IT “dashboards” have become highly seductive to CEOs of midsized companies. Who could resist up-to-date, easy-to-digest information on business performance, and how the team is performing? Not many CEOs. Yet if they knew how long and how much money it will take to install such systems – months and sometimes years – they might think twice. But whether or not companies implement them (and there are good reasons to implement them at the right time), these automated dashboards don’t replace good old-fashioned management techniques.
Consider the case of one home furnishings wholesaler. The CEO knew the sales team wasn’t making enough sales calls. They would come in late, leave early, weren’t turning in their weekly sales reports, and were resting on their laurels. In January 2016, the company decided to install CRM software and integrate it with their sales order system. When it was ready six months later in July, they asked their sales team to start recording sales calls and other notes each day. Most of them balked and didn’t use it, and the sales manager didn’t do much about it.
The CEO decided that he needed to create automated dashboards to prove how few sales calls everyone was making. The dashboards sliced and diced things up by product group and territory and were online by early November. They were excellent. But by this time, most of the year was gone and there was still no improvement in the sales team. Finally, the CEO became upset and directed every sales person to arrive by 8:30 a.m. and not leave before 5:00 p.m.—unless they were going out on a sales call. He also met with the sales team and the sales manager weekly to review their activity. Lo and behold, the sales team started going on sales calls. Demand jumped. While having the CRM and dashboards in place will most certainly be helpful, what created the fastest change was some strong management on the part of the CEO.
Imagine this alternative path: In January, the CEO asks the sales manager to get the team out for more sales calls, sets a target and requires reporting. By the end of February, with no change in behavior, the sales manager is replaced or demoted. The CEO starts managing the sales team more closely and requires the team to be in the office unless they are on sales calls. He sets up a Google spreadsheet where each sales person must list who they visited and the day. He asks questions about the customer meetings in the weekly sales meeting. He also assesses then changes the compensation plan to incent the behavior he wants. By March he gets the step up in performance he sought, six months sooner.
This same story is repeated with dashboards for manufacturing, customer service teams, financials, automated warehouses and virtually every other department. Dashboards and data don’t manage. Managers must manage.
So what’s wrong with automated dashboards?
Setting up data and reporting systems often act as an organizational excuse—allowing us to postpone the act of managing. Such systems also tend to overly weigh financial data, but often don’t supply activity data, marketplace or competitive data, or employee attitudes.
Worse still, automated data, real-time data and dashboards in the wrong hands can:
- decrease the manager’s understanding of the data (they often don’t know where the number comes from and what moves it)
- lessen the manager’s sense of ownership of the data (i.e. it’s accounting’s data), and the level of responsibility they personally feel for bad results
- drop the time the manager spends with the data, digging in and analyzing it—which often produces motivation and insights about how to improve the results
- make us numb to the results by being overly-frequent and ever present. After some period, people stop looking at real-time dashboards.
Don’t think for a minute that I’m a technology Luddite, or don’t value information to support decision making. Some of our highest performing clients use rich data systems with dashboards and awesome drill-down capabilities. But these companies already have a robust management team who drive for results, who have already fixed the obvious problems and now seek further clarity to make even better decisions. It’s a matter of what comes first.
Bolster management first; manual or semi-manual metrics can work just fine.
Create a more disciplined cadence and structure to the way the management team operates. Use currently available systems or manual systems to collect needed information. If better data and reporting truly is critical, start the process simultaneously with stepping up management discipline.
- First clarify which manager is responsible for each priority or key performance indicator (KPI). This may sound basic, but many mid-sized firms aren’t diligent about identifying oneperson who is the responsible party for each priority. I’ll repeat—one person is responsible, not two, not a team, not all of us. There should be a centrally stored document (or set of documents) that memorializes who is responsible for what. Even better, a written action plan should accompany each project, so everyone knows what progress to expect, by when. The same is true for metrics (or KPIs). In our example above, the sales manager was responsible for getting his team into the field. Their lack of performance clearly tracks back to him.
- Even if more accurate metrics might be coming soon, use the best metrics available now. Track them monthly, in a simple graph. Even if the data you have is subject to question (i.e. maybe someone is fudging the data), at least the act of collecting it puts pressure on the performers—which is better than nothing. Some metrics – like how fast the books get closed each month, is a simple matter of recording one date per month. Tracking the number of compliments a customer service firm is receiving just requires the team to note (on a yellow pad, or on a shared Google Doc) whenever it happens, then add it up at the end of the month and report it. Simple.
- Meet as a team monthly to discuss and review the actions being taken to improve performance. If each leader has clear duties and responsibilities, having to show up to a meeting with their peers utilizes peer pressure to encourage better performance. Require managers to come to the meeting with a completed analysis of problems and a plan of action.
- Improve data capture and automate data flows only where better information will pay big dividends. Remember, sometimes just a once a year “snapshot” data collection is easier and more effective than trying to measure things continuously. Of course, beefing up data feeds is most useful to support leaders that are already actively managing.
Don’t be seduced or distracted by the promise of automated dashboards or reporting that can drive your company off the road. Strong leaders can see results more quickly with diligent, disciplined management. Once that’s in place, then look to better data to improve those decisions and drive your company to success.
Blog originally published on Forbes.