Keep your eyes on that KPI dashboard! Especially in uncertain times!

Keep your eyes on that KPI dashboard!?Especially in uncertain times!

It’s a New Year!?I have been seeing many memes and cartoons about the uncertainty of 2022.?There are many things we cannot control, but as leaders we can control how we react to situations.?I am a staunch believer that every organization should have a set of KPIs designed to show you how you’ve been doing in the past and how you could be doing in the future. That ‘dashboard’ of KPIs lets you measure yourself against competitors, like-minded companies and even against yourself which is also important.

There needs to be some kind of comparison.

I believe KPI dashboards are the only way that a true leader can lead so as the CEO of an organization of our size, I am dependent on ours.?It’s no different than flying a plane, captaining a ship or driving a car.?If you can’t look down quickly and see gauges and metrics, you’ll run out of fuel, drive too fast, crash the plane or find yourself unknowingly in a cloud, flying upside down or worse, heading towards a rock face. Gauges are there to tell you how you’ve been doing in the past and how you’re going to do in the future.?

But beware, A KPI dashboard can be dangerous if the data in it is wrong – either because someone has input data incorrectly, or made technology connections that are wrong. ?You can’t base decisions on false information.?

"Bad" data is worse than "No" data. It’s better not to have a gas gauge at all than to have a broken one that misleads you about how much fuel you have.?If there’s no gauge, you’ll make sure you’re always filling that tank, just in case. But if you have a broken gauge that always reads ? of a tank, you’ll run out because you’ll mistakenly trust that information.

It’s the same with an organizational KPI dashboard.

If a KPI dashboard has no relevance to a benchmark, you have no idea if the numbers you’re looking at are good or bad. The reason a gas gauge works is because it measures between full and empty. But if a gauge simply told you that you had two liters of gas, most people would have no idea how much that was.?Does two liters mean you’re going to make it a few kilometers or does it mean you’re only going to go half a kilometer more?

One of the keys to managing in a hyper-growth situation, where things are moving at a rapid pace and you need to know where the trend is going, is that KPI dashboard. Are the trends going up or down??You could be trending against a previous week, a previous month, a previous quarter or a previous year – it all depends on what that particular KPI is and how important it is to the organization.?It’s vital to know where your trends are.

You need benchmarks to provide relevance for your dashboard.?How are you doing compared to your industry competitors? How are you performing against an industry standard? How about against your past performance as an organization? You need those metrics.

A dashboard becomes useless when people don’t look at it.

Often organizations create automatic dashboards, using technology to create, in real-time, all of their different operational aspects. Sounds great but you can have all the dashboards in the world and they won’t do any good if nobody looks at them. All of a sudden, you’ll find that you’ve run out of gas or been flying the plane upside down for weeks and weeks. Nobody noticed because no one’s been looking at the dashboard.

The key I have found is to we make sure people can verbalize their metrics.?

Even if technology tracks their KPIs, we still meet every day and people verbalize their commitments instead of simply typing them in.?We meet every day because things change every day – ?and each person says their department’s number and whether it’s red or green, bad or good. Three reds in a row requires a comment to explain things. Five reds in a row and that leader has to write a report.?

It takes a long time to build that kind of culture but from the very beginning, we instituted 10am reporting so we can make decisions by noon. As we grew, we didn’t do a very good job of handing over knowledge so now we’re working hard to help people understand why the dashboard is there, why we need the metrics and what the numbers mean. No one can just fill in their numbers or send in a status update. They need to see whether there’s a trend and report on their KPIs.

They have to get on a screen or in a room and report on their wins, their challenges and their KPIs.?

It’s not about presenting to the senior leaders – it’s about each person reporting their numbers and hearing their own words. You can deny data really well if you aren’t looking at it, so many people close their eyes to it so they don’t have to look at downward trajectories. It’s not on purpose, it’s just human nature. But if you have to say the words and if you have three days in a row when it’s not going so well…that’s the difference between using a KPI dashboard properly and just using it to check a box.

In hyper growth, it’s most important to constantly compare yourself to yourself. Quarterly and annually, we compare ourselves against the industry benchmarks, our accountants help and so does our internal staff. Every department has acceptable parameters within which they operate but we compare ourselves against ourselves on a daily basis.

Verbalizing KPIs makes them useful, not useless. Real and not automatic.

The only way we can move forward is by forcing our leaders to verbalize their KPIs and learn from our mistakes. It once cost us $150,000 to learn that we need to colour code our KPIs.?That’s right. We missed two important trends because we simply weren’t yet using red and green.?

Measuring what matters takes time and your KPIs have to be either leading or lagging indicators.?If not, they’re not helpful in decision making. It’s essential to get leaders to give their top KPIs consistently – we manage about 20 on a daily basis.?

Thinking about your own KPI dashboard?

Does the data support your vision.?It’s not okay for your finance department to simply fill in the dashboard and then have everyone look at it.?It’s putting the right data in the hands of the right people that makes the difference.

So as we embark on a new year, ask yourself:: does my dashboard track the metrics that enable us to make the decisions that will take us forward? Are all the leaders in our organization taking ownership of ensuring that those metrics are accurate every day??Remember, incorrect information is worse than none at all.?2022 will be uncertain enough, so add some certainty to your metrics and maximize the dashboard.