This article is an excerpt from the book Performance Dashboards: Measuring, Monitoring, and Managing Your Business by Wayne W. Eckerson, former Director of Research and Services at The Data Warehousing Institute, a worldwide association of data warehousing and business intelligence professionals.
THE CONTEXT FOR PERFORMANCE DASHBOARDS
The Power of Focus
Executives in Training
This summer I found my 11-year-old son, Harry, and his best pal, Jake, kneeling side by side in our driveway, peering intensely at the pavement. As I walked over to inspect this curious sight, I saw little puffs of smoke rising from their huddle. Each had a magnifying glass and was using it to set fire to clumps of dry grass as well as a few unfortunate ants who had wandered into their makeshift science experiment.
In this boyhood rite of passage, Harry and Jake learned an important lesson that escapes the attention of many organizations today: the power of focus. Light rays normally radiate harmlessly in all directions, bouncing off objects in the atmosphere and the earth’s surface. The boys had discovered, however, that if they focused light rays onto a single point using a magnifying glass, they could generate enough energy to burn just about anything and keep themselves entertained for hours!
By the time Harry and Jake enter the business world (if they do), they will probably have forgotten this simple lesson. They will have become steeped in corporate cultures that excel at losing focus and dissipating energy far and wide. Most organizations have multiple business units, divisions, and departments, each with their own products, strategies, initiatives, applications, and systems to support them. A good portion of these activities are redundant at best and conflicting at worst. The organization as a whole spins off in multiple directions at once without a clear strategy. Changes in leadership, mergers, acquisitions, and reorganizations amplify the chaos.
Organizational Magnifying Glass
To rectify this problem, companies need an “organizational magnifying glass”—something that focuses the work of employees so everyone is going in the same direction. Strong leaders do this. However, even the voice of a charismatic executive is sometimes drowned out by organizational inertia.
Strong leaders need more than just the force of their personality and experience to focus an organization. They need an information system that helps them clearly and concisely communicate key strategies and goals to all employees on a personal basis every day. The system should focus workers on tasks and activities that best advance the organization’s strategies and goals. It should measure performance, reward positive contributions, and align efforts so that workers in every group and level of the organization are marching together toward the same destination.
Performance Management System
In short, what organizations really need is a performance dashboard that translates the organization’s strategy into objectives, metrics, initiatives, and tasks customized to each group and individual in the organization. A performance dashboard is really a performance management system. It communicates strategic objectives and enables business people to measure, monitor, and manage the key activities and processes needed to achieve their goals.