Let’s be honest, most of us have dashboards. We have KPIs in our business. The question is: do you actually use it? Does it drive results? Does it identify risks? Is it ingrained in your business, and is it used properly?

We have a wealth of information in our companies. We pay thousands of pounds to consultants and companies to create these reports and dashboards. But the problem is that so few people actually use them. Often, it’s seen as “job done” when you set up your dashboard and get it populated. In my view, that is a job started, not a job done.

What is a dashboard?

So the first question is: what is a dashboard? Many of you will have reports. Many of you will have lots of information scattered in different places. And I want to clarify, from my perspective, that is not a dashboard.

A dashboard is a single document that helps you understand the key KPIs that you need to review in order to understand how your business is performing. You can have departmental dashboards which have the key departmental information for the department heads, and you can have a management dashboard that shows the management team how the business is performing holistically. In other words, the different functions: sales, marketing, operations, finance, etc., and any other business units that you might have. How those areas of the business are performing.

So that’s what I mean by a dashboard. A report is not a dashboard. A whole bunch of information that you have to get from different places is not a dashboard. A dashboard is like your car’s dashboard. You don’t need to run around your car and open the hood and wiggle wires around; all you need to do is get in the front seat, and you just look in front of you, and that dashboard makes it obvious if everything’s okay. That’s what your business dashboard should be.

So, I’m going to share my top five tips on what you can do to really bring KPIs to life in your business and to make them useful tools, not just random data collection exercises.

Tip 1: Think about your KPI dashboard as a crystal ball

Tip number one is I want you to think about your KPI dashboard as a crystal ball, not a rear-view mirror. What I mean by that is so many people look at KPIs on a monthly basis or on a quarterly basis. The trouble with that is if you are looking at that information, it is historical. It has already happened.

What you need is something that’s going to help you understand how the month is likely to turn out, how the quarter is likely to turn out. So, stop looking backwards with your information and start understanding your information and building it so that it gives you an idea of what the future is going to look like.

In business, time is everything. If you have a dashboard that’s always looking backwards, you are only going to know that you have a problem when you are in the problem. If you have a dashboard that is forward-facing that helps you predict performance, you’ll be able to spot the trouble months, weeks away. And having weeks and months to sort out problems gives you options.

If you tell me you’ve got a cash flow crisis today or tomorrow, there are very limited options that we have at our disposal. Tell me that you’ve got some trouble on the horizon in two months, and all of a sudden, the options open up to you.

So, how do you turn your dashboard into something that predicts the future instead of just telling you what’s happened already? Well, you need to understand that there are two different types of KPIs. There are lagging KPIs, or outcome KPIs, and you have activity or leading KPIs. Leading KPIs are the numbers that drive the results. The results are the outcomes.

Most of you do not have a proper understanding of what the leading KPIs are for the key outcome KPIs in your business. What a very well thought-out, structured KPI dashboard will give you is the outcomes as well as the key drivers; those leading indicators that will be the things that you need to work on in order to influence the outcomes. So smart dashboards have the outcomes, but there is more emphasis on the drivers—the things that actually drive those outcomes on a daily and weekly basis.

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Tip 2: Frequency matters

Tip number two, frequency matters. If you’re only looking at your KPIs on a monthly or quarterly basis, that is not good enough. You need to make sure that you have visibility of those key leading indicators, the things that are driving the results, at a minimum, every week.

That way, if things are off track week one or week two of the month, you’ve still got the rest of the month to save the month. I want you to know that you are unlikely to hit a target well before you get to the time that the target needs to be met. By giving yourself a weekly dashboard, and in some cases even daily reporting—a daily dashboard—you give yourself plenty of opportunities to be able to close the gap. You give yourself plenty of opportunities to see trouble on the horizon. And that is what helps tip number one, which is turning your information into more of a crystal ball.

Time is everything. If you look at your numbers on a more frequent basis, if you have a KPI dashboard that gives you an instant understanding each week of what’s off track, then you’ve got plenty of time to sort it out.

Tip 3: Bringing your KPIs to life (Owners and Actions)

Tip number three is about bringing your KPIs to life. And what I mean by this is you need owners, and you need actions. Each KPI on your dashboard needs to have one specific owner, one guardian, one person who takes responsibility for ensuring that that KPI is being managed properly. One person who makes sure that if remedial action is required to try and shift a number, that person makes sure that it gets done. Even if they’re not doing it themselves, it is their job to make sure that their number is being properly monitored. It’s their job to flag up the risks. It’s their job to make sure that that number is recovered or that the alarm is raised.

