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The most important dashboard in an organization is the one on the CEO’s mobile phone or desktop. Other dashboards may provide insight into critical issues: financial health, marketing spend, operational efficiency, customer satisfaction and much more.
But the CEO’s dashboard tells the story of the company’s business model.
The key performance indicators here are vital signs that indicate how well the business model itself is functioning – and they provide predictive and actionable insights into future challenges and growth.
This article provides a five-point sanity check for your own CEO dashboard. Lock the door, hold your calls, and open up your current dashboard.
Let’s take a sober, 5-point inspection to see if the tool you are currently using truly gives you the necessary perspective on your business.
#1 Are Your Vital Signs Actually Vital?
No matter where you go in the world, a visit to the doctor starts with the same critical measurements: blood pressure, weight, sugar and oxygen levels, blood work. It is not even uncommon for a doctor to inquire about psychological well-being, if subtly. They know what to look for first.
Your dashboard should provide this same “vital sign” approach to your business model. It should show you where your organization is healthy and where it might be getting sick.
The KPIs on your dashboard should be so closely aligned to the structure of your business that they can be used to “prove” its health or wellness.
If the measurements on your dashboard are extraneous to this, they shouldn’t be there. If you measure too much, you measure nothing.
A useful exercise is to imagine your business going sideways. Mentally break it.
Explore a failing value proposition, channel breakdowns, employee dissatisfaction, angry partners, AR nightmares, and more. Would your current dashboard show you – in advance – that there’s something amiss?
Now imagine your business thriving. Mentally grow it.
What current indicators would show you – in advance of revenue impact – that you are both growing and healthy.
Are there KPIs on your dashboard that are extraneous to both failure and threat?
- Are your vital signs actually vital?
- Do you have KPIs that aren’t related to the function of the business model?
- Are there KPIs that wouldn’t budge with either success or failure?
- Would historical problems have been visible with your current dashboard?
#2 Build KPIs on Causes, not Effects
On your CEO dashboard, focus on your business model. Too often there is an overkill on financials. Focus on causes not effects. You can only control the former.
Your business model embodies the mechanics of your value proposition. It describes the parts of your system that produce value and highlights the key relationships, activities and resources required to deliver that value.
A dashboard with the effects of your activity only shows you a story of the past. You can have great revenues and margins and still be sick. It’s necessary to have actionable insights into the levers of value creation and the causes of friction in relationships, costs, and more.
You work in a landscape of constant and ever-increasing disruption. Don’t busy your executive dashboard with instrumentation that doesn’t show you the one thing you own alone as CEO: the power and trade-offs of your business model.
- Does your dashboard provide you with predictive, actionable insight into your business model?
- Do you have KPIs that are solely focused on financial outcomes?
- Do you have measures that generate strong feelings – but provide no route to clear actions?
#3 Measure the Value and Friction in Your Business Model’s Relationships
A well-constructed business model conceptually describes how value is created for customers, employees, channel partners and, in some cases, vendors.
But a business model is only as healthy as the value it creates in human relationships. Customers leave. Employees leave. Partners get frustrated and quit. Sooner or later everyone votes with their feet.
And when there are people problems, there are business model problems.
Does your current dashboard give you insight into the health of your relationships?
Can you measure the inherent friction points in these relationships?
- Does your dashboard show the health of the relationships in your business model?
- Have you paid enough historical attention to relationships to have them included in your current dashboard?
- If not, why not? Haven’t relationship problems already impacted the health of your business?
#4 Align Your Value Proposition to Your Relationships
As CEO, you own the value propositions for customers, employees and partners.
In absence of a clearly defined value proposition for these relationships, a marketing department might invent something on your behalf.
Most company websites contain generic value proposition language around customers and employees. These descriptions are often barely recognizable to the parties involved. These generic descriptions obscure the real value in the relationships you do have.
But real relationships and true differentiating value come with trade-offs. Business models need to account for these trade-offs and the friction they generate.
Do your website descriptions of customer and employee value pass your own sniff test for accuracy?
Most importantly, do your customers, employees and partners agree with the value proposition you describe? Do they care about the problem you say you’re solving for them? Or do you provide some hidden value that you may not even be measuring?
The key point here is to identify relationship value and friction directly from the parties involved – and then monitor and maximize it.
And are you currently listening closely – and frequently – enough to measure your relationships on your current CEO dashboard?
- Do your KPIs speak to value from the point of view of your customer, your employee, your partner?
- Do your website descriptions of value pass the sniff test?
- Are you clear on the value you create – and don’t create – in your organizational relationships?
#5 Can You Explain Your Business Model to Your Rank and File
As the CEO, you own the entire business model: its structure, its tradeoffs, its innovations, its differentiated activities.
It is your burden and, hopefully, delight to evangelize the value your model creates through relationships, processes and systems.
It is the story of your business.
When this story is told well – and often – even your rank and file employees can describe it back to you. Everyone “gets it.
Only when there is alignment on how the organization creates value (and friction) can there be alignment on the KPIs to measure it.
Without clarity on what really matters, every team member pulls in the direction of their immediate concerns. Which is why a CEO dashboard created by committee can be such a squandered opportunity.
So, here’s a final set of questions for you. For these you don’t even need to look at your current dashboard.
- Right now, if somebody asked, could you describe your business model on a single whiteboard?
- Similarly, if you asked your top managers to describe your business model, would you be satisfied with what you hear? Is it worth checking?
- Or do you need more time to help develop and tell your story?
In short, building actionable and effective executive dashboards has never been easy, but a strict focus on the function of the business model will help guide the process and ensure the data investment has a tangible return.
Other relevant SmartData Collective Business Model Articles:
BCG’s Value Creators Report Shows How Software Is Driving New Business Models