7 Sep, 2019
Data is a powerful tool. With the right information, we can make smart, strategic decisions based on solid facts. When it’s used effectively, data fuels business growth and improves performance.
For data reporting to be truly useful, it needs to do more than simply present the facts. Human beings don’t generally think in terms of data points and trend lines – we need a story.
That same innate human need is true for business owners. We need something that can take the data and build a compelling story – presenting information in a way that is easy to read, understand and interpret.
That’s where performance dashboards come in.
What are performance dashboards?
Performance dashboards are visual information management tools that display business data such as metrics and key performance indicators (KPIs) to monitor business health and support the decision-making process.
Engaging performance dashboards will capture an audience, communicate the story within the numbers, and provide meaningful insights and recommendations.
Performance dashboards also offer a central location to monitor and analyse business performance. And they track multiple data sources - showing trends, patterns and problems at a glance. They are the storytellers of your business journey.
Why use a performance dashboard?
According to research by neuroscientists at MIT, the human brain can process entire images that the eye sees for as little as 13 milliseconds. The research shows that the meaning of an image can be obtained even when an image is mixed up in a sequence of six to twelve images displayed for 13 milliseconds each — a rate of about 75 frames a second.
Performance dashboards take advantage of this preference for visual information, by turning raw data into visual insights. Good performance dashboards do more than just paint a pretty picture.
We all know how painstaking and frustrating it can be to create charts and visualisations that actually look good and are easy to read using spreadsheets. Good performance dashboards make the process as quick and easy as possible. They also connect with existing files, services and APIs to automatically create dynamic reports, allowing you to customise them to display what’s most important.
Good performance dashboards show up-to-date information –you’ll spend less time analysing and reporting data and more time making decisions and taking action.
And because your performance dashboard will be automated, there’s less room for human error and misrepresentation of the numbers.
How to create a winning performance dashboard
If you want to create a performance dashboard that will actually provide useful insights, you may need to dedicate a little time to planning.
Dashboard planning in three steps
Step one: know your audience
Before you start creating your visual story, it helps to understand a little bit about who’ll be engaging with that story. Who is your audience – is it other stakeholders in your company, or is it your clients who rely on you for their business insights?
- How do they like to view charts and visuals?
- Are they detail focused or do they need the bigger picture?
- What data will be most important to them?
Keeping the user at the centre of your dashboard planning will help you create a visual story that speaks to their needs and desires.
Step two: understand the data and metrics you want to display
Knowing exactly what data needs to go into your performance dashboard before you start creating it will save you a bunch of time in the long run.
- Selecting the right metrics and KPIs for your business.
- Comparing against budget, target, prior period, same period last year.
- What’s the right timeline for telling a story about these metrics – is it yearly, quarterly or monthly?
Step three: build the dashboard to fit the story
What story do you want to tell with your data?
Every story needs a beginning, middle, and an end. For you, the end is most important – what do you want your audience to think about? Do you want to make recommendations or help the audience make a decision?
Think about how you can take them through a journey from the current state to a future action.
Performance dashboard tips
- Use the right visual for the job. Choosing the right visual for the data you need to display is essential. Pie charts are good for displaying data as it compares to a whole. Bar charts are great for comparing data in discrete categories. Line charts are best for showing progression of data over a variable like money or time. Other choices include scatter graphs, tables and pictograms.
- Ensure data is up-to-date. Up-to-date data and insights allow you to make quicker decisions and respond to events that are happening in the moment. When it comes to business, there’s nothing more powerful than that.
- Use colour. Colour engages, delights, highlights, and evokes mood and feeling. Research has shown that colour has a huge role to play in how visuals are interpreted and judged. What’s more, effective use of colour can increase attention span and recall. Colour is a great tool to help you tell your story.
- Use different time scales. Don’t be afraid to use different time scales to tell your story. Exploring how data changes over different periods of time can help the audience follow the journey from past to present to future. But remember, keep the audience in mind and ensure your choice is the best fit for them, not you!
- Ensure the data is actionable. Good performance dashboards don’t just paint a pretty picture. To be truly effective, your dashboard needs to highlight actions, decisions and recommendations.
Performance dashboard don’ts
- Provide too much detail. With so much data coming at you all the time, it can be hard to pinpoint exactly what’s important. Including too much detail dilutes the critical message. Focus on the data that helps to tell the story and highlights what your audience wants to know – and avoid “analysis paralysis”.
- Provide too little detail. On the other hand, providing too little data will leave your audience with questions. You want to tell the full story without drowning the audience in data.
- Provide metrics that don’t matter. It’s easy to get excited about stories in the data you find interesting. But that might not be the same data that’s important to your audience or the story you’re trying to tell. If you’re not adding to the story, you’re taking from it. Keep your story focused.
- Assume the audience knows your jargon and acronyms. The entire goal of your performance dashboard is to build an understanding with your audience. By using jargon and complicated language, you frustrate your own efforts. Wherever possible, use plain simple language, define terms and spell out acronyms.
How good performance dashboards improve performance
Good performance dashboards save you time, money and energy on painstaking data analysis work. This frees you up to make decisions and take action based on insights the data provides.
Good performance dashboards provide a window into the success and performance of the numbers. Done right, performance dashboards breathe life into the data that drives your business. They show you where your business is performing well, where you can improve and the steps you can take to achieve success.
Advisors and SMBs can use Fathom to create their own performance dashboards
Savvy advisors and SMBs are using Fathom’s flexible Report Editor to create fully custom reports and dashboards without needing to purchase additional dashboarding software. Fathom provides users with the tools to create completely personalised, relevant and unique dashboards. Every element of a dashboard can be customised or left unchanged.The dashboards created in Fathom are optimised for both screen and print.
- Use the right visual for the job and the audience
- Make the data real-time
- Don’t use jargon or acronyms
- Play with colour and different time scales
- Ensure the data is actionable
And you’ll be well on your way to creating valuable performance dashboards.
Written by Fathom
Fathom is a cloud-based financial intelligence and management reporting app trusted by more than 50,000 companies worldwide.