In our last article, we talked about how “dashboards” (displaying business-critical information in story-board form) informs decision-making and motivates everyone at every level in a business. From the CEO down, dashboards keep employees focused on the activities that most directly improve company performance.
Dashboards don't just spotlight the critical issues, they change the very behaviors that most impact those issues.
We call it The Dashboard Effect.
By putting The Dashboard Effect into play, financial professionals can trigger the strategic conversations and insight that tap into employees' greater potential. That said, when companies consider creating dashboards, they typically focus on providing visibility to the leaders. In other words, the only purpose for business intelligence in the minds of most executives is the executives, and for good reason.
Using data to hack your business, just like Billy Beane of Moneyball lore did to achieve the Oakland Athletics’ unprecedented baseball success, is the process of getting under the hood of your business and zeroing in on the precise levers that most impact performance.
Executive dashboards connect high-level strategy to real-time operations. They keep your carefully developed plans (those that were made in the rare moments when you had time) at top of mind, rather than gathering dust in a static document somewhere.
Providing an instrument panel, a single pane of glass to show real-time progress against strategic priorities, helps executives keep a firm hand on the wheel. It gives them the power to remain proactive rather than reactive, capitalizing on opportunities and mitigating issues when they’re most easily addressed. And that's essential to progress.
While there's not doubt executive dashbaords are a good place to start, once executives have the insights they need, the potential to transform a business by sharing insights across the organization is exponentially greater. In other words, by cloistering your dashboards in the proverbial boardroom, you'll fail to create The Dashboard Effect, leaving the lion's share of value from your data untapped.
In our experience, the simplest, lowest cost way to become a data-driven company, not just at the executive level but throughout the organization, is to share dashboards that show performance against goals, at every level of the business.
Charles Coonradt, author of The Game of Work, asserts that the single most effective means of improving performance in any area is to increase the frequency of the feedback. While you might argue that people dislike being measured, without question, people love keeping score (as evidenced by our collective obsession with sports). By Coonradt’s way of thinking, “People like playing games because they know the rules and the score…when we don’t know the rules or the score…we tend not to want to play or we play safe.”
Consider a recent study conducted by researchers at the University of Chicago and the London School of Economics that used data feedback to reduce Virgin Atlantic’s fuel costs. Some pilots were given a set of personal goals and provided with immediate feedback on how efficiently they used fuel. Another group was not given personal goals, and was only given feedback on fuel consumption at the end of each month. The group of pilots given personal goals and immediate feedback outperformed their peers by as much as 20 percent. More importantly, not only did these pilots lower the Airline’s fuel costs, they also reported higher job satisfaction.
Dashboards help a business operationalize measurable goals, providing a firm grounding for employees.
The result at our company, and at the companies we’ve helped across several industries, is a stronger sense of ownership, greater job satisfaction, and better outcomes. Employees predictably become more engaged when they know the rules and can focus on winning the game.
To be sure, every company has goals, but precious few do a good job measuring performance against those goals. In our experience, those that do measure, spend more time celebrating those goals and less time revising them.
Without a scoreboard, working can feel like running a race blindfolded; you might put forth the effort, but if you can't see the other runners or the finish line, it’s difficult to muster the x-factor needed to win. The Dashboard Effect changes that. Dashboards make it possible to monitor the heartbeat of an organization and, in our experience, do more to encourage the transformation of executive and employee behavior than any other technique or tool we’ve seen.
For more information on The Dashboard Effect, download a free sample of our book, The Dashboard Effect. Give us your feedback and we’ll ship you the full book on our dime.
If you are ready to strike up a conversation about how companies can use their data to increase efficiency and profitability, get in touch with us here.