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A common problem with dashboards is vanity KPIs that create noise.
Vanity KPIs are metrics that make you look good but they don’t relate to true performance of your business objectives.
For example, Microsoft stopped reporting on the number of Xboxes sold and replaced it with the number of active users of Xbox Live service. They realized that the Xbox could be sitting in the family room collecting dust while the number of active users is more reflective on the longevity of their service.
When the dashboard is packed with vanity KPIs, likely you spend a lot of time on reviewing numbers rather than making decisions.
This is why you need to audit your KPIs. For each KPI, ask three questions:
- What are the implications of the numbers for the KPI?
- What actions does the KPI trigger?
- How well do the actions support your business goal?
When the answers to these questions don’t support your goals, you are likely looking at the wrong KPIs.
Try to minimize the number of KPIs you put on the dashboard. It is better to focus on a handful of useful KPIs than getting distracted by vanity KPIs.
Don’t forget to check out Does Your KPI Convey a Message?
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