Recently I had the opportunity to compare a number of management dashboards, and what they all had in common was an excess of metrics focused on past performance at the expense of measures that described future potential. That seems a strange way to manage a business, particularly if it is one that relies on the strength of its brands to turn a profit.
My comments are based on 10 different dashboards from a range of industries. Though they were all described as “management” dashboards, only a few truly met that description by including financial data and measures of employee satisfaction and supplier performance. Most of the examples might better be described as brand or marketing dashboards. But as I suggested in the introduction, almost all of them focused entirely on past performance. If you believe brands help create the potential for growth, that focus seems myopic at best.
Yes, we have to know where our business and brands stand today if we are to make sensible decisions about future strategy and investment. But surely you also need to have some idea of what you want to achieve and whether things are moving in the right direction?
For example, it seems difficult to manage a brand or business if you cannot easily judge whether you are making progress toward your goals. As Lewis Carroll put it, “If you don’t know where you are going, any road will take you there.” Yet only two dashboards measured progress toward explicit targets. I do not know whether most of the brand plans lacked specific objectives, or whether such measures were just not built into the dashboard.
Only one dashboard contained a measure identified as a leading indicator of future performance. If marketing is about creating the potential for growth, not just triggering current sales, then surely you want to include future-oriented measures in your dashboard? Five other dashboards did include measures that I consider potentially forward looking, such as brand consideration and preference, but no particular emphasis was placed on these measures versus more standard attributes like “a brand for me.” Even when consideration was included, most dashboards simply reported the absolute numbers rather than combining the data with that from other questions to indicate future potential. For instance, what proportion of people who don’t currently own/use the brand would strongly consider doing so in the future? What proportion of people who do own/use it are likely to stick with it or seem likely to defect?
Only three dashboards included data on competitors. How can you judge your brand’s performance without some reference to how your competitors are doing? Brands do not operate in a vacuum and, particularly in established categories, you only win if someone else loses. One of the major reasons that a brand’s marketing does not achieve its intended objectives is because one or more competitors did a better job.
Measuring past performance is valuable. It allows us to identify what went right and what went wrong and hopefully allows us to replicate the former and avoid the latter. But more important is to have a clear idea of what you want to achieve and measure progress toward that goal. If the essential mission of branding is to create meaningful differentiation, then perhaps we should put a little more time and effort into measuring progress toward that objective and managing the business accordingly.
So what are your thoughts on the matter? Why do we not see more forward-looking metrics in management dashboards?
(3 votes, average: 4.67 out of 5)
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February 22nd, 2010 at 4:02 am
It is true that as researchers we tend to get really lost in the data and sometimes miss out on what will add most value. We spend time analyzing why something happened and something did not but focusing on the future is a bit hard to come by.
This could be because we wish to use all information collected whereas in reality a handful of metrics may be all we need to know to see how much potential we have and how much we are achieving.
However, a changing trend we are finding especially with some regular clients is that they are increasingly more and more demanding in terms of how they can use the data we provide them. We have instances of clients asking us how they can set targets basis the past numbers we generate. So in a way as clients believe more in the metrics we deliver they are also more interested in targetting the metrics we should be delivering!
So in a sense I believe that future orientation will come more from the life stage we are in with clients. Only if we build confidence with them in terms of the past data corroborating what they know to be market reality will they be willing to believe that some of the data is also capable of talking future.
February 22nd, 2010 at 7:45 am
I agree, forward looking metrics and a future orientation are vitial to good decision-making but need to be put in context. There was a good article recently in either BizWeek or the Economist (can’t remember which) on the business of forecasting. It summarized the current situation as an interesting problem:
Companies have greater and deeper access to historical data and statistical tools to apply to that data, and are therefore better able to explain trends in history than ever before. However, at the same time and across categories there are more non-controllable factors (macro economic swings, user generated content, new shopping patterns, …) and nearly all businesses are having more difficulty making accurate forecasts than ever before.
I think this helps put scorecards and metrics in context. The value of forward looking metrics is enormous. In the spirit of the Olympic hockey game last night, you can’t score a goal unless you anticipate where the puck is going instead of where it currently is. But it also means we always need to stop and think about other influences on trends, parameters of likely changes, … when referencing any future projections
Regards, Bill
February 22nd, 2010 at 9:23 am
Given my history as a client side research and strategist, one has to be careful about how future indicators are used. This should not be taken as a reason to cop out, but rather to understand that the issue is not exclusively a research question.
To your point, a solid dashboard should provide headlights on the future. There are comprehensive questions that provide rich consumer indicators such as trends in consideration and imagery. However, it should also point out the potential trends from other disciplines such as macro factors (as pointed out by Bill Pink in a prior response),competitive intelligence (competitive activity on the horizon) and consumer buzz and complaints (in terms of how they explain future sales).
These are not typically X now equals y in the future, but rather can focus a company’s agenda on the truly important business issues and know what within the fire hose of activity should be reprioritized upward or downard as a result.
This also requires a some coaching of the management team that the world works on competitive reaction and tipping points more than it does on a linear direction.
February 22nd, 2010 at 5:26 pm
Thanks for the comments, interesting perspectives.
@Aarthi, sounds like some of our clients have more faith in the metrics than we do! And it could be tough to provide corroborative evidence on a single brand basis for the reasons highlighted by Bill and Eric. When it comes to the future we are dealing with probabilities which are subject to far more than just brand strength.
@Eric and Bill, totally agree that brand metrics need to be complemented by other data and that the world is not linear. That’s why a dashboard should be the start not an end in itself. To Bill’s point I think a large dose of intuition (usually informed by prior experience) is required to accurately call the shots. Data alone will not do it.