I was recently asked about dashboards and where one should begin when the boss comes in and says I want a dashboard. I thought about this for a short while and decided what I needed to do was step back and look at the dashboard concept and explain my understanding in simple terms. I share those thoughts here and invite your comments.
Dashboards are unique to an organization and what works in one place will not be suitable in another. But of course, it all depends on your definition of a dashboard. The one that I like and the one that keeps me out of mischief is this one:
A dashboard or dash board is a panel located under the windscreen containing indicators and dials such as the tachometer / speedometer and odometer.
I bet you never thought it was so easy.
Seriously, look again at this definition and you will see the foundations of business dashboards. It is not the dials such as the tachometer, odometer and fuel gauge that are important. It is atually not the numbers either.
What is really important is the meaning or significance (aka KPI) that we apply to these numbers. Thus, depending upon the situation, a speed of 100 mph might be considered excessive, particularly if being chased by an irate police officer down a busy city street. Do the same thing on a race track and you might be considered a menace for going too slow. But do 100 mph on an autobahn in Germany and no-one will bat an eyelid because it is perfectly acceptable. You can see that the gauge, in this case the speedometer, and the reading from the gauge, 100 mph, are by themself meaningless as a KPI. It is only when you apply the criteria which states that 100 mph must be highlighted in red because it is excessive that a real KPI is born.
The concept of dashboards in automobiles and in business are the same - they give us a snapshot of critical information at a moment in time. If you do happen to be running out of petrol the dashboard will start the indicator to bring this fact to your attention. It does this by turning on a light or sounding a bell when a certain low point in the petrol tank is reached.
Similarly, a business dashboard needs to provide all of the critical information that is needed to run an organization's daily operations. It will be a snapshot in time, probably midnight, that tells an organization if it is spending cash too fast; or whether the percentage of patients who needed a repeat visit is higher than 5%; or whether the number of requests for service this week exceeded the number from last week by more than 10%. You will notice that the common factor here is the rule being applied to the data to indicate that something needs to be brought to the organization's attention.
In a business, you can imagine that every employee has a steering wheel and an accelerator pedal. However, it is not necessary that everyone gets a full-blown dashboard. Since the user roles are different they do not need the same level and kind of information. The worker bees need to work and the managers need to manage. Typically only the higher executives will get the full dashboard priviliges. They want to manage by exception and will only become really interested when something out of the ordinary happens.
If an organization is truly managing by exception then it will have a goal to move routine work from the manager to the employee, this leaving the manager more time to manage. By creating a dashboard that displays the KPIs that the manager is interested in, a quick glance to see that all is green is all that is needed. Good KPIs, and thus good dashboards, reduce micromanagement which is good for everyone involved.
Thus, this is where you ought to begin. You need to find snapshot metrics that when compared to against a set of criteria will have a value above, equal to or below the criteria. Since the manager has access to the dashboard he or she can tell at a glance if the company is running out of petrol, or whether the dashboard can be closed for another day and he or she can get back to running the company.
Now that reminds me, golf anyone!
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