As in the case of Reckitt Benckiser, well-designed strategic performance dashboards can have a transformative effect on a business. So, what are the important principles that make such dashboards effective?

Each day businesses carry out a great number of activities. However, some activities are more important than others. These are the activities on which the company’s strategic position rests. It’s these strategic activities that deliver exceptional returns i.e. above the market average. The success of a CEO’s strategy will depend on successfully communicating these priorities and aligning people behind them. At any scale, the only way to achieve this is through strategic performance dashboards.

A success story, I worked on and saw at first hand which always helps me illustrate the importance of well-designed strategic dashboards, was at Reckitt Benckiser in early 2001. We were developing a strategic dashboard for the CEO Bart Becht. He had just been appointed CEO of the company following a merger, which had left the company with a muddle of different brands across global markets. Bart’s strategy was to take this broad portfolio and turn it into a focussed a set of global power brands. Such global brands could then command premium prices. The challenge was that local market teams across the organisation were emotionally invested in the local brands they’d been nurturing for years. To be successful he needed to cut investment in local brands and challenge the investment behind the strategic activity of brand building for global power brands. Bart was very clear in what he wanted for the dashboard design. His design would focus everyone’s energies on building the power brands, monitor the associated activities and tie rewards to the performance of the power brands. Therefore, the dashboards tracked resources going into brand building and how successfully those brands were gaining market share. The performance was not only measured at global level, but at every responsibility area at every organisational level. The dashboard was so impactful, that teams across the globe would pin a copy of the latest dashboards to their team board. Over the following decade Reckitt Benckiser outperformed its own aggressive growth and profitability targets in every single year and Bart personally benefitted to the tune of £70 million in a performance bonus.

Every business’ strategic dashboard will be different, but there are some key principles and approaches that can be helpful to bear in mind.

Selecting the Right KPIs

KPIs fall into two groups. Input measures such as media spend, and output measures such as sales growth compared to market growth. It is important to measure KPIs that relate to both inputs and outputs. This is because some inputs have a long-term impact that can’t be measured by short term outputs. For example, media spend will have a long-term impact on brand health, while promotional spend will have a shorter-term tactical impact on sales.

The choice of KPIs must not be too complicated and good judgements must be made about which KPIs are most important to include. Good strategic performance dashboards KPIs are ones that cannot be “gamed”.

Engaging People in the Design

Engaging people in the design ensures that you reflect their understanding of the important relationships between the KPIs and the shared model they have of the business drivers. It’s important to ask people about past experiences and significant events which impacted on performance, to ensure that these are covered in the design.

The process of engaging people will also help surface a shared mental model of the business, which will be supported by the final dashboard design. It will also start the important process of standardising and gaining agreement on the definitions that will be used across the business.

Predictive Analytics

Predictive analytics has a specific role to play in strategic dashboards. By projecting results weighted on a recent trend, it can provide a warning of the significant impact a deviation might have unless early corrective action is taken. Drawing attention to these before they become obvious concerns (or problems), is a powerful tool.

Visualisation and Dashboard Design

Designing a dashboard is an art, but it’s one that’s based on an understanding of what’s important, an understanding of the relationships that exist between drivers and outputs and the way that people think about the business. This means that it isn’t something that can be achieved without having followed the previous principles and having gained a real appreciation and understanding of the business.

A strategic performance dashboard design is one people will be looking at regularly. That means that the design can be a little more ambitious or complex, than it otherwise might be; a lot of visuals are designed to be understood intuitively, but as the expectation here is that people will develop a high level of familiarity with the dashboards, there is more leeway. Bad design will, however, render the dashboards ineffective.

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Well-designed dashboards monitor strategically important activities and the specific priorities within them. They provide early warning signals of under-performing or misaligned activity and its predicted impact. It highlights causal issues so that they can be addressed promptly. The speed with which users agree and implement action reflect their confidence in a shared causal model of the business.

COVID-19 is changing the world and hitting retailers particularly hard; but in the medium to long term, might these changes lead to new opportunities for retailers and help level the playing field with e-commerce giants?

Changes Inspired by COVID-19

So what are some of the longer term effects that we might see as a result of this pandemic?

A Greater Willingness to Share Data

In Singapore 630,000 people voluntarily downloaded the Tracetogether app, released to help fight the coronavirus, COVID-19. The app logs mobile phones which come into proximity with each other. The Korean and Singaporean health authorities have shown that it was possible to contain the outbreak within a month, using the data from these apps to target “trace and test” programs – tracing and testing contacts of infected people. Other governments are now planning to use these apps to assist with their trace and test programs, to contain any resurgence of COVID-19. Such technologies and approaches may also be important for retailers, restaurants, sports clubs, venues and communities looking to help protect their customers and staff.

