If your business is like many we serve, you strive to optimize your business processes, become more effective and efficient, and increase productivity. This is one of the primary reasons companies create dashboards. Dashboards are business performance reporting tools that illustrate information vital to achieving your business goals. Well-designed performance management dashboards serve as a performance measurement vehicle and provide insights into areas where improvements can be made and to direct decisions and future planning. This post identifies 12 pitfalls associated with dashboard development and how to avoid them.

Research by colleague Dr. Koen Pauwels found that “even a small improvement in using analytical dashboards brings an 8% higher Return on Assets on average, and 21% for firms operating in highly competitive industries. However, only 16% of large international companies use marketing analytics and this number is even lower for small and medium-sized firms (SMOs) and for emerging markets.” Vikas Mittal, J. Hugh Liedtke Professor of Management in Marketing at the Jones Graduate School of Business at Rice University, claims that about 40% of the largest U.S.-U.K. companies report efforts to build and use a dashboard.

Depending on the project scope, creating a performance measurement dashboard can take a few months to over a year and cost anywhere from $25,000 to over six figures. In addition to time and money, dashboards take resources – data, tools, and people. Dashboards have implications for your processes. As such, dashboard development is typically a deliberate investment, one in which rework and redoes are costly.

The 12 Most Prevalent Pitfalls of Dashboard Development and How to Avoid Them

There are several factors that can impact the success of developing and deploying an actionable performance measurement dashboard. Here are 12 of the most common and how to avoid them.

1. Culture mismatch. Performance management dashboard efforts are more successful when organizations have a data-driven culture and a culture of accountability. If this is not your culture, odds are the effort will peter out. Instill a passion for data throughout your organization and encourage data literacy for all your employees.

2. Internal misalignment. Effective dashboards provide insight into performance as compared to expected the organizational outcomes. Each function within the organization needs to be aligned to the same outcomes to understand that function’s contribution to, and impact on, the results. Clear, specific business outcomes are the first step to facilitate alignment.

3. Data (lack of and/or poor quality). Building and using a dashboard requires quality data. Do a quick audit of your data, data sources, and data collection methods to make sure your data will support the dashboard design. Maintain a data inventory and keep your insights supply chain in good working order.

4. Overcrowding. It’s tempting, very tempting, to put every measure, metric and KPI you want to track on your dashboard. Don’t. Instead, use logic chains to construct your dashboard. This will ensure measures that are related and connected to results are the basis for your dashboard.

5. Selecting measures that don’t matter and starting with activities. Measures and performance targets are the foundation for quality performance reporting. Start with business results and measurable objectives directly linked to outcomes and work down from there, rather than the other way around. This will help you choose the right metrics for your performance management dashboard and help you avoid a hodgepodge of activity measures.

6. Mixing attribution with performance management. There are a variety of analytical dashboards. Many organizations want to understand which customer touches and channels are the most effective. This is an excellent initiative and the driving force behind attribution models. Attribution and performance management are different, and both are valuable. Do not try to have one dashboard serve both.

Purchase Your Assessment

7. Overly complex. The best dashboards are those that facilitate action. Too many KPIs make consumption and comprehension difficult. Focus on measures that matter and that provide insight into action, measures that you are willing to invest in to achieve improved performance.

8. Automating too soon. Technology can be extraordinarily helpful in automating dashboard production. But too soon and you’re at risk of automating the wrong data pulls and visualizing incorrect data. Approach dashboard development like any development project. Create alpha and beta versions before you jump into technology and have a plan for technology evaluation, selection, and implementation.

9. Getting ahead of your team. People involved in dashboard development are immersed and versed in the effort. The rest of the team are on the periphery. Establish a regular cadence to communicate status and updates. As you move from development to implementation, create and implement training so everyone will understand how to contribute to, and use, the dashboard.

10. No rollout/change management plan. Initiating a performance management dashboard signals change. Employ good change management practices and create a rollout plan to support the change and internal onboarding.

11. Not addressing processes. Dashboards and the work associated with them, in terms of data management, analytics, and reporting, will most likely impact existing processes or require the creation of new ones. Process is at the heart of operational excellence and performance management.

12. Giving up too soon. Performance management dashboards take commitment for the long haul. Like any long-term effort it takes effort to maintain momentum and stay motivated. Stay the course to succeed in developing your dashboard. or improve your success rate by tapping experts.

Make Sure Your Performance Dashboard Delivers

Performance management dashboards have become far more common in organizations of all sizes and in virtually all industry types. With the right measures as the foundation, an effective dashboard can help you better understand (and in some cases even justify) the relationships between the work and associated investment and the financial value. Dashboards focused on performance measurement deliver crucial insights and practical value for guiding better decisions.

Are you at risk of falling into one of the 12 pitfalls of dashboard development? Reach out and see how we can help.