What is a management dashboard and which KPIs should it have?

What is a management dashboard?

A management dashboard is a single summary page that shows the company's most important performance indicators next to their targets and recent trend, so a manager can see in a few minutes where things are fine and where attention is needed. The key word is "decision": everything on a management dashboard should connect to a decision or a management question. If nobody ever acts on a number, it does not belong there.

Management dashboards are usually built in business intelligence tools such as Power BI, because these tools read data from the accounting system, the ERP, Excel and operational systems, refresh automatically, and let a manager click any number to reach the detail behind it.

Management dashboard vs. ordinary report

A report says "what happened"; a management dashboard says "is this good or bad, and if bad, where". The difference shows in a few traits:

• A report shows every number; a dashboard shows only the numbers that matter for decisions.
• In a report a number stands alone; on a dashboard it sits next to target, last month and last year.
• A report is static; a dashboard is interactive and drills from the whole company down to one customer or one production line.
• A report is built by hand once a month; a dashboard refreshes automatically every day or week.
• With a report the manager has to find the problem; a dashboard points to it with colour and alerts.

How to choose key performance indicators (KPIs)

The biggest mistake in dashboard design is to start from the data: "we have this, so let us show it." The right starting point is the company's goals. If this year's goal is higher profitability, gross margin and the share of high-margin products in sales matter. If the goal is to stop running short of cash, days sales outstanding and the cash forecast come first.

Write down five things for every KPI: an exact definition (for example, "net sales means sales minus returns and discounts"), the formula, the data source, the measurement period and the owner. Without that definition, two people will compute two different values from the same KPI and trust in the dashboard disappears.

• Every KPI should connect to a company goal.
• The KPI must be measurable and repeatable.
• Someone must be responsible for improving it.
• Keep the first page to eight to twelve KPIs.

Recommended KPIs for a management dashboard

KPIs vary by industry, but in most manufacturing and trading companies these four groups form the base of the management dashboard. The table lists common KPIs and their formulas:

This table is a starting point, not a final list. For each company we choose the ones tied to that year's goals. Financial KPIs are covered in more depth in the Power BI dashboard for the CFO, and production KPIs in production downtime dashboard: MTTR, MTBF and OEE.

Targets and alerts: a KPI without a target is just a number

Say gross margin this month is 28 per cent. Is that good or bad? Without a target you cannot tell. Give every KPI three reference points: the target (from the budget or annual plan), the previous period and the same period last year. The last one matters most in seasonal businesses, where a dip in a slow month is normal and should not raise an alarm.

Then set alert thresholds. A simple rule that works in most projects: green when the KPI is within target, amber when slightly below (say up to 5 per cent), red when the gap is serious. Use colour only for these alerts; a dashboard where everything is coloured highlights nothing.

Laying out the management dashboard page

Put the most important KPIs in the top band where the eye starts, and add detail as you move down the page. The layout I use in most projects:

• Row one: KPI cards with the value, percentage of target and a trend arrow.
• Row two: monthly trend of sales and profit against target.
• Row three: breakdown by product, region or production line to find the source of a variance.
• Side column: a short list of alerts and items that need a decision.
• Period and business unit filters across the top.

Each KPI card should open its own detail page in one click. Clicking "gross margin", for example, opens a page with margin by product and customer. In two clicks the manager goes from "profit is down" to "profit on product A for customer B is down because of a special discount".

Common mistakes in management dashboard design

These are the mistakes I see most often in existing company dashboards:

• Too many KPIs: thirty charts on one page means none of them gets seen.
• Undefined numbers: finance and sales each calculate "sales" differently.
• Decorative charts: 3D charts and pies with ten slices are hard to read.
• Manual refresh: if someone has to paste data every month, the dashboard is abandoned within months.
• No owner: a KPI without someone responsible is watched, not improved.

Where to start

You do not need every KPI from day one. I suggest starting with one page: five to eight KPIs tied to this year's most important goal, with data already available. After two or three months of use in management meetings, it becomes clear which KPIs earn their place and what is missing. If your reports live in Excel today, moving Excel reports to Power BI walks through that path.

If you would like an analyst to build it with you, the management dashboard and KPI design page explains how the work runs, what you receive and the common questions. You can also try an interactive CEO dashboard sample right now.

Frequently asked questions