Choosing indicators to decide, not to decorate

A dashboard full of charts does not necessarily help you decide. Too many indicators create noise; badly chosen ones steer you toward bad decisions. The safest method: start from the decision, not from the available data.

Start from the question

Before choosing a figure, state the decision it must inform. “Should we hire?”, “Which products should we promote?”, “Is our website bringing us enquiries?” Each question matches one or two indicators, rarely more.

Four criteria for a good indicator

• Relevant: it answers a real management question;
• Reliable: you know where the data comes from and how it is calculated;
• Comparable over time: calculated the same way from one month to the next;
• Actionable: if the figure moves, you know what to do.

Outcome indicator and steering indicator

An outcome indicator measures what happened (number of orders). A steering indicator measures what leads to it (number of quote requests, response rate). The first confirm, the second let you act in time. Good tracking combines both.

Define each indicator in writing

• its name and the question it answers;
• its calculation formula and the scope covered;
• its data source;
• its update frequency;
• the person responsible.

An example for a website

The number of visits is easy to get, but says little. To know whether the site does its job, follow instead the number of contact requests and, on the search side, the clicks and positions of important queries in Search Console (see how to read them).

The pitfalls

• vanity indicators, which flatter without informing;
• comparing figures without context (seasonality, change of method);
• following too many: beyond a handful, nobody looks at them.