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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.
Here’s a framework for creating a KPI dashboard. I’ll dive into each topic in more detail below.
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 follConsult 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.
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.
Here are a few factors to consider when choosing KPI dashboard software:
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.
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.
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.
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.
If there’s one thing that is fast becoming an essential skill for data-driven marketers, it’s knowledge of and ability to work with APIs (Application Programming Interfaces).
And if that term has you running for the hills, I can assure you it’s not as scary or as difficult as it may seem.
Here’s the thing: it’s really hard for most marketers to point to an objective and say, “Aha, this is why I need to learn APIs.”
Sure, we hear those famous stories of successes, such as Airbnb’s growth hack coup that utilized Craigslist’s API.
But what about us mere mortals?
I think I have an answer: reporting. APIs allow apps to talk to one another. Imagine having a new person added to your list in Marketo as soon as you create a lead or contact in Salesforce.
This may not be the business-defining growth rocket ship you’d hoped for, but it’s a start. And you can save yourself a heck of a lot of time by using APIs to do reporting and dashboarding because with APIs you can:
The gist of this post is that I’m going to provide a basic 101 approach to what marketers could benefit from knowing about APIs. I’ll use a few examples that most of us browsing the web will at least have a passing familiarity with.
This post will also provide the background information for your future API explorations, so you feel confident in your knowledge when it’s time to dig deeper.
Here’s what I’m going to cover:
Let’s just cut to the chase. Here’s a simple definition: an API is a method for specifying how services should interact and communicate with web-based applications.
Here’s the best analogy of an API I’ve heard. An API is a waiter at a restaurant. The waiters job is to communicate your order from you, at your table, to the kitchen, where the food is made, and then bring it back to you.
The Waiter (API) takes your order (the request) from your table to the kitchen (the system) and returns with your food (the response).
APIs are most commonly used by developers to design products that use or integrate with a particular service. A good example is Facebook.
If you’re reading this post on your computer, you’ll notice that there’s a little sidebar with social media icons, including Facebook. Well, by clicking on the Facebook icon, you can automatically share a link to this post in your Facebook feed.
This is done via the Facebook API. Share this post, get your hands dirty!
When I was first introduced to APIs, I found it easiest to take a step back and look at the roots of an API. The Client-Server Model is the software architecture that defines your normal web browsing experience.
As a client, your web-browser initiates requests to servers which in turn respond with the information you requested. One of the most basic requests is to display a web-page. This is done using a URL request. This is exactly what happened when you clicked to see this blog post on our website!
APIs work in much the same way as a URL does, so it’s useful to brush up on how a URL works. A URL is made up of a number of parts which allow the client (you) to communicate what information you’d like to retrieve from a server (a website).
Think of URLs the same way as you would the way you organize files on your computer. By referring to a location, such as “/desktop/my-folder/image1.png” you are able to access an image file from a folder on your desktop.
This is where things get interesting for us marketing folk, since it’s one of the simplest use-cases for APIs.
So, just as a URL processes a request where you (the client) ask the website (the server) for a specific web resource like a blog post, an API also requests information. But, APIs can be much more clever. You can request data in an open-ended way, because it’s often not possible to know what specific data is associated with a resource.
To understand how APIs can do this, let’s take a look at an example request URL.
Much like any other URL you may plug into your web-browser, a request URL specifies what type of information you want from a service. Let’s take a look at a breakdown of an example request URL.
I included a few other elements in the above URL image. Here’s an overview of those elements:
To help this all sink in, listen to Nikta Kanuka, our Product Manager for Content and Integrations, breaking it down:
With so many companies investing in this new area of business, possessing a working understanding of APIs becomes increasingly relevant to careers in the software industry. Through this course, we hope to give you that knowledge by building up from the very basics. We start by looking at some fundamental concepts around APIs. We define what an API is, where it lives, and give a high level picture of how one is used.
When talking about APIs, a lot of the conversation focuses on abstract concepts. To anchor ourselves, let’s start with something that is physical: the server. A server is nothing more than a big computer. It has all the same parts as the laptop or desktop you use for work, it’s
just faster and more powerful. Typically, servers don’t have a monitor, keyboard, or mouse, which makes them look unapproachable. The reality is that IT folks connect to them remotely — think remote desktop-style — to work on them.
Servers are used for all sorts of things. Some store data; others send email. The kind people interact with the most are web servers. These are the servers that give you a web page when you visit a website. To better understand how that works, here’s a simple analogy:
In the same way that a program like Solitaire waits for you to click on a card to do something, a web server runs a program that waits for a person to ask it for a web page.
