Strategic Discipline Blog
Let’s get into the nitty gritty of creating a compelling business dashboard. What elements need to be there, and what guidelines should you consider? Hopefully last blog Last Friday of the Month – How’s Your Dashboard Looking? on my health dashboard provided some insight into building a better dashboard.
Topics: leading indicators, Business Scorecards, key performance indicators, Four Disciplines of Execution, Create Business Dashboard and Scorecard, Build Business Dashboard, Create Business Scorecard
From the outbreak of the Civil War until July 1863 General Robert E Lee, commander of the rebel Confederate forces was able to repulse, evade, and defeat a much superior size and equipped army of the Potomac. He relied on precise, accurate information about the movement of his adversary as provided for him by his cavalry commander Jeb Stuart. This flamboyant, attention seeking, audacious, Major General provided reliable information that allowed Lee to at one point to divide his inferior forces and capture an important victory at the battle of Chancellorsville. That confidence building victory propelled Lee to invade the North in June of 1863 bent on dealing the Union a crippling blow that would capture Washington DC and bring Great Britain to the Confederate forces aid.
Last week I received a comment on my Pearson’s Law blog from Tomas, “Sounds simple yet very effective in any area where you want improvement. I've been implementing this law for the last year and a half in many ways and I can say it works exceptionally well. Performance accelerates every time.”
Last night my sleep pattern was severely disrupted. About 10:30 PM the nurses discovered I was running a slight fever. Immediately they jumped into action. On the Leukemia ward of the hospital anyone suffering from a fever is handled seriously.
Yesterday my reality check came.
How simple is it to make a dashboard? I’m waiting for the diagnosis from my biopsy. Still the University of Iowa has displayed on a bulletin board in my room a dashboard with some of the vitally important metrics for my condition.
A question that frequently comes up is what should I have Key Performance Indicators for in my business? Certainly there are lot of options. Revenue and profit margin are Key Performance Indicators that everyone should monitor, however these are lagging indicators. What Key Performance Indicators do you have in place that predict your revenue and profit margin? Do you monitor your sales effort and have indicators that report on your sales pipeline? How reliable are these? Do you monitor your variable costs and fixed expenses? Contribution margin is a good forecaster of profit margin as well as gross profit margin. Yet do these give you enough information far ahead of your performance to be true leading indicators? With time and practice whatever number you choose to watch you can discover which key metrics help predict the crucial outcomes in your business.
As we approach 2011 and put 2010 in the review mirror it’s important to understand that there are two types of key performance indicators in your business: leading and lagging.