Performance Dashboards: What to Measure

Dashboards can have many different uses.  The specific departments or users of the data will determine what is included on the dashboard.  For example, a corporate accounting department would have a vastly different dashboard than a manufacturing unit.  While the accounting department would measure things like length of monthly closing, the accounts payable cycle or days sales outstanding, the manufacturing unit might measure operating efficiency, labor hours per pound of production and lost time to injuries.

In the same way that different groups within a large corporate setting will have vastly different dashboards, a small business will likely have a much different dashboard than a large public corporation.  And in fact, the dashboard of one small business will be different than the dashboard of another.

A dashboard is nothing more than a tool for improving performance.  As such, it must be created to monitor the most important measures of your individual company performance.  It is also important to remember that a business owner can only keep his or her eyes on a limited number of measures.  Careful deliberation on the keys to success of your business should be the items that populate your dashboard.

Another important consideration is the use of comparative analysis to artificial measures like budgets and quotas.  While a department or even an individual dashboard might contain comparative measures to quotas or budgets, a company-wide comparison to an artificial yardstick is usually not advisable.  Remember, a corporate performance dashboard should identify and measure the keys to business success.  Is comparison to a budget or quota really a key to your business success?  If the yardstick has been put in place by your primary lender and is a determining factor in the renewal of your credit line, then maybe it is.  If it’s a self-imposed yardstick, you should be careful of using valuable real estate on your dashboard with such a measure.

Copying the dashboard of another company will be no more effective at managing your business than using their financial statements to run your company.  Having said that, there are general categories that all small business owners should consider when compiling a dashboard; cash flow and profitability, operational efficiency, and sales and customer satisfaction. We’ll talk about each of these categories individually over the next several posts.


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How Fast Are We Going, Anyway?

Now that you’re actively collecting data and making measurements and attempting to improve your business, how do you go about reporting your progress? This is one of the most difficult decisions that business owners and manager have to make. What do we report, how should it look, how often should we update, and who’s going to do all this updating in the first place?

First, start with the most important measures for the unit being measured. That is, if you’re measuring your customer service department, then decide what are the few important measures on which we should concentrate for that department. If you’re preparing a reporting mechanism for the board of directors, then you’re going to look at the whole company.

You can only concentrate on a handful of measures at one time, so pick the three to six most important ones for the area in which you’re working and go from there. As you make improvements to one area, you can substitute another area that has become a bigger problem. As you get better at working with these data points and trends, you can add more measures.

One way to display the information is in the form of a dashboard. Just like in a vehicle, you have a dashboard with the few important data points that you need to successfully “manage” your transportation system. You don’t want to get a ticket for speeding, so you have a speedometer. You don’t want to run out of gas, so you have a gas gage. There are other gages on your dashboard showing the status of various systems in your vehicle. Some are gages, some only tell you when you have a problem, like the check engine light. And unless you’re Penny, when that light comes on, you need to check your engine. If the light is off, you can assume you’re engine is operating fine. Together, these different measurement systems indicate the status of your transportation system. And the real beauty of a dashboard is you can see it and understand the status of your system in just a glimpse. Similarly, your company dashboard needs to be arranged to use different types of gages so that it’s logical and displays the whole system status quickly.

Here’s an example of a corporate dashboard from computer networking company F1 Solutions, here in Huntsville. F1 ownership and management decided what was really important to measure and set their tech staff at programming the measures into an automatically updating system that displays their performance relating to response times and customer service.

Unless you’ve got a talented tech staff, you probably won’t be able to create a fancy dashboard like F1. You don’t need to either. For a bunch of tech guys, this is a problem that needed to be solved. You probably don’t have resources like this available at your company. What you need to figure out is how to display the information in a meaningful way that allows you to properly manage your systems with the least amount updating.

If you need help with your measurement systems, give us a call.

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Metrics, Measures and Men

There’s a saying in quality circles, “what get’s measured, improves”.  Do you measure performance at your company? I’m actually a big believer in this idea that you can’t improve what you don’t measure. “Metrics” is one of the key buzzwords these days and is thrown around by all sorts of people. Metrics is just a fancy way of saying measure.

Measuring isn’t quite as simple as that though, is it? What do you measure? What about issues which are tough to put numbers on? “We have a great measurement system, but we don’t really use it because it takes two days just to figure out the current measurement.”

First, every business is different. What we measure at my business will be different than what we need to measure at your business. Why is that? Well, for starters, I’m different than you. My business is different than yours. What I’m most interested in seeing improved will be different that what you’d like to see improved. The goals and plans at my business are not the same as at your business.

“You mean we don’t all measure the same thing?”

No.  What you should measure in your business is based on your own goals and plans. What you measure at the corporate Board of Directors level will be different than what you measure in your regional sales office, on the manufacturing floor, or in the human resources department.

“Wow, this is getting really complicated.”

No, actually, it’s quite simple to determine the issues to be measured. Drilling down to the root cause to collect the proper data for measurement can sometimes be a bear. But, identifying the major issues to be measured is actually quite simple. What do you want to see improved? What are your big performance issues? What do your customers/owners/managers/auditors/partners/vendors complain about? The real issue is getting your employees to change their behavior so that you can collect meaningful data to improve your systems and performance.

“What does this have to do with my employee’s behavior?”

Everything. Most times, data collection means that employees have to “tattle” on themselves. So the pressure is on you to create an atmosphere without fear, where employees can work on your business without fear of being fired. THAT, is where measuring is difficult. It’s not the measuring, per se, is hard. It’s changing employee behavior that’s really difficult.

