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 through a collaborative process will be value-added. However, the most important question is not whether a financial dashboard is “perfect” but whether it is “useful” to as many people as possible.
The word “useful” has two key implications. First, it acts as a better qualifier of the main purpose for having dashboards which is to help communicate financial information to a broad range of people within the organization, with different perspectives and needs. Second, it serves to capture the end goals we should be striving to achieve with our dashboards, which is assembling an easy to understand and beneficial story-telling tool.
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 must of us 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 quick and 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 with fewer barriers than would be possible from numerous pages of financial statements and management reports.
Assembling the components of a financial 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 striving to include about 70% of their needs, but we want 100% of their comments and opinions. This can be accomplished without discouraging anyone. Begin by asking everyone to independently submit (from a list of dashboard component options) which items they believe are important to be included in the dashboard. Next, get together in a group meeting to review the list of the components, noting which components were selected most frequently as well as any new ideas and requests.
This collaborative process works. Everyone gets to choose what they believe is most important to them, without interference or bias from other participants. 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 (trying for 70% of everyone’s needs) that will fit in a one-page dashboard that tells the most complete story possible. The discussion around cutting down this list is always enlightening and provides a high probability that the final product will work for a wide-ranging group.
Planning Tip – Set up a small representative working group reflecting the key end-users to drive the process to develop a new financial 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 supervisors, 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 from the expected users of the financial dashboard.
The result will be a working financial dashboard that is beneficial to as many users as possible, not a perfect dashboard. This collaborative process will focus the group on developing a dashboard that is useful and brings collaboration to the process while retaining a sense of individual ownership.
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