Guest blog by Mike George, Business Systems Analyst at Toast
Don’t over-serve your executive team.
We like to think we’re data-driven. To support that belief, we tend to gather as much data as possible — because more data equals more insights, right? Don’t give yourself a pat on the back just yet. With more data than ever before at our fingertips, we’re at risk of creating cluttered dashboards and wasting our time on the wrong numbers. To prevent a data overload, you’ll have to hone in on the 1% of data that actually matters.
Remove the noise. Let’s say you’re building a dashboard for a quarterly metrics review with the management team. Your first instinct may be to take every data point you can find and cram it into one page. I’m sure your teammates will be impressed with the number crunching but that’s like taking every ingredient in your kitchen and throwing it in a blender and expecting it to taste good. I once came across a blog post along the lines of “100 sales metrics everyone should track.” It’s impossible to focus or be productive with all that noise, so try to keep it simple. To quote the designer John Maeda, “simplicity is about subtracting the obvious and adding the meaningful.” Including data just because it exists will cause you to overvalue what’s easy to measure.
How to pick the metrics that matter
In medicine, there is a set of vital signs that indicate the health of critical functions in the human body. For your sales team, one of your “vitals” might be booked revenue. You should always track the pulse of your vitals in case they dip, but don’t expect them to give you actionable insights. A doctor won’t be able to make a diagnosis based on your vitals alone.
For your metrics meeting, skip over the vitals quickly unless you spot one that’s out of band. Instead, spend most of your time on the metrics that answer a business question, or are going to invoke a change in behavior (e.g. what types of deals should we focus on?). After the meeting, reflect on which metrics drove productive conversations. For the metrics that resulted in awkward silences, scrap them next quarter, as they were either not digestible or not insightful.
Metrics come in pairs. At a high level, it’s possible to measure the performance of a team with just two complementary metrics. Like pairing wine with cheese, it’s all about balance. For example, you could have one for quantity and and one for quality. For a customer support org, it may be agent productivity versus customer satisfaction rating. For sales and marketing, if one your quantity metrics is total leads created, you don’t want people creating junky leads just to hit their number. To encourage the right behavior, pair the leads created number with win rate. Another example of complementary metrics is CAC (customer acquisition costs) and LTV (customer lifetime value), which balance spend and revenue.
Know your audience. For the finance team, revenue-based metrics like CAC are appropriate, but for front-line team members, it’s more desirable to supply reports that expose tangible metrics where they can see the impact of their own contributions. Think of building dashboards like a map, where scale is key. As you present to higher levels of management, imagine you are hitting the minus icon in Google Maps to zoom out. Granular details and labels fade away in favor of large scale features. For example, when an executive views the dashboard it should be broken down by region, but for a regional manager, it should be broken down by rep.
The ultimate dashboards are interactive, allowing executives to zoom in and out at various scales. If you paste a chart into a static PowerPoint, you’re effectively putting up wall that prevents anyone who may have follow up questions from being able to drill in a layer deeper. There’s nothing better then going on a data journey where one question leads to another and, together, eventually you land on an “aha” moment!