Balanced Scorecards and Operational Dashboards with Microsoft Excel, 2nd Edition

Chapter 11

Identifying Critical Metrics and Key Performance Indicators

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.

“Giving the Boss the Big Picture”

BusinessWeek

February 13, 2006

Mapping processes is a big aid in identifying critical business activities and the causes and effects you need to monitor. This chapter teaches you methods that can help you identify and select metrics for use on an executive or operational dashboard.

I have seen departments where the only public statistic was a chart hung in the hallway. I’ve also seen the overload caused by an overdeveloped Business Intelligence system that produced so many metrics that no one knew which metrics were the “critical few.” This chapter describes a couple of methods that can help you select those critical few out of the hundreds of metrics that may exist in a process.

General Rules for Metrics in Operational Dashboards

You should follow a few general rules for the use of metrics in operational dashboards:

• Identify and select metrics using a scientific approach. Heed the maxim that some attribute to Einstein: “The definition of insanity is doing the same thing over and over and expecting different results.” Don’t just take the metrics you’ve always used and slam them into a dashboard. No matter how pretty your dashboard is, and how many dials and gauges it has, you won’t achieve any better results. ...