Why Most Reports Fail - and How to Make Yours Essential for Decision-Makers
Creating reports that no one uses is like cooking a meal that no one eats—a waste of time and resources. In analytics, unused reports aren't just missed opportunities; they're wasted investments. So, how do we make sure our reports are valuable and drive action?
The Challenge of Creating Valuable Reports
A big hurdle is understanding what truly matters to decision-makers. Managers often can't clearly state their true priorities and key performance indicators (KPIs). They may give broad goals without specifics, leaving analysts guessing what's important. It's like trying to hit a target in the dark.
As analysts, we must be detectives, asking questions to uncover core objectives. This takes curiosity and consulting skills. By understanding what decision-makers really need, we can create reports that are not just informative but actionable.
Two Modes of Data-Driven Thinking
Before creating reports, recognize two main ways of thinking with data:
Free Analytical Exploration
In this mode, experts dive deep into data to find hidden insights. They ask new questions, spot unknown trends, and discover opportunities. Tools like Power BI and Dataiku help with this kind of analysis. New tools like ThoughtSpot, which leverage generative AI (genAI), make data exploration even easier.
While great for innovation, ad-hoc analyses can't replace regular reports for ongoing decisions. We can't just give decision-makers data and tools and expect them to find what's important. They need structured reports that highlight key insights relevant to their roles.
Decision Support in Processes
This mode helps with known and recurring situations. Decision-makers rely on standard reports to guide routine actions. This gives them a head start instead of starting from scratch each time. The key is to deliver quick, reliable, and accurate information that supports their decisions.
Types of Reports in Decision Support
There are three main types of reports:
Status and Alarm Reports
These serve as a car's dashboard, displaying real-time data and issuing alerts when attention is needed. They signal alarms and confirm that everything is running smoothly. Just as a fuel gauge warns of potential issues, these reports inform decision-makers about key metrics.
To create effective Status and Alarm Reports, we need to know:
Focusing on key KPIs prevents information overload and ensures important signals aren't missed.
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Root Cause Reports
After identifying an issue, Root Cause Reports explore why it happened. They help decision-makers understand problems to create lasting solutions. For example, if sales have dropped, is it due to competition, internal issues, or changing customer preferences?
Don't use these detailed reports as initial alerts. Too much information can overwhelm and distract from immediate action. Some Root Cause Reports might highlight issues that aren't relevant now. Interpret these reports carefully to avoid wasted efforts.
Decision and Action Reports
These provide insights into possible interventions and their risks and benefits. They help decision-makers quickly assess the best action. For example, if inventory stock increases, the report assesses options such as reducing the price to boost demand, slowing production, or increasing reserved warehouse capacity. The report outlines the impact and risks of each option.
Defining these reports can be challenging. They need a deep understanding of the decision-making process and often involve complex analyses. Advanced analytics techniques may be necessary.
Where to Begin: Delivering Immediate Value
When starting a new reporting project, deliver value quickly. Begin with Status and Alarm Reports. Focus on the most important KPIs for decision-makers to provide immediate insights. This isn't always easy, as key KPIs can vary by role. Furthermore, the importance of KPIs shifts depending on the context of communication. In the same business process, which KPI is important can greatly change. Understanding these differences is essential to developing valuable reports.
Fundamental Principles to Keep in Mind
Creating impactful reports requires understanding the business and its priorities. Here are some common principles often suggested:
To adhere to these principles, it is essential to have a good understanding of the business. To speed up this process, I have developed two frameworks: Value Focus and Key Questions Focus. By using these models, you can quickly understand the business. They can help you deliver valuable reports more efficiently. I will explain them in next week's article.
Conclusion
Creating impactful reports means understanding decision-makers' needs and communicating what's essential for them. In a new project, it is good practice to start with Status and Alarm Reports.
In our next article, I will share my lessons learned on how to speed up understanding of the business. I will provide further details about my Value Focus and Key Questions Focus frameworks.
Stay tuned, and feel free to share your thoughts or experiences.
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6 个月In past experiences I saw the need for reports can quickly become urgent, however such are soon stop being used too (ie sudden hype or interim KPI). The best scenario for report to "survive" is when report use is embedded into regular business process. Although I remember cases too, when process became obsolete while no one told people to stop creating given report.