Dashboards - Change Management and Getting People to Use Them

We live in a lucky time where consultancy offices, the internet, analytics firms and conferences buzz to the sounds of the dashboard revolution. But for many of us trying to get these new capabilities instituted, we run into serious hesitation and roadblocks from colleagues. We have a change management problem.

Why do people not like Dashboards?

There's a number of reasons that people push back against dashboards becoming the new norm in reporting. Over time I'll discuss in detail but some of the most common complaints are:

- They lack detail

- The raw data is locked away

- Hard to fit onto a PowerPoint slide

- The current process works fine

- People use them incorrectly and don't understand filters potentially creating misinformation

There's a solution for all of these complaints.


Data and Detail:

Dashboards should be used to quickly summarize information, prioritise new actions and re-affirm the current strategy. A lot of senior leaders however get frustrated when they can't see the detail behind dashboards. If sales fell short of the monthly estimate leaders always want to know the cause which is reasonable but the danger lies if we get pulled into the weeds and miss the key points. There's no point assigning 15 actions to 15 account managers to query 15 clients on missed forecasts, you've got to attack this issue strategically.

To avoid this, I recommend two things:
1. Clear expectation that the meeting will only share the dashboard, but that the dashboard owner will highlight and prepare key causes to missed KPI's
2. In the short term, raw data will be published alongside the dashboard until new process is strong enough to do without. Make sure to set a deadline of when this will stop, e.g. 3 months.

If you want your leadership team to lead they have to trust the details to the rest of the organisation.


Current Process is Fine:

People resist change with good reason, it costs time and effort. So it's up to us to:

1. Prove the value of dashboards
2. Highlight the failings of current static presentations
3. Provide a path to dashboards that will not inflate the preparation time vs. current process


Preventing Mis-information:

Data is rarely presented raw or whole in leadership updates with some necessary reductions preventing errors in presentation. Such as removing some previous year sales data in a product not sold in 2016... this reduces the 2015 figures but allows for like for like comparisons.

To prevent dashboards being mis-used like this, it's best to keep access restricted for a few months while people become familiar with your presenting, and then grant access following a short training session

Consultants - When and When not to use them

Consultants are a resource available to all businesses and can be deployed on almost any task. I've personally had many positive experiences with a range of consultancies and the scale of the industry is testament to their value. However, sit down with a group of leaders and you won't fail to hear of negative experiences and complaints on costs... the view from further down the org chart is typically even more dire.

Being asked to make tough decisions will always put consultants in the crosshairs but leaders using them incorrectly is also a big driver of the discontent among many leaders and staff.

When not to use consultants:

- To perform basic analyses to support projects (use your internal staff to compile numbers, you're paying for expertise)

- To tell people they are being made redundant (it creates a sense of fear for future use of consultants and portrays company leadership as weak)

- On back to back to back projects (Consultants need to up-sell and you should embrace their proposals but your staff will quickly tire of seeing priority given to external highly paid staff at the expense of internal proposals and expetrise)



When to use consultants:

- Interview your team to capture current state and assumptions (They'll ask questions and get answers you'll struggle to)

- Evaluate your strategy (Senior Managers and Partners have a breadth of experience and lessons to share and are incredibly valuable sounding boards - be careful of fresh MBA grads)

- Delivering technical solutions (If you are introducing new technologies or processes that you don't understand, have a consultant pilot it in your company and assist in hiring of a full time role to sustain the implementation)


Understand what your organisation is missing, and pay for that:

The common theme across all the points above is driving towards engaging senior experienced consultants and minimizing billable hours. Many of the projects which have caused the most angst across leadership teams involve large numbers of analysts billing expensive hours. Negotiate for your staff to fill these roles to reduce costs and internalise some best-practice approach from the consultants into your staff and wider team.

Geographic or Industry Distribution - Measuring Success or Failure

A danger for all businesses, big or small, is the improper use of assumptions. It's easy to criticise the use of assumptions but it's a necessary evil for being able to make quick decisions and not delay. One critical assumption to track however and keep up-to-date is the key sources of our sales.

Sales Distribution:

I typically recommend using country or industry (as in the end market you sell into) as the indicator of sales location. See the picture below for an example of how this chart may look.

I find Excel "Data Tables" included in graph can help diffuse people wanting extra detail. It's a trade-off

Some key questions to ask could be:

Why is Smaller Country A outselling Larger Country Z so significantly?

Are we seeing a re-ranking in our key contributing regions?

