17 Apr A Guide to Dashboarding (And How It Can Help Your Business)
Business dashboards provide the key metrics that allow you to make better decisions. Think of them as an ECG of your business. Here we examine what they are and how they can help you.
It’s not the most attractive of words. But it lies at the heart of every single business.
With proper structure you can figure out where you are and where you’re going. Your business structure props up the entire company.
If you have a weak structure, the business fails. You have nothing to support the dozens, or even hundreds, of processes that the business needs to succeed.
But a strong structure ensures you have everything in its proper place. This creates the foundation from which you can build a successful business.
Dashboarding plays a key role in creating the modern business structure. But before looking at that, I want to tell you a story about my consultations with many other businesses.
The Need for Business Structure
My successful background in business has led to many companies bringing me in to help them succeed.
There’s something that I see far more often than I expect. Many of the businesses I work with don’t have regularly scheduled meetings. They have no processes in place to track performance. In some cases, they don’t even have sales reports.
Simply put, they have no idea what’s happening in the day-to-day running of the business. They only know if they’ve done well for the year when they receive their profit reports from their accountants.
12 months is a long time to wait to figure out if you need to take action in a business-critical area.
Of course, there are signs that a business may not be doing as well as it could. A leader may notice that there’s not much money in the bank. If there’s no money, the product clearly isn’t selling. This puts a halt to any other plans that they may have had.
But they don’t know why there’s no money. They can’t take a look at their business and figure out where things are going wrong.
That’s because they have no hard structure in place.
What is Business Structure?
Your business’ structure is what helps you to figure out the problems that hold it back.
It all comes down to fear. It’s the belief that you’re not safe that shows you how important business structure is. It’s the fear you feel when there’s no money in the bank account, but you don’t know why. This fear causes leaders to become controlling or over-demanding.
In the end, the fear drives you out of business.
The right structural balance provides the remedy to that fear. It’s what will help you to redevelop the trust in your team. Teams that have trust outperform teams that don’t. They communicate well, take on problems collectively, and work to the benefit of the business.
Trust also helps your people to build the systems and processes that your business needs. With those in place, your business runs like a well-oiled machine.
But there’s a problem with structure. It’s not the most exciting thing in the world. In fact, many of the leaders that I work with can’t stand it. They want to go freeform with their businesses and let them evolve without getting involved in the nitty gritty.
Yet it’s that very nitty gritty that creates the foundations of your business. It’s how you move forward from your current reality into your vision. Resisting the creation of that structure means you’re resisting your own success.
It’s the hard structure that’s often most difficult to create. Many leaders hire others to manage their side of the business that deals with productivity and profit. They deal with the soft structure, which is often much easier to influence.
Dysfunction occurs when communication between these two structural sides breaks down. The business structure falls apart because there’s no bridge connecting them.
Dashboarding is the key. With proper dashboarding, you can help each side of your structure understand the language of the other. In doing so, you help each understand the importance of the other.
What are Soft and Hard Structures?
Your overall business structure comprises two types of structure:
- Soft Structure
- Hard Structure
Soft structure relates to your people. Think of it as the “being” side of the business. It covers everything from your people and the emotions that drive them, through to your values and vision. It’s about the people involved in the business and how what they do correlates with the business’ vision. This is something of an intangible concept. As a result, it’s very difficult to measure the success of your soft structure. However, it’s much easier to manipulate this structure than it is your hard structure.
Your hard structure relates to the business’ output. It’s the “doing” side of the company. Your products, systems, and processes all fall into this category. These are the hard systems and tangible processes that keep the business running smoothly and ensure it produces. It’s much easier to work out the figures that relate to your hard structure. However, it’s also much more difficult to change the hard structure. Doing so usually requires a complete organisational overhaul of products or processes.
As you can see, these two types of structure are often at odds with one another. Hard structure deals with the cold, hard facts behind the business. Soft structure deals with the less tangible emotions and feelings behind it.
Striking a balance between the two ensures the creation of a successful business. But many of the managers I work with place too much focus on the soft structure. They’re passionate about their visions, but not about the hard processes that help them achieve those visions.
As a result, they don’t implement dashboarding in their businesses.