The use of the apps is expected to be voluntary, but the social pressure to use them will be intense. People are more than ever aware of the value of their data and their right to control how it’s being used. For years people have shared data with Google and Amazon for convenience, but now they will be asked to share data with the health authorities to save their lives, their families, their communities and their economy from coronavirus. The likely result of this will be a greater willingness on the part of individuals to share data, especially when it creates wider social benefit.

Change in the Demand for Local Deliveries

The second big change induced by COVID-19 is the ramp-up in local deliveries. Providers of essentials are ramping up local deliveries and actively supporting their local communities. Local retail stores are becoming an important source of deliveries of essential goods and retail staff are being employed picking and filling orders. Retailers sharing a location are collaborating on deliveries. Tens of thousands of new delivery personnel have been recruited by retailers and hundreds of thousands of community volunteers are helping to make local deliveries to the most vulnerable people and to essential workers. Customer perception of the value and timeliness of local deliveries is changing, and local retailers are gaining experience of larger scale local delivery operations, as well as a surge in the amount of data they hold about local customers.

Coronavirus is Changing Community Attitudes

A third result of the COVID-19 lockdown is the deeper recognition by everyone of the value of local facilities in creating attractive locations for social interaction. Retailers have been making big efforts to create attractive surroundings to encourage greater footfall and providing more experiential shopping experiences. Amazon creates soulless out of town warehouses. The pandemic is reminding people of the value they place on the mix of local facilities that vibrant retail makes possible; restaurants, clubs, gyms, libraries, and cafes as the hub of the local community. There is likely to be a refreshed perception of the value of local providers of services to the community.

What These Changes Could Mean For Retailers

Collaboration on local delivery could persist and evolve. Local retail has a competitive advantage over large e-retailers in fast, last-mile distribution, using its retail locations, but has been slow to take advantage of this (notable exceptions such as Matches Fashion, not included). Retailers will need to achieve scale efficiencies and local retailers could continue to collaborate on deliveries, learn from their recent experience, scale and innovate to take full advantage.

New willingness in data sharing will also persist. New data on local customers will have been acquired and customers that have become more community-minded could give permission for their data to be shared in ways that benefit local providers to that community. Visitors may become comfortable with retailers logging their visits by phone proximity and allow that phone to be linked to the retailer’s customer database.

Everyone that values retail as part of the community hub and wants to save it could continue to cooperate. That includes retail tenants, landlords, local authorities and government and, most of all, customers. Regulators are likely to be supportive of any changes which help and protect vulnerable people and support their community hub. People may also come to realise that sharing data is necessary to enable better local services that can compete with Amazon on choice, cost and speed. It could support collaboration between local providers that could resuscitate communities, building an identity for each locality that draws on local produce, services, art, music, heritage, culture and craft, and that enlivens that community by sponsoring events and visitor attractions.

Competing with the Amazon Model

Taken together, and in the longer term, this could permit local retailers to level the playing field with firms like Amazon and the big delivery aggregators. They will have a competitive advantage in better, faster, lower-cost, large scale, last mile delivery from their locations.They will potentially have better customer data than Amazon and the delivery aggregators with a 360-degree understanding of their customers. 

This means adopting the same data strategies as the on-line firms, making the case to customers for data sharing. They will have both on-premises and on-line businesses across which they can enhance customer experiences. They can collaborate to beat Amazon by making their locations attractive, social community hubs, sharing data across all kinds of types of outlet, cross-selling with joint promotions and events. It is not asking people to accept lower service levels and higher prices, it is providing consumers with competitive prices, faster low-cost local delivery, rewarding social experiences and a positive community identity.

All crises lead to change. The National Health Service came out of the change in social attitudes brought about by the second world war. This crisis will leave us with new attitudes, new experiences and a shift in priorities. Data sharing will need to continue to control the virus. New collaborations and delivery services will generate new data, a substantial proportion of the population will be willing to give permission for their data to be shared with the community for the benefit of the community, and to help to transform local services. Retailers could take advantage of the changes in priorities and in attitudes to create a new era of community and customer collaboration and innovation in services.  It seems that data and analytics are central in the short term to ensuring that the bounce back from this economic shock is not interrupted. Data and analytics will also be central to supporting understanding, collaboration, innovation, competition and community in the long term. People will have a simple choice; share data with your local providers of services and get enhanced low-cost services and a hub for your social and community life or refuse and watch your locality and community being hollowed out.