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Home » Run Your Business

What does your business tell you?

What does your business tell you?

A few months ago my wife and I went to New York.  Whilst we were there we went to see the New York Knicks play the Memphis Grizzlies at Madison Square Garden.  Not only was this the first basketball game I’d ever seen, it was my first visit to  Madison Square Garden. Sadly on our visit the New York Knicks lost, in what turned out to be a very close game.

But the action didn’t just happen on the court. High above it is a huge electronic scoreboard showing the game as it happens or replays of shots on the large video screens as well as real time statistics by team.

The fans could see instantly how their team is performing.

But, could you tell how your business was performing?

In this post we will  show you how you can create your own information dashboard using actionable metrics.

First things first. Lets get on thing clear. Your information dashboard does not need to be 30 feet high. An Excel Spreadsheet will do just fine.

But to create a useful information dashboard, first you need decide the following:

  1. decide on your measures and how you will measure them;
  2. identify and collect them;
  3. analyse them
  4. communicate them
  5. interpret them
  6. act on them!

1. Decide what to measure

When you’re deciding what measures to include on your dashboard you need to:

  • Decide what results you need to measure, which is usually your goals or objectives.
  • Then design measures which will give the best evidence of those results.

2. Identify and collect them

Collecting data can be a time consuming process so:

  • Define the data requirements for the performance measures you want to report.  You’re looking to create an action plan for the information you need to collect.

3. Analyse the data

Once you’ve got the informaiton that you require,  you need to process it.

  • If you’re  bringing different sources of data together,it can be challenge as there may be no obvious way to link your data together (e.g. linking supplier invoices and suppliers together would be extremely difficult if you didn’t have the invoice numbers to link the two).

4. Interpret

Once you’ve analysed the data it turns into information. You then need to make sure this new information is presented in the most appropriate format so that you can communicated it.

  • Good performance information should drive business performance.
  • This may mean summarising the raw data into totals or averages or ratios for each time period, such as week or month or performing some statical analysis on the summary data

5. Communicate

In communicating performance information, you are influencing which messages the audience focuses on. You need to present your measures on your dashboard  in ways that provide simple, relevant, trustworthy and visual interpretation

  • line charts are good for trend information and bar charts for comparisons.
  • information dashboards shouldn’t just contain the measures. They need to contain all the information that the audience needs to understand the context, how to interpret what the measures are saying, and how to respond to what the measures are saying.
  • report your performance measures on a regular and cosistent basis (eg weekly or monthly)

6. Act on Them!

This is the most important step. When you have worked out what is really going on with your organisation’s performance, you are ready to make some decisions about what to improve, how much to improve it by and how to do that improving.

  • Define guidelines that signal what should happen when a particular result occurs. Specific results should trigger a specific response within a particular time frame.

Put an information dashboard in place for your business and you’ll have much better control over your business and be able to react should particular triggers or signals be incurred.

Do you have an information dashboard for your business and what do you measure?

6 Comments »

  • Steve said:

    Matthew,

    Some really great information on metrics and how to use them. Really knowing what is going on in your business from a one man startup to a fortune 500 kingpin is an huge asset.

    Even with just running a few sites I am always looking at my visitor data to try to discern patterns so that I can make the experince better for everyone (and hopefully increase followers)

    there are few things more important than the collection, analyzation and interpretation of data pertaining to your business.

    The only thing DEFINITELY more important is actually acting on the data

  • Matthew Needham said:

    Hi Steve, thanks for the comment. You’re absolutely spot on, the most important thing is not the stats, but taking the action. What I often find with my clients, is not that they don’t have measures, but they have too many and often can’t see the wood for the trees. Glad you’re tracking and taking action. Matthew

  • Mark of Success said:

    Hi Matthew,

    This is certainly “the CEO way” of running the business. Metrics are the key to understand what direction one’s business is heading in.

    However, many a times, business owners drown in excessive statistics and try to make sense of it all. As you very rightly pointed out, it is imperative that one defines the key metrics that define the success of one’s own business. The metrics that need to be measured differ from business to business, and are driven by the goals of the organization.

    Acting on the metrics then is the ultimate key. You may have all the metrics you will ever need, but there’s no point if you are not going to act on it. Like I always say, and wrote in a post on my blog too, action is the master key to success.

    By the way, I think “Interpret” doesn’t seem like an appropriate title for point 5. Could it be that you meant to name point 4 as Interpret and point 5 as Communicate? Wouldn’t that make more sense in terms of order as well as the explanation you attached to the respective points?

    This is my first comment on your blog, and I think you have just got a new follower 🙂

    I’ll see you around then…

    Wishing you success,
    Mark

  • Matthew Needham said:

    Mark, thanks for the comment here and the insight. I’ve just re-read the post and I see your point, I will change that.

    Thanks for the follow I look forward to sharing more information with you!

    Matthew

  • Mark of Success said:

    Hi Matthew,

    I was lucky… Your first comment on my site was sitting in the spam folder, and I just spotted it a few minutes back. I’m so glad I didn’t lose it. Just replied to your comment on my site too.

    I see that you’ve changed the order of Interpret and Communicate in your post. Thanks so much for taking action.

    By the way, something has happened to the layout of this page. You might want to check it out.

    On another note, since you said you liked the thought behind the challenge I’m running this month, I just wanted to check whether you have read the post with the Logical Goal (TM) for the challenge. I hope you participate in the challenge, though it started on the 5th. I’m sure you’ll be able to catch up.

    Wishing you success,
    Mark

  • Matthew Needham said:

    hi Mark, thanks for checking in. Sadly we’ve just moved house and the internet is not up and running yet. So, I can’t recheck the page until next week. have a great weekend, Matthew