Every day a simple signal is generated on Wall Street for CEOs of publicly held companies to let them know how they are doing. That signal is up, down, or unchanged. Unfortunately, many CEOs of privately held companies close the door at the end of the day without any feedback on their performance. They are chasing a market that doesn’t seem to be talking to them. They feel like they are in a black box. And they are.
The nature of the CEO is to capture the market; but the nature of the market—or, more to the point, the customer—is to resist capture through objections and ever-increasing demands for faster, better and cheaper. The term customer loyalty is a misnomer—customers are on the move, and it is up to the CEO to keep up. Yet, it is a lot easier to chase something that you can see, hear, and touch.
Most CEOs of private businesses without good systems and tools in place to win feedback from their customers (other than financial reports or specialized systems that monitor a particular function) are having a difficult time influencing and controlling performance in the eyes of their customers, in good times and bad.
The dashboard is the CEO’s killer app, making the gritty details of a business that are often buried deep within a large organization accessible at a glance to senior executives.S o powerful are the programs that they’re beginning to change the nature of management, from an intuitive art into more of a science. Managers can see key changes in their businesses almost instantaneously — when salespeople falter or quality slides — and take quick, corrective action. For example, at General Electric, James P. Campbell, chief of the Consumer & Industrial division, which makes appliances and lighting products, tracks the number of orders coming in from each customer every day and compares that with targets. “I look at the digital dashboard the first thing in the morning so I have a quick global view of sales and service levels across the organization,” says Campbell. “It’s a key operational tool in our business.”
CEO Dashboards can be a great way to shed light on customers and sales process performance and get feedback on how you as the CEO are performing your role. The problem with most reporting structures in private companies is that they offer the CEO more data than useful information. Imagine a CEO whose $30 million operation was bleeding badly. He knew he was in trouble because the financial reports clearly showed several service lines where expenses were exceeding revenues. Unfortunately, those reports had offered no early warning, so now he was reacting to something that was already a serious problem; moreover, the balance sheet gave no indications about where the problem might be. When driving, an early indicator of, say, low fuel is useful so that one can obtain fuel rather than wait for the car to suddenly come to a stop. It’s also nice to know that you need gas, and not an oil change. Otherwise, to diagnose the problem can take time away from solving the specific issue that’s dampening performance.
A CEO dashboard can offer the CEO information, in context, regarding the performance of a crucial area of the business system, flagging trouble before the problem fully matures. Context is easily established around a business process once the steps of the process are understood along with their cause-and-effect relationship on each other and on other areas of the business.
Let’s take a sales process as an example. Most CEOs find out that sales performance is not where it needs to be at the end of the quarter or the year. By using a dashboard to monitor the key performance determinants in their sales process, they could have known much earlier—when something could actually have been done to resolve the issue. All of your sales come from opportunities, and all of those opportunities come from the people who know you. The audience of people who don’t know you, but could use your services, is larger than the audience of people who know you and are actually using your services. A good early dashboard indicator of what your sales are going to look like at the end of the year is how many new people are inquiring about your products and services right now.
Private companies will always focus on a percentage increase to the sales plan of, say, 40%, but they will often never detail how they plan to increase inquiries by a multiple of that number. Yet they are surprised late in the game that they are going to miss the sales target for the business. A good CEO dashboard should map different areas of performance in relation to one another. In a sales-process dashboard, many companies use Goldmine, ACT, or Salesforce.com to track their proposal pipeline, appointment levels, or phone call activity; but these are late-term indicators of sales process performance. They typically are where the least amount of throughput exists, and also in many ways the least amount of leverage to improve it. This is to say that if you don’t have enough prospective deals, then even if you close most of them you will still not be where you want to be. So while these systems are good at bringing visibility to the sales management challenge, they are not good monitors of how your sales process will perform because they only account for the late phases of the process.
In building your own dashboard, ask yourself, who are your audiences for this information? Who needs to know and how will they use it? For example, your dashboard should include information you will share with the Board of Directors as well as operating departments. Before the magic can happen, the groundwork must be laid. Don’t just implement a dashboard because it’s the newest thing coming down the line. First, do your homework. Understand the organization’s goals and objectives, and define the business drivers. Then, develop and install a few simple, understandable metrics. Continue to adapt the dashboard to the organization’s needs, replacing or adding metrics and features as needed. Always keep the dashboard agile and easy to work with. It should be a plate filled with only the choicest bites, never a smorgasbord.