Etc...

Most months dashboards and leadership team sessions will not revolve around reviewing this metric, but you should ensure to include it in quarterly reviews to drive home the current business state. If you have the opportunity to have someone interview or test your team on their understanding of where your key sales are derived from, you may find more variation in answer than you expected.

Make sure to integrate this metric into an overall metric dashboard to have it included and not be a separate review expectation for leadership. See here for a discussion on business dashboards.

Customer Growth and Retention - Measuring Success and Failure

My work with Fortune 500 companies and leading consultancy firms have made me a firm believer in the power of information and metrics and a skeptic to the fact that most people would know how to utilise this info effectively.
Most of the work in my blog covers how to synthesis information and action it effectively. However, with the devil in the detail sometimes we need to dig deeper... we need to understand our customers.

Customer Growth

Other parts of this blog will teach and give examples of aggregated metrics for Revenue, Volume, Margin Dollars and Margin Percentage for the whole business or business unit. Great value can be found from applying this logic to your main customer accounts.

I recommend reviewing your top 15 customers (choose from 10-20) sorted by total Revenue and reviewing their performance through the above four metrics. Measure them for the current period performance against the previous, I typically default to SPLY (Same Period Last Year).

See the image below for a great example:

This should enable you to see a little more detail behind the headline figures and ask some pertinent questions.

Is my business becoming more concentrated in my top customers?
Are we getting price increases across the board or only at our smallest accounts?
Is there any common themes in our growth across customers?
Etc...

Challenge the data in your dashboard and challenge your leadership team on their understanding and ability to make decisive actions.


Customer Retention

A simple but effective metric, do we have more or less customers than we did last month/quarter/year?
Simply count if a customer ordered in both periods for a steady state. If a customer ordered in the previous period only and not the current one? Count them as lost. If a customer didn't appear in the previous period but has recorded sales in the current period? Count them as a gain. Sum this and track if overall customer count is increasing or shrinking. See an example below:

This is a metric that people can over-react to. Make sure your leadership team are reviewing this over a long enough period and not reacting to order patterns alone. I recommend tracking this quarterly or annually rather than monthly.

Also try to filter our true customers from small samples. If you sent a test product to a customer in 2015 and they never re-ordered, that's not a lost customer. Work to agree a minimum threshold.



Data is vital for today's business but can be a curse if we let it overwhelm us. When we need to get more detailed information it's a good idea to frame that from our customers perspective.

Margin Growth - Measuring Success or Failure

Just like Revenue Growth (See more on Revenue here), margin performance of a business, business unit or a product family must be judged by. If you are an executive or a business owner and cannot access your margin performance data quickly, accurately and easily then you have a serious priority to rectify.

Absolute Margin and Margin %

Measuring the total margin dollars you've achieved is vital to making sure the absolute profitability of the business in on target. Measure this regularly and separately.
In conjunction you must also track the margin % you are achieving to understand if your products are becoming more or less profitable over time. A sustained decrease in margin % will pose an existential threat to the business if you don't grow scale or tackle costs.

Margin Growth Vs. SPLY (Same Period Last Year)

The most typical use of margin as a metric is to compare current performance against a time in the past. For large firms this will typically be managed against the performance of the previous year. For example, on May 1st you will compare Jan-Apr 2016 sales against Jan-Apr 2015 sales - hopefully seeing an increase for 2016. If you are a small firm you may want to measure growth in small periods such as most recent three months against the previous three i.e. July - Sep versus Apr - Jun.

Of course you want to see positive revenue growth as a default. However, if your business needs to prioritise sales expansion you may find yourself sacrificing margin to achieve this. As long as you know the minimum amount of absolute margin that must be maintained, you will be confident to absorb the declines.

A high level summary with real data will help people trust other graphical work

Margin Trends

Absolute and Percentage Margin will typically be one number i.e. + 10%. The danger of this though is that it may hide vital information about what has happened in recent weeks or months. If you react to an overall profitability decline without appreciating recent improvements you may raise prices and lose customers unnecessarily, when prior actions had already set the path towards closing the gap.

See below an example of how an original margin gap has been closed and is trending in the right direction. Suggesting corrective action has been successful.

By July the original performance gap has been closed

Margin is a core metric and should form part of your regular leadership team discussions. However, ensure you use it as part of a bucket of metrics (See here) to gather the whole picture and rectify that against your stated business goals. If you do not feel like you currently have the capability to do this with your team you must quickly update your process.