The Types of Dashboards You Need In Business
Business dashboards are a fairly simple concept. They show you what’s going on underneath all of the data that your business generates.
That’s a key concept. Every business generates a ton of data, especially in the modern age. Sifting through it is one of the biggest problems that your business will face. Without dashboarding, you’re often left to wonder what all of these stats and figures represent in real terms. If you can’t figure that out, you can’t create a good hard structure for your business.
Let’s look at a few of the business dashboards that can help you.
Keeping track of your marketing efforts helps you to figure out how far your content reaches. This is particularly important in the digital age. Your website and social media accounts offer you access to an enormous worldwide audience.
But poorly structured marketing efforts lead to none of this audience paying attention. A marketing dashboard helps you to figure out if your marketing hits the mark.
You’ll often see marketing dashboards in digital formats. They’ll track metrics such as:
- The amount of people who visit your website
- How much time people spend engaging with your material
- How many people look at your material and don’t engage with the business
With these metrics, you can figure out what goes well and what doesn’t in relation to your marketing efforts. This helps you to adjust your structure to create marketing materials that hit the mark.
In the end, it all comes down to the financial metrics. If your business doesn’t generate revenue, it fails.
You can use dashboarding to keep track of your money. Moreover, it provides a much more accurate account of your finances than quickly checking your bank account.
Accounting and financial dashboards help you to figure out all sorts of things, including:
- How much money you make on a daily basis
- Where you’re spending your money
- What’s happening with your invoices
- Which creditors you must repay
This information helps you to develop a more comprehensive financial structure. Instead of relying on yearly reports from an accountant, you get up-to-date information on a daily basis. This helps you to spot operational problems that cost you money. Identifying the problem is the first step in fixing it.
Sales Performance Dashboards
Sales dashboards almost bridge the gap between marketing and financial dashboards. Typically, they offer an “at-a-glance” impression of how well your product or service sells.
They may include some basic financial metrics, such as how much revenue the business earns. They may also include some basic marketing metrics, such as where your biggest sales opportunities come from.
They’re a way for you to get an overall view of the different departments in your business and how they’re performing. From a sales dashboard, you can figure out:
- Which products and services are the best performers
- Whether you’re hitting your targets
- How today’s performance compares to yesterday’s performance
This data helps you to identify your current reality and how you can make structural changes to achieve your vision.
The Difference Between Lagging and Leading Indicators
Dashboarding turns a lot of data into key performance metrics, or indicators.
But there’s a problem. Some of these indicators relate to your soft structure while others relate to your hard structure. The names for these are “lagging” and “leading” indicators.
A lagging indicator relates directly to your output. Examples include:
- New revenue
- Operating income
- Outgoing expenses
These are very easy to measure, but quite difficult to influence. As a result, they relate to your business’ hard structure.
Leading indicators relate to your input. They’re much more difficult to measure, but they’re also easier to change. They can include things like:
- How customers perceive your business
- Your brand’s influence
- The number of innovations you’ve made
Usually, your leading indicators influence your lagging indicators. Think of lagging indicators as the end result, whereas leading indicators are the processes you used to achieve those results.
When viewed like this, you can see how they combine to influence your business decisions. For example, a lagging indicator may show you that a certain aspect of the business isn’t performing to your expectations. This will lead you to closer examination of your leading indicators. In doing so, you’ll figure out ways to influence the outcomes you get from your lagging indicators.
Dashboarding helps you to keep track of these indicators. As a result, it has a huge influence on how you structure your business.
The Final Word
You can’t build a solid structure without paying close attention to your indicators. Dashboards are the best way to keep track of them on a daily basis. You’ll identify problems quickly, which helps you to define both the soft and hard structures of the business.
At Behind the Scenes, we can help you to unravel the complexities of business structure. It all starts with our 1-hour Business Review Session.
During the session, my aim will be to help you see hidden opportunities in your business. We’ll discuss any aspect of your business in which you would like support, such as:
- Growth Strategies
- Sales and Distribution
- Pricing and Packaging
- Merger/Sale, Capital Raising, IPO
After 35+ years of working with small and large businesses, buying, selling and growing them across a range of sectors, I can work with you on any level or area.
And it all starts with a no-obligation 1 Hour Business Review Session.