Many executives and senior management teams spend a disproportionate time on operational commitments, rather than dealing with important strategic issues, and as a result have very little time or capacity to dedicate to the strategic direction of the company.
Findings from a review by scholars at the London School of Economics and Harvard Business School revealed that senior management spend almost 33% of their working week in meetings.
Colin Hundermark, a Director at Step Strategic Venturing, adds, “For many business owners, CEOs or directors of a business, the most important focus area should be business profitability. In order to increase the overall efficiency of an organisation, it is crucial that executives are focused on the key strategic metrics that drive shareholder return.”
Hundermark remarks how there is rarely consensus on what information is required to monitor a business’s bottom line and, as a result, many executives receive reams of data from their subordinates, much of which is irrelevant. “Middle management in an organisation often make sure that they have ticked their own boxes – as opposed to filtering out only the useful data, and send everything to the Executives to ensure they haven’t missed any critical management information.”
This inefficiency prevails throughout corporate South Africa and is partly due to a lack of resources and partly due to a protectionist culture. According to Hundermark, corporate dashboards are becoming an increasingly important management tool in a world that continues to get busier. “Companies need to figure out what the key drivers of their business are, and then create a dashboard that makes this information available to them in a consumable manner in real-time.”
“By conducting a driver analysis on the business – a measure of the key drivers of a business – we can determine the key metrics that drive the development of an organisation’s return on equity. Based on this, management can identify the top 5-10 key components of the business that will drive stakeholder value and should ultimately direct the focus of their daily activities,” he says.
Hundermark adds, “No one in an organisation should have to manage more than 5 – 10 key data points and these will also vary depending on the person’s role. A CEO’s 5 -10 data point dashboard will therefore be very different to a Line Manager’s dashboard – which ensures that everyone in the organisation is directing their energy exclusively to the tasks that help them meet the business objectives in the most efficient manner.”
According to Hundermark, once the key metrics for the organisation or a division have been determined, they must be presented in a visually compelling format that is easy for executives to digest on a regular basis. He says that there are many sophisticated technologies available that allow companies to draw information from their server and update the dashboard data in real-time. This information is then displayed in a visually compelling format that can be used on the likes of iPads and other mobile devices.
“If the corporate dashboard is consistently updated and presented in this manner, it will assist senior management to make important choices regarding their business when necessary, rather than waiting for that weekly or monthly finance meeting to discuss trends that happened in the previous period. Companies can then track metrics over time and observe trends, pick up early warning signals and react proactively,” says Hundermark.
Hundermark includes that, “As a result of using corporate dashboards, business decision makers will potentially also see a dramatic change in their own performance as they will be giving the key drivers of the business the proportionate attention, rather than monitoring and responding to the urgent tasks in their inbox.”
“Another positive consequence of corporate dashboards is that teams know that their managers will have real-time access to important data at their fingertips and will no longer have to wait for a monthly report. This begins to drive the right behaviour.” he says.
Hundermark concludes that by implementing this streamlined approach to management, businesses will likely see a noticeable improvement in their productivity and overall efficiency. “By monitoring the value drivers of a business, managers can ensure that they are focused on the right areas and will therefore become increasingly nimble in detecting trends as well as catching early warning signs to guard against potential problems.”