There Is No Perfect Financial Dashboard and That Is Good

The problem with financial dashboards is that everybody has a different idea about what makes up a “perfect” dashboard. Opinions are important and the sharing of those opinions in a collaborative process is value-added. It is important to set up a proper framework for this discussion to develop a financial dashboard that fulfills most of the needs of your organization’s many different end-users, which may be quite different from other organizations. The question to ask is not whether a financial dashboard is “perfect” but whether it is “useful” to your particular organization.

The word “useful” has two key implications. First, it acts as a better qualifier of the main purpose for having dashboards. Second, it serves to capture the end goals we should be striving to achieve with our dashboards, which is assembling a collaborative and coherent story.

Defining why we need a dashboard is an enlightening process. Many say that we need dashboards because we do not know how to read the financial statements and management reports that are naturally available as part of any working accounting system. I would counter that we do know how to read financial statements and management reports, but we simply lack the time and patience to properly understand and digest this information in a meaningful way. Thus, the main purpose of a dashboard is to gather in a single page document the random bits of key financial information that collectively tell a coherent story in about a minute or two. In short, dashboards are useful because they help us understand and digest financial information quicker than would be possible from numerous pages of financial statements and management reports.

Just as important, the word “useful” implies that a dashboard must be helpful to many rather than just one or a handful of people. The end goal of a dashboard should be to inform as many different users as possible in the shortest possible amount of time.

Assembling the components of the dashboard through a collaborative process is essential to developing a report that has a chance to fulfill this goal. What needs to be communicated to the individuals participating in the process is that we are aiming to include about 70% of their needs but we want 100% of their input and opinions. You can accomplish this without discouraging anyone by first asking each individual to independently submit what they believe is important to be included in the dashboard and then agree to get together in a group meeting to select the components from a master list compiled from all participants.

This collaborative process works. Everyone gets to list what they believe is most important to them, without interference or bias from other participants. Next, compile the lists of components without each author’s name so people can see a master list without bias. All will see overlapping dashboard components as well as new inputs and ideas.

There are two results from this process. First, everyone can see where there is automatic agreement on components by observing duplicate inputs. Second, they are then able to work together to streamline the list down to a reasonable number of components that fit on a one-page dashboard that tells the most complete story. The discussion around cutting down this list is always enlightening and provides a high probability that the final product will work for the group.

Planning Tip – Set up a small representative working group reflecting the key end-users to drive the process to develop the new dashboard. Include at least these three user groups: volunteer leadership (Board members, finance committee, officers), senior management (C-suite, executive director, director of finance or controller) and staff (project directors, program managers, fund development managers, event managers, etc.). Gather information from as many potential end-users as possible but have this small representative working group compile the information and assemble the initial dashboard for open review and discussion.

The result should be a working dashboard that is beneficial to as many users as possible, not a perfect dashboard. This collaborative process focuses the group on developing a dashboard that is useful and brings collaboration to the process while retaining a sense of individual ownership.