How would you feel if you got onto a jet flight bound for New York from Los Angeles and you poked your head into the pilot's cabin and saw nothing but a steering wheel and gas pedal? Could you imagine being a passenger on a jet without any instruments on the dashboard for the pilot to fly the plane?
Similarly, how would you feel if the CEO/President or head of your company was leading, directing and managing the company without similar guidance mechanisms? You know things like cash on hand, profit margin, number of new customers, etc.? My guess is you would feel pretty uncomfortable and uncertain about your leader's ability to take you to where you wanted to go or where s/he said you were going.
Business dashboard – Why are they so important for your business?
There's an old proverb, “What gets measured, gets managed.”
And, there are variations of this axiom. “What doesn't get measured doesn't get managed.”
“What gets measured gets done.”
Because I believe these to be true, I frequently ask others about the things that are important to them. The things that are important should get measured and managed. We call these important measurements or metrics, “key performance indicator (KPI, for short)” because the business metrics that are used to evaluate the health of an organization, department, or individual are crucial to the success of a company. So, while KPIs differ from organization to organization, they are a measurable value that demonstrates how effectively a company is achieving against its key business objectives (also known as targets).
KPIs can vary and there are many possible ones. Just ask me for my list of 560 KPIs and I will get the list to you. There are many types of KPIs. They could consist of:
- Sales Metrics KPIs
- Customer Metrics KPIs
- SEO Metrics KPIs
- Retail Metrics KPIs
- Marketing Metrics KPIs
- Social Media Metrics KPIs
- Supply Chain Metrics KPIs
- Call Center Metrics KPIs
- Help Desk Metrics KPIs
- Employee Metrics KPIs
- Financial Profitability Metrics KPIs
- Financial Turnover Metrics KPIs
- Financial Expense Metrics KPIs
- Productivity and Efficiency Metrics KPIs
- Quality Metrics KPIs
- Etc. etc.
I don't like to send my list of 560 because people get too easily overwhelmed. But, it proves my point, there are so many things that can get measured a person's head could explode! , That's why it's important to be selective, careful, and only a few. It's important that each department head track a handful of KPIs and the CEO would have his/her own handful, but would review with the team all of the department leaders' KPIs in their weekly meetings. Everyone has skin in the game.
Big or small, old or new, it doesn't matter, each company should track the same simple set of metrics. Typically, these are: number of Leads Generated, number of Leads Converted, Average Transaction Size, Revenues, and Gross Margin. Then, of course, like any pilot would prior to flight takeoff, would do all my preflight checks of the aircraft prior to takeoff. Larger companies create dashboards because graphical depictions make it easier and more fun to look at and analyze.
The CEO or President's business dashboard might look something like one of these:
And the Online Marketing Manager's dashboard might look like this:
It doesn't matter whether you have them done on Excel spreadsheets or wall charts that get colored in manually. The fact is, what matters is having them at all, making them visual, and posting them prominently where those who you want to see them have access to them. Only then will your team members be assured (or reassured) about your leadership and direction.
Having a vision about the future and growth of your company is vitally important to everyone. But so too is being able to provide guidance about how and when you should get there and what the ride will be like.