For several decades car dashboards have been equipped with “dummy lights”. We rarely see these lights (except briefly when starting your engine) but they are always there ready and waiting to alert you to a problem (check engine, oil pressure, tire pressure, airbag problem). Their less than flattering name comes from the fact that they don’t require much knowledge/information about the car in order to use them. In fact, they are designed to purposely limit the amount of information we receive since most of us wouldn’t know what to do with the details anyway.
Despite the fact that many of us successfully use these on a daily basis, their application hasn’t translated to the business world. We can drive a car perfectly well and determine when a problem requires our attention without on-going, detailed metrics on each of the car’s system’s performance. Yet, for some reason we still think that unless we monitor a large amount of data in business we won’t be able to manage. Ironically, that constant barrage of numbers is probably what distracts us, misleads us, and otherwise makes managing more difficult.
The reality is that when trying to assess a situation and where your problems lie, we really don’t care about the numbers. The numbers are just an input. What we really care about is what the numbers are telling us. For example, it doesn’t really matter if my sales are 100 units or 300 units if they were supposed to be 1,000 units. What I care about is the fact that I am behind. So why do we need to show current sales, the sales goal, and last year’s sales on the report? That’s too much data. It’s not efficient. Why give three data points (and an implied fourth, the difference between actual and target) when a simple “on target”, “ahead”, or “behind” is really all you need. That would be like displaying current oil pressure, desired oil pressure, and last week’s oil pressure on your dashboard. Trying to drive and monitor all of that data would inevitably lead to a crash. Not surprising, it does in business as well.
Many of us intuitively recognize this. That’s why we use colors or symbols on our reports. In essence, we create “dummy lights”. When I ask people what they are looking for when they read the report, they’ll often say, “I look to see what’s red and what’s green.” They don’t look at the numbers, they look for the colors. However, the difference between these dummy lights and the ones on our dashboards is that in business the dummy lights are in addition to, rather than instead of the detailed data. The result is an even more busy and confusing report. I’ve seen reports that look like the control panel of HAL in 2001: A Space Odyssey.
If you find that you are using colors and symbols on your reports you are halfway to designing more simplified reports. You’ve already identified what you really care about. Now, take the next, harder step, and drop the numbers. Organize the report around the colors or symbols (e.g., put all of the reds together, all of the greens together, etc.). You will get your questions answered much faster.
This isn’t to say that specific numbers aren’t ever important. When you need to diagnose a problem, the data are essential. But assessing where you are at and diagnosing why you are there are two different things and should be treated that way. When your “check engine” light goes on, the mechanic plugs a diagnostic tool into a port under your steering wheel and gets all sorts of data and error codes related to the car’s performance. But, you only need that data if there is a problem. Tracking it while you are driving will only create a distraction.
More numbers don’t always equate to better decisions. In fact, as the volume of numbers increases, decision making often suffers. The more data you encounter, the more your brain ignores, distorts, or invents in order to try to manage the data. That inevitably leads to poor decision making.
Let go of the numbers. You don’t need them as much as you think. Focus on creating reports that simply and directly show you where you have problems and where you are doing well. Then, for those areas that require your attention, you can jump into the details.
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Brad Kolar is an Executive Consultant, Speaker, and Author. He can be reached at brad.kolar@kolarassociates.com.