We’ll keep talking about measuring for performance improvement. Next time I’ll show you a local company with an awesome dashboard and how they use it to improve their business.


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How to hinder your success.

I was talking to a buddy of mine the other day about cell phone minutes. His company, in an effort to reduce expenses from the sales force, has placed a limit on the amount of cell phone minutes the sales force can use each month. As I sit an contemplate the sentence I just typed, I'm still stunned. How do you fake outrage when your real outrage is overpowering it? 


Look, It's their company, not mine. If they want to count pennies while the dollars flow down the drain, that's their business. But this is 2012, not 2002 or even 1992. Cell minutes are cheap, especially with a company plan. Telling your sales staff not to use too many minutes shows that the manager must be an idiot. That's a program that's more about controlling behavior than reducing expenses. And what more, it will likely reduce sales right along with the minutes.


So when you're running low on minutes, what should a sales rep do, look for a pay phone? Do they even have pay phones anymore? If they do would you want to put one of those next to your face?


I'm beginning a series of posts about the nutty things business owners do to hinder their own success. Do you have a story or idea? If so, send it to me. If you're a decent writer (meaning you can put a coherent thought together with actual words) and you want some fame and glory (ha!), I'll publish your story here on my blog. If you'd rather just send me your ideas about how to crash a business, I'll take those too. 


I'll be posting this intro to the series on LinkedIn in the group Linked Across The Valley in a discussion thread of the same title and on The Huntsville Grapevine in my forum area. Feel free to engage in any of these areas.   


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There’s An App for That

Last week I wrote about the Square credit card reader and smart phone app for taking credit card payments from customers. It’s a great little device and smart phone app that makes taking payments not only quick and easy, but also inexpensive. There are other clever and useful apps on the market, however, that combination is not usually present at the same time.

I have been thinking about small business problems that could be solved with a simple app like the Square credit card reader. What sort of problem or need can you imagine that a simple smart phone app would solve?

Share your ideas in the comments or send me an email. Maybe we can brainstorm a solution to a common small business problem.

Technology I Can Use

I received my Square card reader in the mail last week. It’s a small (1” X 1” X ½”) white plastic credit card reader that connects to my smart phone via an earphone jack. There’s an app for the various smart phone types. You set up an account with the company including your banking information and then just enter the amount and swipe the card. The cash is in your account tomorrow with a small processing fee taken out. Other companies like Intuit and PayPal either have a similar device and app or have one on the way.

Many of the smart phone apps available on the market today are games or have really limited usefulness. They’re scaled down versions of the real website functionality without the usefulness than made the site interesting in the first place. I guess that’s natural in most situations due to the size of the screen and limitations of the small keyboard.

This app isn’t like most out there. It was designed for the phone in the first place. It’s exceptionally easy to use. You have the ability to charge your customer for products and services in a paperless environment, on the go. You don’t need “cash registers” anymore. Whether those are in the form of a personal computer or an actual dedicated POS device, this application can make that clunky box a thing of the past.

If you have sophisticated inventory management and hundreds of items being checked out, like at a grocery store, this might not be a good app for you. But I typically am receiving payment for a book or a few books or consulting services, and this works great for me. The phone has the ability to read bar codes, so it can’t be far in the future before a simple smart phone will replace the cash register completely.


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Creativity…Gone Amuck!

Companies and individuals spend a good bit of time and money to be creative. That creativity is expressed in everything from interesting logos to the entire corporate culture. Some companies like the design firm IDEO, are known for their creative cultures that allow employees to express themselves to benefit their clients. They create products and services for clients that solve problems for customers. Always, the customer’s pain is at the center of the creative process.  This helps the folks at IDEO generate very creative ideas that support the client’s brand and solve problems.

Some local companies try to do the same thing. The group I practice with, the Ad4! Group, takes these same concepts and principles to solve problems for our customers, but always with the customer’s brand and pain at the heart of the process. That allows us to be creative without giving the customer a solution with which they are not comfortable or portrays them in an unfavorable light. This kind of creativity almost always leads to happy customers.

Sometimes, however, ad agencies or in-house marketing personnel lose focus on the customer and get creative just for the sake of being creative. Today, I received in the mail, a 6” X 9” hand-addressed manila envelope. The envelope had my name and company and address as well as the sender’s address, but no name or company listed. The envelope had a stamp, not postage machine affixed postage. So far so good. They got me to open the envelope.

Inside was a 6” X 9” card with a web URL, and an instamatic photograph. You know, kind you take in a pop-open camera and pull the cover sheet off to expose the image in about a minute. This picture was very dark and I was just able to make out what looks like a Sasquatch. That’s right, a big foot.

Now I’m thinking, what the heck? Why did someone send this to me? They took the time to hand address the envelope and attach an actual stamp. Normally, I would have thrown the whole mess away and thought, these fools. What a waste of money. But today, I needed a blog post idea, so I went to the website to see who these fools were.

So it turns out that this big database management firm has hired a marketing firm in the Dallas area to create a clever marketing campaign. From my perspective, I think they totally missed. They sent me a photograph of big foot. Trying to be clever, they out thought themselves. The theme here is you have to see it to believe it. But my perspective is they have been extremely “clever” just for the sake of being unusual. The end result is they missed the mark and have a stupid campaign that doesn’t support the customer’s brand or their pain.

Marketing isn’t about being clever. Sure, being clever is good, but it can’t be about just being clever. It has to be about the customer’s pain and solving it within their brand. Those things have to come before the clever part, or it turns out like this campaign.

If you need help with your marketing strategy or need to refresh your branding, give us all, we’re here to help.