Doug Kreitzberg

Death by Dashboard

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Two years ago, I had all the operations in my business put together dashboards — metrics on many aspects of our business (from sales calls to retention) — that could help us understand what was working and not working before we saw the results in our P&Ls. Since then, the dashboards have been extremely helpful in focusing our attention and adding more energy and resources where needed.

But dashboards, as helpful as they might be, are no substitute for thinking broadly. Dashboards (or metrics, or formulas or whatever set of tools you have which measures your business) are constructed based on your business model, your knowledge of the model and your ability to gather data with respects to that model as it exists today. Dashboards do not discriminate between good or bad models; they simply describe it.

And what they describe are the hundreds of critical tasks that managers and employees need to pay attention to every day. These are the “Critical but not Important” tasks Stephen Covey writes about. You can’t ignore them. They need to be done. However, these tasks may not be the ones needed to deal with something unforeseen or to exploit the next new opportunity.

Most financial dashboards did not describe the financial collapse of 2008 because they were not built to describe it — it was not in their models. Likewise, many health insurance brokers are scrambling to define themselves in the new world of Health Care Reform; a world in which the old dashboards did not anticipate.

Clay Shirky writes in his blogpost “The Collapse of Complex Business Models”, that businesses begin to fail when they become too complex to deal with changing realities. I actually think it’s simpler than that. Businesses (or individuals) begin to fail when they misread the processes and metrics used to describe the success of their model for the world itself. They fail when they focus too much inward. If complexity is an issue, it’s an issue if it impedes the ability to communicate with (and receive communication from) the world outside the model. It doesn’t matter if you’re AT&T or the florist on the corner. If you’re not paying attention to how people are buying and how their buying activities are beginning to change, your business will suffer.

Don’t get me wrong. Dashboards are important; they are good at telling you whether a process is on track or not. But they can’t be confused — and they often are — as an accurate forecast tool to predict how your business overall will fare in the future. A dashboard is no substitute for strategy. Dashboards are linear, specific, measurable. The world is nonlinear, chaotic, and challenging to determine ahead of time which cause will lead to which effect.

The key is to do what is critical, but raise your eyes to look over the dashboard and really look around you. Leave time to play around with what the world tells you is important. And “play” is the operative word, because if you want to predict something which cannot be predicted, you’ll have to make up a lot of stuff (and test them out in your make-believe world) as you go along.

Five Easy Steps to Grow Your Company

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In a recent post at techcrunch.com, Sarah Lacy mused on whether execution is more important than vision.  The vast majority of comments testified to the fact that execution (getting things done) is more important than vision (having the idea).  In fact, the business world is littered with failed companies that had great ideas and successful copies which managed to take other’s great ideas and actually get something accomplished.

At the same time, knowing what and when to execute is perhaps even more important than the execution itself.  I can do a great job getting things done, but if they aren’t the right things, then I’ve wasted my time and getting better at executing won’t matter.

When any company is challenged with growth, managers typically think that they need to overhaul their entire strategy and come up with a new vision or they just need to work harder at what they’re already doing.  In certain cases the managers might be correct, but I would argue those are the exceptions rather than the rule. Both actions are stressful, demoralizing and typically unsuccessful.  The better way is not to overthink vision or execution.  It’s to look at your business, find what’s working and do more of it.  It’s that easy and can be done if you follow these five steps:

One: Know what drives your business

If you are not growing today, you need to change what you are doing. But you can’t change what you are doing if you don’t know where you are.  That is why having clear visibility into the metrics that really drive your business is so important.  Don’t focus on the P&L — they only show lagging indicators.  Try to measure and look at the activities that generate your P&L; # of sales calls, campaign conversion rates, time to answer, etc.  Create your own business dashboard of the metrics you think are important and track them for a few months. Look to see what is really driving your business, what helps or prevents growth.

Two:  Find Out Where the Growth Is

As you begin to look at your business through your dashboard, you will begin to see where there are opportunities for growth in your business.  It might be a producer who consistently makes x number of calls, or a market segment which seems to like your products / services more than others. Don’t worry if the growth is small, think of it as finding a small speck of gold in a sifting pan.  It might be small, but it tells you where to keep looking.

Three: Expand Your Growth Target

Once you’ve identified a couple of areas in which growth already exists in your company, you need to think about how to better leverage those areas so that it becomes more of a meaningful part of the organization.  Do you expand the geography?  Do you need more producers?  Do you redevelop a training program based on the actions of one producer? Do you apply what you’re doing to other market segments?  The key is to enlarge the strike zone so that you have more opportunities to be successful.

Four: Execute on what works — but on a larger scale

So you know where the growth is and you’ve expanded your target area.  Now, it’s just a matter of executing on a larger scale.  It may require more producers, more marketing campaigns, more developers, better training programs, talent upgrades.  Develop a game plan to increase / adjust resources  which account for cashflow and/or profitability considerations (obviously, you may not be able to do everything at once; capital requirements may require your plan to be staged over time.) This is where the action takes place and this is where you might think things get hairy.  And, of course there are always pitfalls, but the best part is that you’ve done it before.  That takes the stress out and, without stress, the game slows down and things do get easy.

Five:  See What Works and Adjust

Of course, you can’t just sit back and relax while the growth curves up.  You need to continue to monitor your activity and the results to see if your actions continue to generate the growth you expected.  If you see things going in a different direction, adjust (sooner than later), and see if it works.

With a few exceptions, growth does not have to terribly difficult. It simply requires knowing your business, expanding on what already works and having the persistence it takes to do the little things that make big things happen.