Almost every successful executive, manager and supervisor uses dashboards to track strategy, operations and tactics. These leaders are using dashboards to keep their strategies and operations on track and detect hot spots or areas of concern within the organization.
The use of dashboards by management has increased considerably over the past years because managers have realized that these tools give them the big picture about the business, puts them in real-time touch with the business and ultimately help them gain better insights and make better decisions.
Recent developments in business intelligence and real-time analytic tools that offer not only descriptive and predictive analysis help but also prescriptive analysis assistance has also led to the increased adoption use of executive and operational dashboards.
Once regarded as a cost, IT is now viewed as an enabler of strategic and operational goals and objectives achievement.
There is still prevalent use of MS Excel dashboards within some other big corporations and this is a big concern.
Spread sheets are error-prone and disconnected from the rest of the organization because they are developed and maintained functionally hence limited or “none-at-all” central view of organizational performance.
However, in developing dashboards, executives, managers and other supervisors should know that in order for dashboards to succeed in driving performance improvement within the business:
- They must be based on the causal links that drive success for organizational objectives
- Communicate the desired behaviour in the organization
- Increase the speed, ease and accuracy of decision-making
- Alert decision-makers to take action; and
- Use real-time reliable data that enables timely decisions to be made and keep objectives on track.
Today, organizations must be weary of the Velocity, Variety and Volume of data at their disposal.
They must be able to separate the “disinfected” from the “infected” and use that clean data to generate informed dashboard insights.
If the management team misuses dashboard tools, then they will fail to serve the purpose for which they are initially developed for.
Some leaders have failed to benefit from the use of dashboards because they have wrongly used them to micro-manage subordinates.
It is therefore imperative and important that as managers, when you develop and cascade your scorecards and dashboards from the top to the bottom of the organization, ensure that everyone at each and every level of the organization clearly understands what it is that the organization is trying to achieve.
If you are to obtain the subordinate’s full buy-in of adopting best practices and fine-tuning of strategies and business models, it is also important that you avoid using scorecards and dashboards as routine grading systems of individual performance.
Successful development of executive and operational dashboards requires the person or team tasked with the process to fully know and understand the difference between scorecards and dashboards.
Most people use the terms “dashboard” and “scorecard” interchangeably as if there is no difference, but there is a difference between the two.
Scorecards, for example the Balanced Scorecard, are used at the executive level to monitor strategic alignment and success with strategic objectives and give an executive-level view into operational or functional performance.
On the other hand, dashboards are used at the tactical and operational level to monitor the progress or success of tactical initiatives and operational performance on a weekly, daily or even hourly basis.
Dashboards are more detailed whereas scorecards are a summarized version of dashboards.
In order to be successful at developing operational dashboards for your organization, the following approach is very important.
- Start small and make some baby steps towards the successful roll out of your dashboard implementation project. Remember, “Rome was not built in a single day”. You need to first identify and define few manageable problems that have high chances of success and clear visible effects. Once the concept has proven successful and generated interest across the organization, you can then roll out other dashboard projects.
- The business manager, not IT, should own the dashboard and lead the project, with IT as the enabler. You need to understand your needs first, generate buy-in from other groups and then work with IT to create an integrated strategy.
- Develop a model of your business processes and understand the drivers. This will help you select measures that are aligned with corporate strategy and operational objectives and because of the alignment, you will be able to experience greater impact and visibility.
- Your dashboard should only show the “critical few” metrics or KPIs. Having too many metrics will make it very difficult or sometimes impossible for you to know and understand what drives performance improvement or success. It can also be implied that you are measuring wrong things instead of focusing on the critical success factors.
- Develop a time frame or timetable for the dashboard roll out process. This is important because the quicker you develop a working system, the lesser the chances of people losing momentum and interest.
- Since dashboards are used to indicate performance, some people will view them as means to punishment if they fail to achieve the hoped-for results. As a result, you must develop a strong culture of performance that understands that dashboards are just tools to help the organization learn, improve and grow.
In summary, whether operational or tactical, dashboards are important if good managers are to stay on top of their businesses. Both scorecards and dashboards are the lever that changes culture in the organization.