How to create a business dashboard to monitor the health of your business

Board & management papers

6 min read

In a medical check-up, a doctor will typically look at their patient’s symptoms to diagnose if anything is wrong with them, rather than go through their entire medical history.

When it comes to assessing the health of their organisation, board members would like to do the same, and this is where the business dashboard comes into play. Rather than be bombarded with a mass of data recording the minutiae of the organisation’s every activity, they’d like to consider a subset of carefully selected metrics to understand its performance. After all, just as a doctor distracted by past or minor complaints may miss signs of a developing illness, boards overwhelmed by information can fail to spot critical insights.

In recent research conducted by Board Intelligence and the Chartered Governance Institute UK & Ireland, we discovered that 66% of directors feel that finding the key messages in their board packs is like finding a needle in a haystack. So, how can we make sure that directors have easy access to the key messages?

One of the most effective ways to avoid overwhelming the board with data is to give them access to an organisation dashboard. Sitting alongside other board papers and reports, this dashboard can provide an “at-a-glance" view of the health of the organisation, which helps directors to focus their attention, experience, and time where it matters most.

What do we mean by “health of a business”? And why are dashboards useful?

A business’ overall health refers to a holistic picture of its performance against its key objectives. It isn’t just a financial and operational picture, it also reflects performance against a range of other factors such as sustainability, stakeholder relationships, customer satisfaction, and purpose.

Done well, business dashboards are a vital tool for both board members and management. They provide a “single source of truth” when assessing the business’ health and critical metrics, ensuring the organisation’s leaders are singing from the same sheet. And they help to quickly answer the high-level questions that are front of mind for directors and executives — like “How are we performing against our goals?” and “Where are we off track, and is it material?”.

They also help to address a common complaint from board members, which is that in order to get a sense of what’s going on at a high level they must piece it together from individual reports running into many hundreds of pages. With a well-structured, comprehensive, and concise company dashboard, board directors can more easily access the insights that help them pinpoint risks and opportunities and focus their attention on addressing the most significant ones.

Done well, the introduction of a business dashboard can transform board conversations — meaning directors spend less time drowning in detail and more time on issues and ideas that will move the needle.

Business dashboard best practices

1. Align your KPIs to your value creation story

Most organisations we speak to are drowning in data. The starting point is often a raft of regulatory-required measures, to which are added all the metrics that the executives think are important, the metrics they think the board members would like to see, plus a range of KPIs “just in case”. It’s easy to end up with 10 pages or more of numbers, graphs, and charts. Rationalising the data set down isn’t easy.

We suggest taking a different tack: put your current KPIs to one side and start with your value creation story instead.

This means identifying the main outcomes you’re trying to achieve as an organisation — effectively, the reasons your organisation exists — and then thoroughly understanding how your organisation delivers against them and creates value. All the metrics you include in your dashboard should stem from, and directly speak to, this handful of high-level goals.

2. Choose the right data by setting the bar high

Framing your dashboard around a short list of desired outcomes won’t prevent information overload on its own. Each of these outcomes could bring its own complex set of leading indicators and performance metrics running to many pages.

So, to make sure you choose the right data to produce an effective dashboard, think of it as the tip of your organisation’s information pyramid, containing only the highest-level cut of the key metrics.

Then keep it to one page and one page only. We believe this can be done even in the largest and most complex of organisations.

Key to this is to frame the data around questions. For example, rather than having “financial performance” as a section heading, ask “Did we meet our financial goals?” and present the metrics that best answer that question. Because ultimately, data doesn’t drive insight — questions do. You can use the Question Driven Insight (QDI) Principle to help you work out which questions to ask.

By keeping your dashboard to a single page, you set a high bar for choosing which data to present. This helps you avoid “information for information’s sake” — the source of many an information blizzard. It also fosters greater discipline and focus outside of the boardroom by forcing management to think critically about what to include and, crucially, what to leave out. The result is a clear and shared understanding of what matters — both the activities and plans that will help the business to meet its goals, and the metrics that show you if they’re working.

Additional detail goes into an appendix or functional report so it doesn’t cloud the picture you’re painting. By avoiding the temptation to drill down into the detail in the dashboard, you help directors to scan the full horizon and work out where to focus their time and energy.

We’d also recommend that you limit your colour palette and use only green and red colour coding to indicate on- or off-track performance. This prevents the dashboard becoming an amber sea that provides little insight.

“Today, we have a dashboard of around 40 to 50 Key Performance Indicators (KPIs) that give us a holistic view of performance. A minority of these are “pure” financial metrics, and the rest cover brand, operational, integrity, people, regulation as well as other metrics to give us a sense of the organisational heartbeat.”

Clare Swindell, co-CEO of Camelot

3. Check for data blindspots and blurred lines

Once you’ve identified the high-level outcomes that matter, and the questions and metrics that help you tell the performance story around them, you need to make sure you’re not leaving any dangerous gaps or clouding the picture by blurring the lines. That means structuring your data to make sure it covers all the bases, and that nothing is muddled or missing.

Use “mutually exclusive and collectively exhaustive” groupings of metrics to make sure you’re painting the full picture — covering financial and non-financial (such as customer, quality, people), internal and external, forward-looking and backward-looking, for example.

The dashboard should also cover three high-level themes that help the board deliver its remit:

  • Strategy: progress towards long-term aims.
  • Performance: the results achieved in the last period and how well the forward plan is being delivered.
  • Governance: the way in which the organisation’s activity is conducted (some measure of retaining your licence to operate — either regulatory or reputational).

We also recommend keeping data and narrative separate. A dashboard is ideally accompanied by a separate narrative (no longer than three pages) explaining under- or over-performance and the implications for the organisation. This report is typically written by the chief executive and becomes the scene-setter for the board meeting.

Create great management reports with Board Intelligence

Although business dashboards can be very useful, this is only the case when they are designed, built, and implemented appropriately.

Lucia, our revolutionary AI-powered management reporting software, enables organisations to integrate their chosen dashboards right into their board papers. This makes sure the board has access to real-time, well-visualised data. A live view of the business’ performance grants the board easy access to essential insights and helps executives bring their messages to life. To see this in action and find out what good looks like, book a demo of Lucia.

  Lucia   Write great reports, every time    A thinking and writing platform that helps you to write brilliantly clever and  beautiful reports that surface breakthrough insights and spur your business to  action. Find out more

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