There’s really nothing magical or spectacular about it. A software developer writes a program, copies it to a server, and the server runs the program continuously.
What An API Is and Why It’s Valuable
Websites are designed to cater to people’s strengths. Humans have an incredible ability to take visual information, combine it with our experiences to derive meaning, and then act on that meaning. It’s why you can look at a form on a website and know that the little box with the phrase “First Name” above it means you are supposed to type in
the word you use to informally identify yourself. Yet, what happens when you face a very time-intensive task, like copying the contact info for a thousand customers from one site to
another? You would love to delegate this work to a computer so it can be done quickly and accurately. Unfortunately, the characteristics that make websites optimal for humans make them difficult for computers to use.
The solution is an API. An API is the tool that makes a website’s data digestible for a computer. Through it, a computer can view and edit data, just like a person can by loading pages and submitting forms.
Making data easier to work with is good because it means people can write software to automate tedious and labor-intensive tasks. What might take a human hours to accomplish can take a computer seconds through an API.
How An API Is Used
When two systems (websites, desktops, smartphones) link up through an API, we say they are “integrated.” In an integration, you have two sides, each with a special name. One side we have already talked about: the server. This is the side that actually provides the API. It helps to
remember that the API is simply another program running on the server 3. It may be part of the same program that handles web traffic, or it can be a completely separate one. In either case, it is sitting, waiting for others to ask it for data.
The other side is the “client.” This is a separate program that knows what data is available through the API and can manipulate it, typically at the request of a user. A great example is a smartphone app that syncs with a website. When you push the refresh button your app, it talks to a server via an API and fetches the newest info. The same principle applies to websites that are integrated. When one site pulls in data from the other, the site providing the data is acting as
the server, and the site fetching the data is the client.
API use case examples
Imagine your business uses Infusionsoft as its email marketing system, but your sales team are using Salesforce. As a marketer, each time you drive a new lead to your website and they fill out a data capture form. This data is captured in Infusionsoft so that you can target them with further marketing messages. Now imagine that you’ve set up a scoring system in Infusionsoft that ranks prospects as high value when they’ve revisited more than 3 times. Your sales manager is just dying to get his sales team onto those leads!
Current process is someone in your team needs to download once per week a list of those high value prospects into a csv file and then email the file to the Salesforce admin person, who then uploads them to the Salesforce application. The sales leader then allocates these leads to the sales team based on geography indicators.
You can remove cost and increase quality of the process by using the Infusionsoft and Salesforce APIs together with a piece of cloud based middleware – such as Zapier – that knows how to get the data out of one system into the other system according to a set of rules.
We simply set up Zapier to have log ins to both systems and then use the APIs to extract all new high value lead appears in Infusionsoft, then go to Salesforce, check for any similar records, and if none, create a new prospect record and assign this to a salesperson.
Using such a method not only saves cost and reduces errors of transcripting or loading data manually, but it also gives your sales team much hotter leads which can markedly increase conversion.
This process can be used in reverse to ensure any sales leads captured in the field by sales people can also be copied automatically to Infusionsoft to ensure they received marketing communications.
In today’s world of multiple online tools in almost every business, the business manager has access to potentially way more information on customer behaviour than ever before. The smart businesses are understanding quickly how to harness this data to drive better decisions, whether in customer segmentation, marketing, sales approach or customer success functions, both at an aggregate level, but also on a customer by customer basis.
If any of statements below are true for your business, these are signs that data integrations and data warehouses could help your business too.
These are really common issues, because, let’s face it, hooking up systems is hard, and finding the time and expertise to develop really good KPI information is time consuming and skilled.
How does data integration work?
Most modern cloud based systems these days use technology and protocols developed for use across the world wide web in recent years. In simple terms this means that the browser on your desktop, communicates with the server somewhere in the cloud, using GET and POST commands. A GET command asks the server to send over some data to the browser (which it usually displays to the user) and a POST command sends data from the browser (that a user may have input using a keyboard) back to the server to be stored.
A piece of software, usually called integration software, can be programmed to use these same commands when certain things happen – for example a new record appears in the database of one particular tool.
The integration software understands the application programming interface (API) of each cloud based system it deals with, so that it can fetch and post data correctly and reliably.
In this way, it’s possible to link systems together so that key data is shared automatically. It’s still not that straightforward, since you need to consider all the edge cases of what happens if a record is corrupt, duplicated etc, but it’s a lot better than trying manually to keep systems in sync.
