The Importance of Models and Dashboards for Enhancing Company Communications

by: Larry Girouard, President, The Business Avionix Company

The Importance of Models and Dashboards for Enhancing Company Communications.

It is often said that a picture is worth 1000 words and this sums up the reasons why visual communications is so important in the workplace. In business, pictures can take on many forms such as dashboards, charts, graphs, project maps and timelines, and a wide variety of business models that convey how the business, or segments of the business, are performing. With today’s computer technology these types of graphics can be monitored and updated in real time, or close to real time, providing the user with valuable visual aide regarding a wide variety of business performance metrics.

While this is so true, most small businesses rarely used picture/models/charts/graphs in communicating up, down and across the organization chart.

We use models every day in our personal lives. Think about the dashboard on your car. While driving you can quickly monitor the speed, gas level, oil level, engine temperature, and much more. When these gauges are all reading in the safe zone your confidence level is high that your car is running well. When a gauge is not reading in the right zone you address the issue, like buying gas. You trust the data on your dashboard because they are monitoring the different performance elements of the car in real time. The relationship you have with your car dashboard becomes second nature. The wonders of technology!

Now, think about the value of having this kind of real time monitoring for the performance elements of your business.

Business models/gauges can be more strategic when they outline the market, customers, products and competition, or they can be tactical when focusing on work flow within a specific process you want to optimize. Models must be visual. I am reminded of the old war movies of the 1950s when the generals would stand around a large table with a map of the battle theater. You would see models of ships, troops and the like being moved around while the generals discussed strategy and tactics. They communicated through the model to make sure everyone was on the same page. In the design of chemical plants, something I am very familiar with, pre-construction scale models are often built to better convey the intricate details for placement of electrical conduits, process equipment, HVAC ducts, piping and other considerations that may not be picked up with drawings, CAD/CAM or other design vehicles.

Models are graphic, easy to understand at the outset, and provide great value in communicating performance and expectations of the company, departments, and even people within departments.

Business dashboards are a model format that tracks business performance in real time. In today’s data rich business environment, accessing this information, and formatting it using simple algorithms, can present instant summaries of a wide variety of performance metrics. Mining data in this way is very powerful.

While executive dashboards are good, of equal or greater importance are dashboards that managers, and even employees, can use to monitor their “spheres of influence”. For dashboards to be effective their readout must be updated regularly, if not in real time, in order to have value as a business tool.

 

Dashboards and other model formats give businesses numerous benefits including the following:

  1. Visibility: Dashboards give managers and employees greater visibility and insight. You know exactly what’s going on in all aspects of the business segment, or process, you are responsible for which allows you to better manage it.
  1. Ongoing Improvements. One of Peter Drucker’s most famous quotes is, “if you can’t measure it, you can’t improve it.” W. Edwards Drucker famously stated “in God we trust, all others must bring data.” Dashboards and other business models allow you to measure performance throughout the organization and either improve it, or respond faster to a business situation because of the real time feedback provided by some models.
  1. Time Savings: Managers spend hours preparing reports and searching their computer for data that indicates how the business, or department is running. Like the dashboard of your car, this instant feedback eliminates to having to look for information. It will always be right there at your fingertips.
  1. Compare Performance Against Your Plan, or Key Performance Indicators (KPIs): Managers spend an inordinate amount to time creating a business plan to guide the company in achieving market penetration and financial goals, but that is just the first step. Making sure the company is performing to, or exceeding, the expectations or KPIs is just as important. A dashboard can provide you much of that information in real time.
  1. Employee Performance Improvements: No one likes to be measured. Remember your experiences in grade school and high school. While we all try to wipe those memories from our minds, if performance against corporate KPIs can be linked to a bonus/reward system this will change the: being measured” dynamics.

6. The Challenge: So where do you start? Choosing what metrics to model and track is always the operative question. I strongly suggest that you begin the process from the outside in. What does the customer see? They see all the elements of the value proposition. These elements are commonly referred to as the customer “touch points” like quality, on time delivery, lead times, friendly informative operator etc.

If you are going to go through all the pain to develop models and dashboards to be able to objectively look at your business with the intent to improve business segments based on what you see, then first pick metrics that directly interact with the customer. Why start here? Any improvements in these metrics will directly and positively impact the value proposition thereby facilitating market penetration. The ultimate win/win!!!

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