Dashboards are a key piece of managing any business. They bring together all of your relevant data into an easily digestible format, making it easy to understand what’s working, what’s not, and what you can do to make things better.

At least that’s the plan.

Most people are familiar with executive dashboard best practices: Link them to your strategy, have them cascade down the organization, include a mix of forward-looking variables (like leads in the sales pipeline) and backward-looking ones (like booked revenue).

But this is all easier said than done. Once you get into the weeds with your own data, you can start to forget the guidelines and get mired down in the minutiae of it all. We’ve been there. Which is precisely why we want to help you avoid some of our early experimental dashboard mistakes. Take what we’ve learned, so you can skip ahead to getting the most out of your data from the start.

1. Seven, Plus or Minus Two Measures

Robert Simons, HBS Professor and author of Seven Strategy Questions, runs an executive education course on performance metrics. Early on in the course, he asks all of the participants to bring in a copy of their existing dashboard. He then awards a prize to the person with the most metric-laden dashboard.

It is, however, a consolation prize, because this executive is actually the loser. Simons advocates having only five to nine metrics on your dashboard.

There is this temptation to make sure every possible metric is on the dashboard so absolutely nothing can go wrong. The problem is that when there are too many things to look at, nothing gets looked at with the right level of scrutiny. Then it becomes tough to get a real feel for the numbers.

At one company where I worked, we had a 12 page dashboard. We definitely would have won Professor Simons’ prize. I can tell you from that firsthand experience that Simons is absolutely right; it was very difficult to spot the issues.

If you’re not sure which metrics to cut, Simons has some more advice: Focus on failure. What five to nine things could sink your business if they went wrong? The answer to that question will lead you to the data points you should be tracking.

2. It’s A Smoke Detector, Not a Silver Bullet

One reason we ended up with 12 pages of metrics was we were trying to make the dashboard more than a dashboard. The purpose of a dashboard should be to foster a disciplined review and understanding of the most important numbers in your business. When one of the numbers is off, that’s when you need to turn to analysis to identify the root cause.

Get alignment with your team that the dashboard should function as a smoke detector—it alerts you when something is starting to smolder. But your work doesn’t end there. When the numbers raise the alarm, you must find the source of the fire and stomp it out.

For example, with one client, we noticed their traffic was way down. We knew that was bad news, but we didn’t know why it was happening. So we did some digging. We looked at the sources of traffic (search, email, social, etc.), time of day, and the device (desktop, mobile, or tablet). It then immediately became clear what the problem was. Traffic on mobile had fallen sharply.

Clearly our user experience was not satisfactory on the phone, so no one was engaging with that product. We launched an initiative to improve the mobile interface and were able to get mobile traffic, and thus overall traffic, up to the target again.

3. Minimize Manual Work

In my early dashboard days, I put a lot of weight on getting the ideal metrics—ones that perfectly matched our strategy and cascaded nicely across the organization. Unfortunately, this took time and attention away from implementation. As a result, we put a lot more effort into creating the dashboard rather than using the dashboard.

Once, our team was building a dashboard to support a new segmentation strategy. We wanted to look at performance by custom channel and segment, which meant manual manipulation of the data. This quest for the ideal metrics had us allocating two full-time employees to creating the dashboard each week. In retrospect, that was silly!

Will it take you one full day each week to piece together different sources of information so you can calculate the number of new customers by your custom-defined sources (e.g., Facebook ads, house ads, Twitter ads, email campaigns, and Pinterest posts)? Why not just use the sources that are pre-defined in Google Analytics to save you time? Save those deep-dive analyses for when you notice an issue in one of your channels.

Creating an effective dashboard is the first step to taking ownership of your data and using it to make informed business decisions. If your current dashboard isn’t working—or you’re currently without a dashboard altogether—we hope our early learnings will inspire you to dive in and get an efficient dashboard up and running. And remember, there’s no shame in making some mistakes along the way! If you find that your first attempt isn’t working, don’t be afraid to shake things up, switch out some data points, and keep refining until you find an approach that works for you.

About the Sterling Woods Group, LLC

The Sterling Woods Group’s mission is to help clients make sense of their data to build deeper relationships with their best customers, launch new products and membership programs, and execute smarter marketing strategies.

We use a hypothesis-driven, data supported methodology to discover your “spin”—a simple insight that no one else is paying attention to. Then, we help you assemble the right technologies, marketing plans, and resources to seize this opportunity.