The key success factors for an effective performance dashboard include proper definition of target audiences and relevant metrics, simplicity and manageability of the dashboard, and sustained leadership through a "dashboard champion." A study of over 30 organizations found that dashboards are most effective when they have a few clearly defined metrics aligned with business objectives, support from executive leadership, and maintain a simple design that is easy to implement and use. Microsoft Excel was the most commonly used tool for dashboard development due to its accessibility, low cost, and ability to produce quick results.

1. Key Success Factors for a
Performance Dashboard
by Tom Kawamoto, Compass AmericaMonday, July 16, 2007
by Tom Kawamoto and Bob Mathers, Compass America
Summary: The keys to an effective dashboard initiative include proper
definition of target audiences, well-designed metrics, simplicity, manageability
and sustained leadership through a dashboard champion.
Performance dashboards are a commonly used management tool to gauge
performance and progress toward business goals. Dashboards can be
designed and developed to address a wide range of objectives, from
monitoring the viability of a global organization's business strategy, to keeping
a check on a department's ability to achieve service-level targets.
Despite their ubiquitous presence in business, dashboards can be difficult to
design and implement, and often fail to achieve their objectives. Common
problems include misalignment of dashboards with business goals, unrealistic
or poorly defined objectives and organizational issues affecting design and
implementation.
How can a business ensure that a dashboard meets expectations? Broadly
speaking, the keys to an effective dashboard initiative include proper definition
of target audiences and design of metrics, simplicity and manageability, and
sustained leadership through a dashboard "champion." But meeting these
criteria can be easier said than done.
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Late last year, Compass analyzed dashboard initiatives at more than 30
global organizations in a wide range of industry sectors, including financial
services, manufacturing, retail banking, pharmaceuticals, food services,
utilities and logistics. Most of the organizations involved in the analysis are
headquartered in North America; firms based in the United Kingdom,
Germany, Australia and Spain were included.
In addition to reviewing the objectives and results of the initiatives, Compass
conducted detailed interviews to assess what major stakeholders defined as
the key success factors of their dashboard engagements. It is worth noting

2. that these criteria represent what stakeholders believe should characterize an
effective dashboard, rather than what actually characterized the particular
initiative in question.
Key Success Factors: Observations
Ease and speed of implementation were identified as key success factors;
respondents indicated that a dashboard should be easily designed with a
minimum of effort. Beginning with the basics and a logical structure that
quickly delivers results was seen as more effective than developing complex
metrics trees.
Another key was defining metrics in relevant business terms that are
meaningful to stakeholders; that deliver a mix of operational, financial and
project -specific information; and that enable a repeatable review process.
Respondents also cited the dashboard's use as a facilitative management tool
as essential. Rather than merely providing a report card on performance, the
dashboard should generate actions toward specific goals.
Finally, the study participants emphasized that a dashboard should enable an
iterative approach and be an "evolving" document that changes over time in
response to new business conditions. This characteristic was also identified
as one of the most difficult to achieve.
Tactical Dashboards Predominate
Compass defines four different levels of performance dashboards:
 CEO/board level, comprised of about six high-level metrics;
 Corporate vice president/director level, between 12 and 20 metrics;
 IT strategic level, similar to above, but focused on IT; range of metrics, between 12
and 50; and
 IT operational dashboards, commonly about 20 metrics each.
Of the dashboard initiatives examined, the majority (66 percent) were
implemented for tactical or monitoring purposes within departments or for

3. specific projects and operational areas. At the intermediate strategic level,
dashboard initiatives were used to facilitate communication between IT
departments and business units, to increase transparency of operations, to
demonstrate innovation and to monitor external service providers.
Compass also observed a few instances of strategic, enterprise-wide
dashboards. In most cases, strategic dashboards were deployed by
organizations that have a culture of using dashboards in general. In addition,
the strategic dashboards often evolve from established tactical initiatives.
The analysis focused on why strategic dashboards appeared to be so difficult
to create and maintain. The most common reason cited is the challenge
associated with defining metrics that address desired strategic objectives such
as governance, ROI, knowledge management and internal cost of quality.
Tools Used in Dashboard Development
The analysis of dashboards focused on the tools used in creating the
initiatives. The basic criteria most commonly applied to tool selection were
utility (a tool that gets the job done) and the ability to create a framework that
communicates basic findings at minimal expense. Given the focus on
timeliness, most participants sought a tool that could deliver results in a
reasonable time frame so that the project would not lose momentum and so
that team members would stay focused and enthusiastic.
Although more than 50 software products are available, Microsoft Excel was
the most commonly used tool to develop performance dashboards,
accounting for close to three-quarters of the projects analyzed. In many
respects, Excel met the criteria of implementing a dashboard initiative that is
simple to design and that delivers results within a short time frame. Excel
meets that standard as a readily available, nonproprietary solution that doesn't
require a developer and that most team members are likely to be familiar with.
Excel is also an ideal tool for a dashboard team seeking to implement a proof
of concept, produce results quickly and tightly control expenses.
It's interesting to note that none of the stakeholders interviewed cited software
tools as a critical success factor for an effective dashboard, suggesting the
importance of focusing on business objectives rather than tactical issues such

4. as tools. In other words, the dashboard analysis demonstrated the folly of
putting the cart before the horse.
Three Keys to Developing an Effective Dashboard
Based on the review of dashboard engagements and stakeholder interviews,
Compass defined a set of three guidelines to establish priorities when
designing and implementing an effective dashboard initiative.
Proper metrics. An initial focus on business objectives enables definition of
appropriate metrics - those that are meaningful to stakeholders and to the
business. Effective metrics measure results in terms of defining action and
improvement, rather than merely monitoring performance. A focus on defining
proper metrics at the outset also avoids the problem of allowing available data
or tools - rather than business objectives - to drive the process, rendering the
initiative irrelevant to performance issues. By selecting a few key metrics to
begin with, organizations can secure initial successes and add more strategic
elements and complexity. As described, Excel is often an ideal tool for
beginning a dashboard initiative; as the program evolves, a more
sophisticated tool can be considered.
Executive support. Dashboard initiatives need a champion - a relatively
senior executive who understands business challenges and wields sufficient
authority to make things happen. Senior executives must stay involved to
keep the initiative on the front burner. In many cases, initiatives start with
great fanfare but then focus shifts to other priorities and teams lose interest.
Without ongoing high-level sponsorship, dashboards risk fading into obscurity
and irrelevance.
Simplicity. Dashboards should be easy to implement and use, actionable and
provide a mix of operational, financial and project-specific information. While a
"start small" approach is advisable, strategic dashboards that measure IT's
contribution to business operations remain the holy grail of performance
measurement and should be pursued. Dashboard initiatives often fail because
of unrealistic expectations, lack of support and lack of relevance. Patience,
planning and perspective are essential.
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