Where does a Data warehouse come in
Once the key systems are in sync, it makes sense to download data to a reporting environment and develop reports that give information back to the business. These can take the form of Key Performance Indicators (KPIS) usually time series reports that show an organisation whether they are improving or on track with key measures (sales, customer satisfaction, conversion etc), or they can take the form of ad hoc queries that are the topic of management interest from time to time.
Frequently data warehouses are held in secure cloud based databases with backups and suitable access security. Ensuring they are up to date, clean and deduplicated is not a short task, but is vital if you want to rely on the information for business decisions.
Further processing, such as cross tabulation of customer purchase behaviour with demographics or web activity is often necessary to derive the real key knowledge that can drive real business decisions.Continue reading
Productivity flat since 2008
The chancellor exposed the productivity conundrum facing the UK in the recent Budget – the solidly increasing labour productivity trend took a dive in the 2008 recession and has only just recovered to the same levels (see Figure 1 below). If we had continued at the same pre-2008 trend, labour productivity would be 20% higher than today, and all other things being equal, workers could be paid 20% more.
Without an increase in labour productivity, whilst we can squeeze a little more tax from the rich, and give the less well off more tax breaks, the fundamental problem is that UK Plc needs to be more productive – that is, produce more £ value added per hour worked.
Labour productivity is calculated by dividing the output produced by labour by the labour input. Output is calculated as gross value added (GVA), which is an estimate of the £ value added produced by an industry, and in aggregate for the UK as a whole. Labour inputs are measured in terms of actual numbers of jobs, or by number of hours worked. When the press comment on productivity, its usually on a per hour worked basis, as this is the headline measure used by the Office of National Statistics.
Manufacturing labour productivity growth has outstripped services labour productivity growth
Looking a bit deeper into the statistics reveals that labour productivity in the services sector since 2009 has seen steady but very slow growth of approximately 0.6% per annum. The manufacturing sector has been much more volatile but on average has increased about 1.1% per annum since 2009.
This puzzle of lack of labour productivity growth has challenged economists, especially in services, since many jobs have been affected in recent years by the explosion of productivity enhancing software.
As the Chancellor pointed out yesterday, hundreds of thousands of typing jobs have been removed with the enhancements in computer software. Mailrooms have been decimated by the explosion of email. Everyday office tasks like arranging meetings, completing expenses, posting a job vacancy – many of these are much less time consuming than they used to be. Similarly, activities that involve the public sector like taxing your car, buying a TV licence, completing a tax return or applying for benefits have all been re-engineered to involve less paperwork and more single entry systems. Its incredible to think that this is not impacting productivity in a positive way.
Source: Office for National Statistics
Foreign Direct Investment firms are more productive
Here’s where it gets interesting. On 6th October 2017, the Office for National Statistics released a study of productivity for firms which result from, or engage in, foreign direct investment (FDI) as compared to indigenous UK firms. Firms engaged in FDI account for 20% of the UK economy. The results are startling. The productivity of the median FDI firm is £59k per worker, compared to only £28k per worker for indiginous firms. Controlling for size and industry, the study concludes that productivity of FDI firms is 74% HIGHER than of non-FDI firms. The table below, taken from this report, shows the massive disparity in both mean and median productivity on a £000 per worker basis.
The study goes on to note: “Firms which attract flows of investment from overseas corporations (inwards investment) are widely thought to benefit from increased investment, access to technology and expertise, as well as stronger management and organisational practices, while firms which undertake investment overseas (outwards investment) are thought to benefit from access to larger markets”
So whether there is cause as suggested above, or simply correlation, it seems that attracting more foreign direct investment into UK firms has to be positive for productivity, and supporting UK firms investing abroad is also positive. From a policy point of view, anything that reduces the attractiveness of the UK for inward investment, such as higher corporation tax, excessive red tape, challenges in hiring high quality labour and restrictive labour laws would be highly counterproductive to enhancing productivity – which is of course the only sustainable way to increase average pay levels. Read the report here
Stronger management and organisational practices will help
As noted in the report, many FDI firms are exposed to management and organisational practices from other countries. One of the key things to consider at a micro level is whether leaders and managers in the UK are sufficiently focused on productivity. In companies that I have run, I have always obsessed about trying to reduce wastage of labour hours. One of my main concerns was trying to clarify what work was important and valuable to the business, and to motivate and energise staff to attack this work. Any lack of clarity often results in enormous time wasting, for example working on initiatives that are later abandoned, or simply spending too much time in meetings discussing what needs to be done.
In the US tech sector for example, we now see the development of goal setting management process such as Objectives and Key Results (OKR), used by Google, Facebook, Intel, GE and others.