So many businesses have KPIs, but they do not have ownership, and everyone else thinks that everyone else is watching the numbers, and nobody owns it, and therefore, things slip. So if that applies to you in your business, make sure that you’ve got specific owners for all of the various KPIs on your dashboard.

The next thing is we need actions. Your team need to understand what specific actions they need to implement to influence those leading indicators. If a number is off track, your team member needs to know by default what the top three to five things are that we have to do to move that number.

I don’t want you to leave things until you get into a weekly meeting and things are off track, and then you have a brainstorming session. That is a waste of time. Get proactive about this. Understand the key activities that you can put in place to affect each of those key drivers in your business. And as soon as those numbers are off track, then you can get to work on it. Everyone should already know what the game plan is. And it’s the guardian’s job to make sure that the actions are implemented promptly.

Tip 4: Follow the variance

Tip number four is to follow the variance. Some people have KPIs, and they’re just looking at actual numbers in isolation. Context is everything with information. You need context. You need comparison to make the data meaningful.

So if you just have your conversion rate being reported 25%, 28%, 22%… Okay. Well, it’s kind of useful, but not massively useful. What you need to understand is what your conversion rate is. And if you structure your dashboards properly, you should have a target, you should have an actual, and you should have a variance.

In an ideal world, you should know what the target should be for that week, depending on where you are in your month, and you should know what the actual is against that target, and therefore, the variance should be glaringly obvious. You need to use red, amber, green (RAG) to make those variances really jump out. Green is on track or ahead. Amber is it’s at risk, but if we knuckle down and we focus, we can fix it. And red is a complete disaster; this is not going to be recoverable, and we’re going to miss our target for this month.

Using variances and using RAGs are absolutely critical. You need to have targets. Those targets should be aligned to your budgets, and you should be able to reverse engineer all of your KPIs down so that when the leading KPIs are off track, it gives you visibility that the numbers up track are going to be off track. Again, this ties into that whole thing about making your KPIs a crystal ball, not a rear-view mirror.

You need to make sure that you understand precisely what the targets are across all of the various activity KPIs or leading KPIs. You need to monitor those variances, and you need to have the action plans in place to take remedial action when that is required. Variances are key. If you’re just looking at numbers in isolation, it is genuinely pointless.

Tip 5: Embed KPIs into your meeting rhythm

And tip number five is embed your KPIs into your weekly and daily meeting rhythm. KPIs come to life when they are part of the habit, the routine of your business. The best way to do that is to align the various KPI dashboards to the various meetings that take place in your business.

Every single weekly departmental meeting and management meeting needs to have an agenda point where the KPIs are reviewed and the KPIs at risk are focused on. That’s what brings this information to life. It is those meetings that should be the catalyst for action. It is those meetings that should be the accountability piece to make sure that actions are being delivered that might have been agreed upon previously.

That is how you bring your KPIs to life. You don’t just want random information everywhere. You want a proper dashboard that is consolidated and gives you quick visibility of the key things that you need to understand.

Summary

We don’t want to keep looking backwards. We don’t want to look in the rear-view mirror. We want to look forward; we want your KPIs to be a crystal ball.

Frequency matters. Looking at KPIs once a month, once a quarter… who cares? You need to look at your numbers at least every week. For many of you, you might have to look at some numbers daily. If your business is under pressure and you’re underperforming, daily visibility of the key numbers is really, really important.

Bring them to life. Don’t just have numbers, have owners for those numbers. Make sure that your team understand what actions they need to implement to influence the numbers when they are off track. This should be a default process. It shouldn’t be something that requires a brainstorming session once a week when things aren’t where they need to be. Get proactive about this.

Next, variance matters. Variance counts. What you need to make sure is that you have targets and actuals, and you monitor the variances. You’re using RAG to make it blatantly obvious when things aren’t where they need to be.

And finally, embed your KPIs in your meeting rhythm. It’s about habit. It’s about routine. It’s about using the information instead of having it stuck in somebody’s inbox or in some SharePoint folder. You need your meeting rhythm to ensure that those KPIs that you have get the time and attention that they need consistently.

Do all of that, and you will bring your KPIs to life. And that, ladies and gentlemen, is the difference between having KPIs and using them properly.

What do you need to do? Which of these tips are most important for you to get right in your business? Give this a go and I’m sure you will get better results.

See you next time on “Mind Your Own Business.”