Business leaders often struggle with making KPIs meaningful and also how to make sense of their dashboards. KPIs have to be linked to strategy, the results we want to achieve. Dashboards have to be user friendly, which essentially means answering three questions (1) what is performance doing, (2) why, (3) and what now?
The Bayside CPA Discussion group were looking for someone to speak at one of the continuing professional development evenings on “KPIs and Dashboards”.
In talking with Ross Pollock about their requirements, they felt that their group were struggling with how to best use KPIs. And how they alert some of their business leaders (either as clients or line management) to how to develop KPIs that were more meaningful for their business. Additionally, they were seeing a lot of businesses using dashboards, but these management tools were not really adding much value to the business.
Based on these requirement I put together an evening that would attempt to address these challenges, and provide their members with some insights and techniques that would help them achieve better outcomes.
After a brief introduction, I asked the group to discuss their biggest challenges with KPIs and Dashboards, and then we collected these challenges together on a whiteboard. A key theme was about influencing business leaders to see that some of their “pet KPIs” don’t add much value, and that business leaders are using dashboards in a way that causes knee-jerk type reactions in the business rather than deliberate analysis of what was happening. (Read more on the usage of KPIs)
Getting the structure right for your measurement framework
I presented on overview of the eight steps of PuMP and then a quick look into how we use Measurable Results as the translation of strategy, and the focus points for the business.
From there it was about the Measure Design technique. These two Steps of PuMP are crucial for the reframe on KPIs that is needed. Measures need to give us feedback on our results, not get a life of their own.
these results and measures will for the basis of your measurement framework.
Dashboards
A look into dashboards demonstrated that the typical dials and gauges don’t really help. Particularly, in terms of interpreting what is happening with performance. Instead, dashboards should be able to quickly tell us what has happened (in terms of progress towards out results). Then why that happened/cause (if anything) and what next (response, which might be “continue to monitor”.
For example:
Example of a useful dashboard. One that informs dashboard users (manager and leaders) about what performance is doing (left hand columns). Then why (cause) and then how to respond.
Read more about what makes a good KPI methodology here and about how to make you KPIs meaningful. More information about PuMP here on this page.
Speaking testimonial
The group were kind enough to provide me with a testimonial.
The CPA Bayside Discussion Group draws on members from Brisbane city through the south west and Redlands. Our diverse membership base represents CPAs from business , government and not for profit sectors. Building on our 2017 theme of “The future of accounting and what makes a good operator”, we were looking at ways that we could make the rather challenging task of drafting and presenting KPIs and dashboards more meaningful as financial reporting continues to move towards the visual, shying away from sometimes long narratives which accountants have been renowned to write.
Mark was recommended to us by CPA Brisbane office. Mark delivered an insightful and thought provoking presentation to our group, turning some of our ideas upside down. Even though we had 42 members attending, Mark was able to make the presentation engaging and tailored to our needs by asking what the biggest struggles were with KPIs and dashboards initially and then addressed these concerns through his presentation. At the end of the presentation we felt that Mark had provided us with a lot of key insights, and practical techniques and tools to make our KPIs and dashboard far more meaningful.
Did Mark’s presentation meet the criteria of our 2017 theme? Yes! and member feedback was that we invite Mark back in early 2018.
Wendy Angliss and Ross Pollock CPA Bayside Discussion Group