I continue to think that productivity can be substantially enhanced by really clear goal setting across an organisation, and open visibility about what the key leaders and team right across the business are working on. That way, work that is not productive, or not in line with the objectives set by the company, will be quickly halted before too much productivity is lost. And there’s a good chance unproductive meetings will also be reduced.Continue reading
I am frequently fascinated by the incredible ease with which some individuals can start businesses. They seem able to do everything required to build a product or service, get customers and deliver it.
But things must change for a company to grow beyond this so called creativity stage.
Larry E Griener presents a nice model of the five stages of company growth in his Harvard Business Review study.
The possibility for a revolution or crisis exists at the end of each Phase of growth.
This model explains well what I have often observed as a business moves from the initial phase of being driven by the entrepreneur, to the next phase of growth which Greiner calls “direction”. As he notes: “ Creative activities are essential for a company to get off the ground. But as the company grows, those very activities become the problem”
The size of business we are talking about here may vary depending on the industry and the founder, but in my experience I have observed this as businesses move from 8-20 employees, where everyone reports to the founder, to a size of 25-50. At this larger size, it becomes necessary to start having teams, and not everyone in the business can be personally inspired by the founder.
So talking about the challenges of moving from Phase I (creativity) to Phase II (direction), there are three major mistakes I see time and time again.
1. Not letting go of the detail
Entrepreneurs are the creative force, and usually the person who can do everything in the early days of the business. Experienced staff are hard to come by, pay rates are low, and the successful entrepreneur lives by the mantra “if you want it done right – do it yourself”. Letting go of that detail and control is scary and not every entrepreneur manages it.
2. Not hiring senior managers at the right moment
At some point, maybe 25 employees, maybe 50, the new staff coming on board identify less with the passion of the founders, and more with the direction, stability and professionalism of the company. This is a time where systems, procedures, controls need to be put in place – and this is frequently not what entrepreneurs are good at or enjoy. Professional senior management is required. Not recognising this, and spending the money to find strong managers is often a reason why businesses have crises and tread water, or even fail.
3. Not moving from “doing” to “leading”
The entrepreneurs and founders often have survived during the early years by “doing” stuff. Whatever it takes basically, to win the deal, deliver the product or satisfy a customer. As the business grows, the employees become naturally more capable and resistant to interference from the entrepreneur. They want to be trusted and left to get on with the job. And they want the entrepreneur to spend his time on figuring out the overall direction of the company, resolving the big strategic questions. This represents a major change in way of working for most entrepreneurs. Whereas once the vision, goals and strategy could be maintained unwritten in their heads, and communicated by frequent informal contact with team members, now its a bigger thing that needs documents, Powerpoint presentations and staff updates. Consistency in direction, policy and staff treatment is valued highly in the next stage of growth, and many entrepreneurs find this a straight jacket which doesn’t fit well.
So how to avoid these mistakes?
One way to resolve both the fear of letting go, and the risk of upsetting employees through micromanagement, is to introduce a light touch goal setting and continuous feedback process. This also has the advantage of setting a regular communication channel that reinforces the key strategies of the business on a regular basis.
The leader gets to engage regularly with the goals of each of his teams, and follow progress through the check-in process. But the teams get to define their own goal success measures, and give regular updates without necessarily having face to face meetings. Senior managers get more information to focus their attention on resolving blockages to progress.Continue reading
OKR is sweeping across Silicon Valley as a way to implement Goal Setting in organisations. But can ‘ordinary’ companies adopt a similar goal setting approach and get the same benefits? Well yes of course! But one of the challenges is explaining and training staff in the differences between Objectives, Key Results and just plain simple tasks. Without this clarity, the OKR will quickly become confused and frustrating as some objectives may really be goals and some goals may really be tasks. Bear in mind the following definitions and examples.
Objective: Something inspirational you want the business to move towards by a specified time
Key Results: One or more measures which indicates whether you are moving towards your objective
Task: An activity or set of activities that need to be completed by one or more people
So far so good. However we frequently find with implementing Goal Setting and particularly the OKR method, that team members have difficulty distinguishing between Objectives, Key Results and Tasks.
So here are some handy questions to help you challenge your team to write Objectives, Key Results and Tasks that are appropriate
It’s an Objective if the following are true:
It’s a Key Result if the following are true.
It’s a Task if the following are true
The temptation to slip into writing down Tasks is almost irresistible, particularly when setting out on the OKR journey, but since lot of the value of OKRs comes from the critical thinking required to come up with good objectives and key results, its worth spending some time on this part of the process.Continue reading