Revenue Growth - Measuring Success or Failure

Revenue and Revenue Growth are key measures that all businesses, business units or product families must be judged by. If you are an executive or a business owner and cannot access this data quickly, accurately and easily then you have a serious priority to rectify.

Revenue Growth Vs. SPLY (Same Period Last Year)

Most common and important use of revenue as a metric is to compare current performance against a time in the past. For large firms this will typically be managed against the performance of the previous year. For example, on May 1st you will compare Jan-Apr 2016 sales against Jan-Apr 2015 sales - hopefully seeing an increase for 2016. If you are a small firm you may want to measure growth in small periods such as most recent three months against the previous three i.e. July - Sep versus Apr - Jun.

Of course you want to see positive revenue growth as a default. However, if your business needs to prioritise profitability you may find yourself cutting high volume low margin customers so that overall revenue declines while profitability increases.

Declining volume and marginal revenue gains are eclipsed by increased margin in this example

Revenue Trends

Revenue growth will typically be one number i.e. + 10%. The danger of this though is that it may hide vital information about what has happened in recent weeks or months. If you react to an overall revenue decline without appreciating recent improvements you may sacrifice margin and profitability unnecessarily, and create future difficult price increase conversations with customers.

See below an example of how an original revenue gap has been closed and is trending in the right direction. Suggesting corrective action has been successful.

Revenue performance is vital to sustaining and growing business performance. The above information will help in evaluating revenue, but you must combine it with other metrics (see here) and judge it not against simple positive or negatives, but against your agreed business goals.

Judging Business Performance and Success - Finance Dashboards

At the end of the calendar year it's important for business owners and executives to be able to understand how the business has performed and whether the next year is primed for success or at risk due to previous developments.

Through my exposure with top consulting firms and working for Fortune 500 companies, I've seen some core performance indicators that are relevant to family businesses or Multi-National Corporations. Below I share these thoughts and teach you how to utilize this into your repeated monthly run-the-business processes.

1. Revenue Performance

It is vital to be able to track the overall growth (or decline) of revenue over the year as a measure of scale of the business. Do not read revenue alone as volume and margin (pricing) must be understood as the determinants of revenue. When recording performance make sure to track a time element with revenue (i.e. months or quarters) to enable the ability to identify trends. For more on Revenue Performance click here.

2. Margin Performance

As above with Revenue Performance the same rules are vital for Margin. In addition, it is also important is to track Absolute Margin (Dollar count) and Percentage Margin (Profitability per Unit). Either of these alone will not give the full picture. For a more in-depth discussion on Margin and how to define it, click here.

3. Customer (Industry) Growth

Pick your top customers (I suggest 15 but between 10-20 should work) and track their performance versus Same Period Last Year (SPLY). Measure them across core metrics (Volume, Revenue, Margin) and sort them by total Revenue. This provides visibility to some detail and let you spot any worrying signs. In particular look out for concentration of business into one or two accounts or uneven growth. Do not include a time breakdown here as the detail will be overwhelming and distract. Click here for more info.

4. Customer Retention

A simple count of the number of customers this year versus last year. To make this as accurate as possible develop a simple screening rule to remove sample requests etc... Click here for more info.

5. Sales and Marketing Trends

This is essentially a time trend breakdown of the core metrics discussed in 1. & 2., enabling a graphical interpretation of trends. This is important to track for any unexpected spikes or the success of initiatives. It can also be very informative to see how long initiatives have sustained impact before performance drifts back to a norm. Pay special attention to negative trends. Click here for examples of revenue or margin trends.

6. Geographic (Industry) Distribution

Understand where your sales are coming from. Simple column charts are very effective here for describing the differences and highlighting potential concerns. If you sell as much in Ireland as you do in the U.K., it would suggest your U.K. sales team are under-performing. Click here to understand more about how to make effective use of distribution measures.


Finance Dashboards

Most businesses will track at least three of the above performance indicators which is an effective start. One consistent failing I find however is that they are reported independently of one another which prevents decision makers from having the whole story. Many tools now exist such as Tableau or the Shiny App from R to enable business analytics to share all this key information together.

See below a basic interpretation of how you should start to combine your messages into one effective slide / screen. Click here for a full discussion on how to design and implement dashboards to your business.

Integrate this design to your regular reporting process to improve core understanding

Dummy Data shown to illustrate what the completed dashboard may look like in Microsoft Excel