PERCENTIX BLOG

Dashboards vs. Windshields

Let's do a test, the next time you're going somewhere in your car, get in (be sure to buckle-up, as I can almost guarantee an accident with this test) and try to get where you're going by ONLY looking at the dashboard.  Don't look at the rear-view mirror, your side-mirrors or the windshield.  Crazy, right?  But this is exactly what many of the organizations try to do when it comes to understanding their performance.  Leading organizations need to have dashboards but they also need to leverage the other tools at their disposal to effectively navigate their way to the future.

So, if we keep with the car analogy, what are the tools that leading businesses can use to measure and improve performance?

Windshields = Strategic & Annual Plans - Do you have a strategic plan?  If so, when was the last time it was updated?  Do you look at it throughout the year?  Does it map out the economic and competitive landscape?  Does it include feedback from your current customers and clients and (maybe more importantly) prospective customers and clients?  The strategic plan, when done right, gives your organization insight into where you're trying to go AND through economic, competitive and customer analysis what the possible road-blocks may be on the way.  I've worked with hundreds of clients over the past ten years and the ones that stand-out as exceptional had well-defined strategic plans that were tightly integrated with their annual planning cycles.  This takes a commitment to understanding more than just your business but also that of your competition and economic factors that can influence your future.  Not an easy task, to be sure, but can help your organization avoid "head on collisions".

Rear-View Mirrors = Reports (Customer-Centric) - I'm sure you've all heard the line in bank commercials: "Past performance is not a predictor of future returns".  A tautology if I've ever heard one, but past performance can be indication of the trend future returns are likely to have if no changes are made (internal or external).  Understanding the Voice of the Customer (VOC) is probably the single best predictor of future returns there is.  What I've found is that many organizations either don't know who their target customer is and/or have a hard time determining how to start a conversation with their existing and potential customers.  Reports showing your to current customers over the past 1, 2 and 5 years as well as your backlog, by customer, and pipeline, by customer, are invaluable in understanding where you've come from.  Take the time to analyze why the road was smooth at times (high order volume and/or margins) and why it was rough at times (low order volume and/or margins).  When you understand why your customers are selecting you and why your competitors customers aren't you'll have a much better idea of how to better serve your target market.

Side-View Mirror = Market Research - Does your organization have a way to educate both senior executives and departmental mangers on the external and competitive landscape?  If you don't there's a good chance decisions are being made that are almost exclusively based on internal factors.  Marketing and/or Finance is usually best suited to get this "peripheral" information.  When you have a good understanding of the economic (finance) and competitive (marketing) landscape, it's much easier to back around corners or understand who's coming up alongside of you in the marketplace.

Dashboards = Dashboards & Analytics - And so we come to the subject of this blog, the dashboard.  Dashboards provide a way to combine internal AND external information but primarily show the internal workings of an organization.  Fuel (cash), speed (bookings, billings and backlog) and other indicators by function such as finance, human resources and operations are the standard dashboards components in most organizations.  When you combine your strategic and annual plan data with external data such as financials from your publicly traded competitors and external economic factors, the dashboards get a lot more interesting, and useful.  Again, past performance is not an indicator of future returns but when combined with the windshield and the mirrors you get a more-complete picture of your surroundings.

I'm not telling most of you who are reading this anything new but I hope I'm stimulating some discussions on how your organization is "driving" toward the future.  In short I hope your organization:

1. Has a strategic and tactical plan
2. Knows who your clients/customers really are
3. Knows what your clients/customers really want
4. Knows something about the economic environment you're operating in
5. Can provide the above information to decision makers in a timely and accurate manner

I can't promise an accident-free trip but I can promise you'll enjoy the ride a lot more!

One final note, if you do actually try this experiment in your car, I take no responsibility for any damages incurred to you, your property or others during the course of the experiment...