Data-Driven Dashboards: Guiding Your Rocket Ship

“If you’re moving at the speed of light, it’s important to know you’re moving in the right direction.” – Anonymous

In an exponential world, real-time tracking of key parameters is fundamental to your success.

And that’s what Dashboards—the next ExO attribute—are all about. Dashboards reflect critical company and employee metrics and allow for the implementation of short feedback loops. They support the old saying: “what gets measured gets managed.”

Today’s blog will offer 10 steps to help you start using Dashboards in your business.

We’ll begin by looking at one of the most data-driven and successful companies in the world: Amazon.

Let’s dive in…

NOTE: Understanding how to turn your business into an ExO and increase your growth and impact is a key component of my year-round Abundance360 leadership program.

How Amazon Uses Dashboards 

Amazon uses a Dashboard to generate a Weekly Business Report that company leaders spend many hours analyzing. The genesis of this report dates to the very beginning of the company, when founder Jeff Bezos connected a digital bell to the company’s servers and had the computer ring the bell every time a book was sold. The bell was great for morale, but the real reason behind it was that Bezos wanted to track sales.

Today, this feedback loop is the heart of Amazon’s operations. The Weekly Business Report numbers in the hundreds of pages. It shows every imaginable metric regarding the company, with the most important and challenging information bannered at the top.

In light of our upcoming blog on Experimentation, it’s particularly interesting that Amazon executives use the report to monitor the progress of various experiments underway throughout the organization. Based on this information, they narrow down those experiments to one or two huge bets every year.

One of these big bets was Amazon Prime. It had seemed illogical (and like a money loser) when it was originally proposed. With free shipping included in the subscription, why wouldn’t people just buy a toothbrush one day, toothpaste the next day, and floss the day after that? The fulfillment costs would be huge. But experiments showed that Amazon Prime members grouped much bigger purchases than non-members.

On another occasion, Amazon management considered whether to sell disposable diapers, which have almost no margin. To their surprise, they discovered that customers bought more diapers if they didn’t have to go elsewhere to buy them. Our point? Assumptions can often be wrong; testing the product or service is the only way to really know what will work.

Once decisions are made about an experiment, Amazon tracks them constantly through Dashboards. Because of that, staff are guided by the Dashboard as part of their daily work.

Dashboards: Measuring a Company’s External & Internal Environment

Let’s take a look at both external and internal dashboards:

External Dashboards typically present Engagement metrics for early-stage companies and dollar metrics for mature companies. They are made up of company, team, and personal Objectives and Key Results (OKRs). This type of Dashboard also uses “leaderboards” to drive Community behavior and Engagement.

External Engagement Metrics

Here are just a few of the key engagement and growth metrics that ExOs track:

• Monthly Recurring Revenue (MRR): the amount of revenue a company expects to receive each month from its customers.

• Annual Recurring Revenue (ARR): the total amount of recurring revenue a company expects to receive from its customers annually.

• Customer Acquisition Cost (CAC): the cost a company incurs to acquire a new customer.

• Lifetime Value (LTV): the total revenue a company can expect to receive from a single customer over the lifetime of their relationship with the company.

• Burn Rate: the rate at which a company is spending its cash reserves to finance its operations.

• Runway: the length of time that a company can continue to operate with its current cash reserves, given its current burn rate.

• Net Promoter Score (NPS): a measure of customer satisfaction and loyalty, based on how likely customers are to recommend a company’s products or services to others.

• Churn: the rate at which customers stop using a company’s products or services over a given time period.

• Viral Coefficient: measures the rate at which a company’s customers are bringing in new customers through word-of-mouth marketing.

Internal Dashboards, exemplified by OKRs (Objectives and Key Results), are a collaborative goal-setting methodology for teams and individuals to set ambitious goals and track measurable progress in real time. Unlike key performance indicators (KPIs), which are measured at the end of a business cycle, OKRs provide continuous insights into performance. This methodology can be applied to various types of company operations and organizational levels, effectively aligning the entire enterprise on the path to achieving its goals.

