Building Dashboards That Matter
How to build great dashboards that will materially impact your business
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Q: How do I build useful dashboards for the company, the executive team, and the Board?
A great dashboard provides the right information to the right people at the right time to make sure a company is making the best decisions. The process of building a great dashboard is almost just as important as the actual dashboard itself because it requires cross-functional alignment on business objectives and key metrics.
To help level up your dashboards I teamed up with Brian Weisberg (CFO of Tidelift). Brian is an experienced software finance executive and a founding member of a CFO group called The F Suite.
Keep reading to learn how to build great dashboards that will impact your business.
Assembling together a bunch of financial or industry metrics may give you a dashboard, but it won’t necessarily create one that matters.
On their own, metrics answer the “what” to a question.
Annualized recurring revenue (or “ARR”) is $10m
Cost of acquisition (“CAC”) payback takes 18 months.
These may sound good on their own, but relative to another data point they’re pretty meaningless. A good dashboard should answer the “why” and provide context for the broader story.
For a simple analogy, imagine your favorite story. Metrics are the individual facts and observations. When strung together with a broader narrative, an engaging story begins to unfold. That is a dashboard. Your dashboard may give you unexpected (or expected) surprises, plot twists, and other valuable learnings that are much clearer alongside other data.
The best dashboards can help catch developments early. Similar to where the protagonist in a secret agent story line is about to step into a trap and you want to scream “STOP!” The same can be true about a financial dashboard. It can help you and your team see where to stop, start, or lean-in.
A well-organized dashboard will help you:
Benchmark against your plan
Improve visibility of need-to-know information
Help teams spot problems (or successes) early
Aid in talent management and performance
It can answer questions like:
How efficient is the business at turning cash into revenue growth?
Is the business improving its customer acquisition motion?
Do product development investments generate a positive return?
Great dashboards empower teams to make better decisions more quickly.
If you are just looking at a bunch of metrics, you are only getting 10% of the info you need. The other 90% can be captured in a great dashboard that helps tell the whole story.
Pre-work for a great dashboard
To build a great dashboard you must understand how the business operates.
Sit with your marketing and sales teams and have them walk you through the lead gen strategies and opportunity qualification processes.
Spend time with the account management function and have them talk you through what post-closing, ongoing, and renewal support is like.
Talk with your product delivery team to understand how they do their planning and get a sense for how much time they spend building new features, performing bug fixes, and overall maintenance.
Get your data house in order. Assemble your list of data sources–general ledger, marketing automation tooling, CRM, billing system, and any other internal/external databases you may need to pull from–and ensure the data in them is thoroughly structured.
Your metrics and the story they’ll tell are only as good as the inputs you use to calculate them.
Use best practices when it comes to the design of your chart of accounts (OnlyCFO’s great example) and make sure your accounting team is tagging the right level of detail (departments, classes, vendor, etc)
Make sure everyone is aligned and clear on definitions (funnel metrics, sales stages, ARR, etc).
This pre-work may seem trivial. You may think you’ve already got it figured out. But I’d argue that this is the most important step in creating a good dashboard. On its own, data can lie and mislead. And on their own, people can say they do one thing, even when the data shows that they do another.
Context matters
Metrics should be presented with the past, present, and expected future performance.
Consider your Board, they may sit on 10 other boards and therefore don’t remember the historical context and where the company is going. The trends build the story so good decisions can be made.
The specific time periods presented depends on the audience and company specific circumstances. For board meetings, my preference is to present a combination of annual and quarterly periods (that at least show the prior year ago period) and then use a forward and backward monthly trend for leadership teams. The reason being one’s involvement and connectivity to the business.
Below is an example SaaS dashboard for the board:
Below is a sample SaaS P&L (also helpful for board conversations):
Metric selection
While there are some “standard” metrics for some industries, there is no golden ticket metrics.
Personally, I’ll maybe write a 1-2 sentence question or summary statement for a person and then bullet out a few data points that might help tell that story. Once you have that you can go hunting for metrics. As tempting as it may be, try not to get too carried away. There are limits to one’s attention span. Try to pick the top 3-5 that help tell the story for a given question.
Bundle together ARR, ARR Growth, CAC, CAC Payback, and Magic Number and you have a go-to market efficiency interest group.
Split ARR growth into an ARR Movements view, add gross revenue retention, net revenue retention, and logo churn and you have an interest group about whether you have a leaky bucket.
Looking at infrastructure costs as a percent of revenue, R&D payback, and R&D as a percent of revenue or Opex and you have a sense for the efficiency of your product development organization.
Once you have your list of metrics, document your methodology. Sure, there are some commonly used calculations–dare I say “standard” — but even the most well-known metrics like ARR can have various calculations. This appendix will become a critical resource to ensure you and your stakeholders are all on the same page.
Also, don’t feel like you need to use the “standard” approach. This is your dashboard, not someone else’s. Your metrics should answer the “why” that is important for your particular audience.
Presentation
When presenting a dashboard, whatever you do, don’t make your audience do the hard work. As tempting as it may be, don’t ever just flash a table or series of charts on a screen without context. Instead, pretend like you are in an elevator with your audience and you have 2 minutes to tell them the story behind the metrics. That is what separates the amateurs from the pros.
What are the 2-3 sentences you want someone to know about your dashboard?
At the end of the day, KPI measurement and dashboarding is a continuous exercise. There is never a “done” state. Sure, you want to try to design templates and workflows that optimize for efficiency, but be sure to solicit feedback and evolve your dashboard alongside the business.
Resources to get started
Not sure where to start? Dave Kellogg and David Skok maintain incredible blogs and have for years. Below are some enduring posts to help get you started:
[
- I hear there is also some good stuff at onlycfo.io 😎 ]Dave’s blog
David’s blog
Another interesting resource I found last year is investor, Insight Partners’ SaaS Periodic Table of common metrics and industry heuristics
Footnotes:
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Great post but looks like the SaaS P&L was posted twice instead of the SaaS dashboard (above the P&L)
One of the best posts on dashboards I've read yet - specific, actionable, and something all consultants can consider when it comes up.