No matter how good your executive dashboard looks, the content should always take precedence. In what is a question of substance over style , choosing the perfect metrics is a critical stage in the design process.
An executive dashboard can be one of the most important components of your business intelligence operations. According to Ellis Booker, ‘These powerful tools are now getting into the hands of regular business people, those without advanced degrees in mathematics, statistics or computer programming’.
This increase in usage means that selecting the right data metrics has become more crucial than ever.
The definition of the ‘perfect metric’ is largely subjective and can depend entirely on the specific requirements of an individual business. Yet, it can be beneficial to have a solid framework in place which defines some of the key attributes that a successful metric should have.
This framework can then be used to ascertain the metrics that will add the most value to your executive dashboard.
The five main things that a metric should be are Actionable, Transparent, Accessible, Recognisable and Timely
Gareth Morgan argues that ‘Dashboards are supposed to encourage their users to take actions that will help improve business performance’.
An executive dashboard metric can be considered actionable when there is a specific and repeatable action that can be linked to the observed data.
The value of a metric can be greatly diminished if it simply presents the data without giving any real insight into what steps should be taken as a consequence of the findings.
The opposite of actionable metrics are commonly referred to as ‘vanity metrics’ – they display the current trends in data but leave little indication as to the way forward.
It would be useless to present a metric on an executive dashboard if the user does not possess a clear indication as to the source and the significance of the information.
Transparency is a key factor when it comes to an executive dashboard because the user can often be overwhelmed by the mass of data on display – without having any real appreciation of what it is doing there.
To improve this understanding it is important that the metrics involve relatively simple calculations, making it easier for users to follow no matter what their level of experience. Complex algorithms can often overcomplicate the results and leave users confused.
This defeats the whole purpose of the executive dashboard as a tool that provides a simplified overview of the key performance indicators.
It is crucial that the metrics on an executive dashboard involve data that is easily accessible and simple to maintain. The difficulty involved in collating data can often have a detrimental effect on how frequently it can be updated – and hence how relevant the information is.
Therefore to gain the most value from this data, it is essential that the collection process is as fast and effective as possible.
In order to ensure this accessibility, it may be necessary to make slight alterations to the metrics you wish to present. There is little point in presenting a perfect metric if the data quality itself is of a poor standard.
The effectiveness of a metric on an executive dashboard can be considerably diminished if there is even a degree of ambiguity about what it actually means. If the definition of a specific metric is largely subjective or difficult to understand, then this will compromise the consistency with which it is interpreted.
It is therefore vital to ensure that there is a clear and distinct understanding of what every metric means. Make sure that this is consistent throughout the whole of the executive dashboard.
In a recent article Steve Wellen uses the example of the retail industry to highlight how important it is that an executive dashboard contains accurate and timely data.
He argues that ‘data changes constantly, and you can’t afford to act on data that no longer represents the current state of your business’.
With this in mind it is crucial that you choose metrics which can easily be kept up to date and provide a relevant insight into business performance at that moment in time. The frequency with which data is updated on the dashboard itself can also have a significant impact on how timely these metrics are.
Follow this simple structure and drawing on the five factors included can help you to ensure your metrics are of the highest possible quality. This will help you to gain the most value from the limited space available and optimise the efficiency of your executive dashboard.
If you’re interested in knowing more about how executive dashboards could benefit your business, download our eBook below.