How to create a KPI dashboard
Creating a KPI dashboard is an iterative process that requires a bit of thought. It’s one thing to know you want to monitor key performance indicators (KPIs) on a dashboard; it’s quite another to actually build a dashboard.
I think a lot of folks jump right into the building phase of creating a KPI dashboard. They think they can just select their dashboard software and poof! their dashboard will be auto-magically created.
I’ve written about the challenge of assuming technology equals solution before, and this applies to KPI dashboards as much as anything. Dashboard software is not an end unto itself. Building a great KPI dashboard is a process that extends far beyond your computer.
So let me challenge you to think of creating a KPI dashboard a bit differently. Instead of thinking about the data or the software or even the KPIs, think about who is going to use the dashboard and why they’re going to use it.
Among our customers, a critical success factor is getting alignment and buy-in for a KPI dashboard solution. You can put your dashboard in Excel for all I care, but if no one views or cares about the dashboard, then you’re not going to get very far.
As with all things technology, it’s the human element that poses the biggest obstacles.
Process for creating a KPI dashboard
Here’s a framework for creating a KPI dashboard. I’ll dive into each topic in more detail below.
- Define your key performance indicators
- Consult with stakeholders
- Sketch your dashboard’s design
- Select your KPI dashboard software
- Gather your key data points
- Create your data visualizations
- Schedule a feedback session
- Deploy your KPI dashboard
Defining your key performance indicators
Well-defined KPIs are the beating heart of your dashboard. Without meaningful KPIs, you might as well be watching the sky for signs that your business is successful.
Defining KPIs is about matching business objectives to internal processes. There are lots of KPI examples out in the wild to help guide you, but the path to success is asking tough questions about your business.
How do you know you’re monitoring a KPI? Discerning the difference between metrics and KPIs can be tricky. I like to think of KPIs as having specific targets that directly impact business outcomes. Revenue is a solid KPI for every business, but how about social media followers?
Well, it might be, if that’s a success factor for your business. If having 100,000 Instagram followers means you put food on the table, you’d better be tracking towards that target.
In defining your KPIs, you must start having conversations with stakeholders, executives, managers, and employees from all areas of your business. Asking for input is the first step in drumming up buy-in for a KPI dashboard. Folks will tell you what’s important to them, and this will make your job of designing a dashboard much easier. Learn more about how to define your organization's KPIs.
Consult with stakeholders
Communications professionals live by the following rule: know your audience.
A KPI dashboard is simply another communication medium, like email or a slide presentation, so being in-tune with your audience is critical. Take the time to understand who you’re building the dashboard for, and you’ll soon understand why you’re building a dashboard in the first place.
An executive will have very different data requirements than a manager. This includes the latency of the data, the design of visualizations, and the amount of data shown. Executives may lean more towards a reporting dashboard while a manager may need an operational dashboard.
Take your time on this step. Every minute spent consulting with stakeholders will save you time designing and improve adoption of the end product.
Sketch your dashboard’s design
Every dashboard I’ve ever built starts with a napkin drawing. Designing an effective dashboard is challenging. Choosing the most effective visualization for a KPI isn’t always obvious.
As you start to collect KPIs, a cohesive design may present itself. Maybe it’s a combination of charts and bullet charts, or tables and sparklines.
By creating a low-fidelity prototype of your dashboard and then reviewing it with stakeholders, you’ll get an immediate sense of the impact of the dashboard. Design choices may seem indefensible when an executive is scratching her head wondering what the data is telling them.
As a general rule, data visualizations should be simple enough that a new employee can understand the message you’re trying to convey. This is challenging. But by starting with something you can throw into a trash can, you spare your ego and save time in designing the dashboard.
Selecting your KPI dashboard software
Here are a few factors to consider when choosing KPI dashboard software:
- Time to deploy
- Ability to connect to data services
- Self-service vs. managed dashboard services
- Ability to publish dashboards via multiple channels
- Client management (if you’re building for your customers)
You absolutely can build an effective KPI dashboard in Excel. The challenge comes later on when you want to update the data on that dashboard. At the end of the day, KPI dashboards ought to save you time and effort when creating and distributing reports.
Dashboards within software solutions can also serve an important role. Again, you may find yourself outgrowing these solutions before too long. Dashboards are designed to get data out into the organization. For example, building a Salesforce dashboard to share sales KPIs with your executive team.
Gathering your key data points
Cue hyperbolic comments about big data, the amount of data we have available, and the increasing complexity of data. Got it? Good.
Gathering your data likely requires going to multiple services, working with your operations team to craft some SQL queries, and even using APIs to automate data retrieval.
Each KPI you track will have at least one data point originating from one system or another. Take some time, create a spreadsheet, and map out the data picture behind your most important KPIs.
At this stage, you’re going to need to spend some time building your data sources. This step causes the most headaches. I can offer aspirin, but that’s about it. For non-technical users, APIs are challenging—here's a post I wrote to help demystify APIs.
Most software vendors offer professional services, which may be something you want to consider if the challenges in this step are insurmountable. It’s a pain point every dashboard software vendor is working to solve, some better than others.
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Create your data visualizations
This is the tip of the iceberg of building a KPI dashboard. All the work you’ve put into your dashboard is below the surface. But it supports the end result: a beautiful dashboard.
In my experience, the most effective dashboards are those that adopt simplicity as their mantra. If you’re faced with a choice between a scatter plot or a bar chart, opt for the bar chart.
I’d make the case that a KPI dashboard isn’t a data analysis tool. You shouldn’t be using the dashboard to ask and answer questions; a dashboard should be informative and geared towards monitoring and tracking KPIs.
A few quick tips on dashboard design:
- Don’t build a one-size-fits-all dashboard.
- Add comparison values wherever possible.
- Carefully consider the orientation and arrangement of visualizations.
- Avoid pie charts.
- Limit your use of color. Think traffic lights.
Schedule a feedback session
Remember those stakeholders I mentioned in our previous steps? Time to get them into a room to review the dashboard with you.
KPI dashboards are the result of an iterative process. Be proud of your V1, but be prepared to roll out a V1.1 or even a V2.0 in the near future. That’s a good thing, because it means people are viewing your dashboard and see value in it.
The success of your dashboard hinges on your ability to foster adoption of it. Dashboards that become a daily habit are much more likely to succeed. Aim for daily views, and design for that use-case.
At this stage, you may feel overwhelmed by feedback and ideas. After all, you’ve just spent how long creating this dashboard, right?
Take it in stride. If folks are excited about what you’ve built—even if they request changes—it means you’re on the right track.
Deploy your KPI dashboard
This is the fun part because you can start to collect some high-fives for your work. I’m a fan of displaying dashboards on wall-mounted TVs in the office because a) it encourages data transparency and alignment, and b) it looks super cool.
It’s an eye-catching way to get visibility for the KPIs powering your business. And it's a natural conversation starter, one that encourages adoption of the dashboard.
Of course, most KPI dashboard software vendors offer multiple distribution options. Consider options like:
- Email reporting and snapshot capabilities
- Published links to the dashboard for mass publication
- Integration to chat tools like Slack
- Giving direct access to the dashboard itself
KPI dashboards and accounting for the human element
The central thesis of this post is that KPI dashboards must account for the human element, above all else. Technology is great, but it needs to be put to service solving human challenges.
Investing your time gathering feedback and encouraging conversations about your KPIs will result both in a better dashboard and in a dashboard that will be used.