Objectives and Key Results (OKRs)

By looking beyond their day-to-day operations and setting Objectives and Key Results, even the most hidebound and traditional companies can break away from their normal operations and pursue the equivalent of MTPs.

Here are some guidelines for creating and managing OKRs:

• OKRs continuously ask, “Where do I want to go?” (Objective) and “How will I know I’m getting there?” (Key Results)

• OKRs are not determined top-down, but bottom-up.

• Objectives are the dream; Key Results are the success criteria of that dream (that is, they are a way to measure incremental progress toward the Objective).

• Objectives are qualitative, and Key Results are quantitative.

• OKRs are not the same as employee evaluations—rather, they are about the company’s goals and how each employee contributes to those goals.

• Instrumenting early and often is key to implementing Dashboards.

• Objectives are ambitious and should stretch those pursuing them.

• Five Objectives and four Key Results per Objective are optimal.

• Key results should see an achievement rate of not more than 60 to 70%. If results are higher, the bar has been set too low.

10 Steps to Start Using Dashboards 

Objectives and Key Results, along with Dashboards, can be incredibly useful tools to help align your team and visualize your progress. Here’s a sequential guide to help your company get started:

1. Educate your team. Begin by explaining the concept of OKRs and the benefits of Dashboards to your team. Make sure everyone understands the purpose, importance, and means by which these tools can contribute to the company’s success.

2. Identify your Objectives. Objectives are high-level organizational goals. Start by identifying your company’s aims and a specific timeframe related to your MTP and Moonshot. Objectives should be qualitative, ambitious, and inspiring.

3. Define key results. For each objective, define between two and five key results. These are specific, measurable outcomes that indicate progress toward the Objective. Remember, Key Results should be quantifiable and achievable and lead to objective grading.

4. Align OKRs. Ensure that the OKRs of different departments or individuals within the organization align with the company’s overall OKRs. This will ensure everyone is working towards the same overarching goals. 

5. Set up your Dashboard. Choose a platform or software that suits your needs for a Dashboard. This could be a business intelligence tool, a project-management system, or even a shared spreadsheet, depending on the complexity of your needs and the size of your team.

6. Integrate data sources. Connect relevant data sources to your Dashboard. These might include financial systems, customer-relationship-management systems, project-management tools, and other data sources relevant to your key results. 

7. Design dashboard layout. Decide on the layout and visualization types (i.e., graphs, charts, or tables) that will best represent your OKRs. Aim for clarity and simplicity.

8. Train your team. Provide training and support to your team on how to use and update the Dashboard. This will ensure that everyone can actively engage with the tool.

9. Regularly review and update your OKRs and Dashboard. This will keep your team focused and informed about progress. Typically, OKRs are set quarterly and reviewed weekly or monthly. 

10. Iterate and improve. Based on the insights gained from regular reviews, adjust your OKRs and refine your Dashboard as necessary. Remember, Dashboards are flexible tools designed to adapt to an ExO’s evolving business needs.

Why This Matters

Future Dashboards will look very different from today’s versions.

Today, 70% of the world’s sensors are currently not networked. Therefore, their data is wasted. “Connected sensors” (i.e., the Internet of Things or IoT) is an important enabling trend to roll out Dashboards to more “traditional” processes.

In 2014, only 2% of the Fortune 500 used OKRs. Today, we estimate that percentage has doubled to just around 4%: big companies have a long way to go.  

Ultimately, as the speed of ExO operations continues to accelerate, we anticipate that there will be no more five-year Strategic Plans with quarterly or annual KPIs. Instead, a company will have an MTP and a one-year operating plan, monitored by real-time Dashboards that will continuously assess whether it’s on track.

In our next blog in this series, we’ll dive into Experimentation: a crucial mechanism for driving breakthroughs in any organization.