teams in not just more conversations, but more important conversations.
Using dashboards, you can actually expand the different types of information or go deeper within a similar set of data quicker and more effectively.
Using a metrics dashboard removes communication barriers– especially those with people unfamiliar with your business. This allows you to extend your audience!
As you advance in your sophistication and use of dashboards, you can update them frequently and allow yourself to make more meaningful decisions almost in real time. That’s a real advantage in today’s business world!
Metrics dashboards are a very powerful, truly effective way to communicate value and message. They have practical applications in almost any business situation and with any audience.
These dashboards, when developed thoughtfully, will quickly articulate a brief, poignant message in a more sophisticated, and respected way than any phone book full of reports that you can provide.
If you haven’t been accustomed to using metrics dashboards, give them a chance. I am confident that your increased use of them will increase your ability to communicate your message to your team and to your senior leaders or stakeholders.
Best of luck, and let me know in the comments if you have questions or stories!