The Dashboard Driven Company

A company without reports is like a social media group without topics for gossip. Reports for a long time have been the lifeline for many corporate managers to hang their hat on. The computer rooms of the erstwhile mainframe computers era used to look like mini printing presses, with different reports fondly referred to as “the 2-inch thick report”, “the 10-inch master report” and so on. A manager’s importance in the organization was directly proportional to the number of reports that he or she was entitled to receive.

Enter the age of interactive computing. ‘Information at your finger tips’, ‘Reports at the touch of a button’ and similar slogans egged the senior executives forward to the point where they quickly hired secretaries to click on the computer programs that would spew out reports for them. The fact that the reports, in whatever shape or form, remained largely unread was a moot point, lost in the ‘bigger picture’.

Reports soon gave way to Dashboards. ‘I want everything in one place’; ‘I want to see one version of the truth’; ‘I want all relevant information presented on one screen’; ‘I want a quick snapshot of what is going on in my region’ – these are some of the popular ‘justifications’ for wanting to have a Dashboard where information is required to be presented as though the audience were a preschooler – colorful pies, multi-directional arrows, cascading stairs and other visual attractions.

Dashboards in any organization start with the objective of providing complex information in a simple fashion. The VP, Sales wants to know how the company is trending in sales, which products are selling well, which regions are doing badly, and so on. As soon as this information is presented, the same VP wants to see this year’s numbers compared with data during the same period last year, immediately expanding the scope and complexity of the dashboard. In jumps the VP, Finance who wants the cost of sales presented alongside on the same dashboard. This trend of being ‘all things to all men’ continues till the dashboard becomes just an entry point for literally hundreds of, you got it, good old reports.

So, what goes round comes around. While the presentation of data in fanciful formats, also known as dashboards, is the center of focus for many organizations, the all-important aspect of what actions need to be taken based on the information available remains an elusive after-thought.

 

The Analysts

In writing this next episode of my inside look at the corporate world, I am going to take the liberty of stepping outside and shining the light on another group, the stock market analysts. This group, in a manner of speaking, is like a super-company which has perhaps reached even greater heights in skullduggery than the most astute corporate gurus.

There is no gradual rising up the ladder for a member of this analyst group. Each one is a self-proclaimed pundit from inception. They have the final word on any situation or company, or both, except that the final word is never a conclusion or definitive recommendation on anything. If you think any of these ‘experts’ will tell you which stock or mutual fund to invest in, you will be sorely disappointed – the best you are going to get may be something like, ‘subject to global winds of uncertainty, we see a potential for this company to add value in the long run’. ‘How long is long?’; ‘Value for who?’; and, ‘What is Value anyway?’

When an analyst rates a stock, the words are well designed to be ambiguous enough to cover his/her backside when (not ‘if’, you may note) the predictions fall flat. ‘Outperform’, ‘Underweight’ and similar terms may give you the impression that you are looking at an advertisement for a gymnastics show or MMA event. And it becomes even more complicated, read incomprehensible, when the ratings of multiple analysts are averaged out on a scale of 1-5 and you get a ‘recommendation’ of 1.49. You might as well toss a coin to make your decision.

When these analysts form a panel to discuss ‘stuff’ on TV or other online media, it feels like you are watching an alien invasion of your property, read sanity. The topics discussed and the language used are bizarre and so full of jargon that discussions in any corporate meetings sound like nursery rhymes. Terms like ‘forward looking same-store performance’ and ‘earnings per share adjusted for reverse splits’ leave you mesmerized and frightened at the same time. To top it all, an array of charts and graphs are shown, moved around and superimposed on one another till you are dizzy with vertigo.

Data is the analysts’ forte and invincible weapon. Any point of view can be proven or dismissed using ‘relevant’ data. So, the analysts, over decades, have come up with more and more ratios and ‘indicators’. They could bind you into a tangled web with price-to-earnings-to-growth and return-on-equity ratios while befuddling you with operating income from ongoing operations. When they run out of numbers and ratios, they invent new ones by dividing two existing numbers.

If you feel the need to run for your life from the assault of these analysts, I would recommend you head for your backyard and, along with the squirrels, bury your precious savings.

The Magic of Numbers

What is a world without corporations? What is a corporation without an interwoven medley of departments? And what is an array of departments without a group of bean counters at the center – the Finance department? Numbers rule the corporate world – let us see how.

Numbers come in various shapes and complexities – forecasts, budgets, sales, inventory, labor hours, direct cost, indirect cost and many more real and imaginary figures, often fondly referred to as metrics. And newer measures are invented every day – sales per FTE (got you there – stands for Full Time Employee), ratio of seasonally adjusted inventory of items in the warehouse versus the factory shop floor and, in the digital age, clicks on icon-A versus icon-Y on your company website.

While the Finance or Accounts department is the custodian of numbers in a company, they by no means have monopoly over the generation or, more interestingly and intriguingly, the interpretation of these. The Sales department usually takes the lead in showing a positive growth in anything and everything. The Head of Projects will always have you believe that all projects are well under control while repeatedly asking for more money. The HR department can always show you that your department (in fact, all departments) is overstaffed at any point in time, even after the tenth round of layoffs for the year. The best magic is of course reserved for the highest levels such as Board meetings and shareholders briefing, where the uninformed audience (Board members included) is taken on a roller coaster ride and comes tumbling down with graphs and spreadsheets. The hapless individuals are often seen running for their lives after the event!

The power and beauty of data analysis is that the same data can be used to camouflage, sorry ‘reveal’, exactly opposite results. Pundits of analysis will convincingly show you how any data can be shown to align with any position on the 360-degree circus, I mean view, that is such an integral part of the corporate culture. For example, your year-to-date sales might be down 300% this year compared to last year but by showing the figures as a comparison of sales between the same 22.5 hour period (carefully chosen window of time) this year and the previous three years, you could be seen to have achieved a 1200% growth, ‘year-on-year’ to boot!

A simple and effective way to mesmerize people without revealing the plain truth is to divide (sometimes, multiply and add too) basic numbers. It helps a lot if you have categories within categories. If you have a large inventory of slow moving computers in your product portfolio, you combine the sales of several similar (and dissimilar) products and define a new measure called, ‘dollar sales achieved in mid to small devices per marketing dollar spent’ and your managers, staff and others will have no clue as to how you are doing. Another proven method of providing misleading information is to reorganize. An overstaffed services department could quickly be segregated into engineering design, solution development, delivery management, quality assurance (add a PMO – Project Management Office – if you feel like it) with the same (or more!) number of people and it will take several months, if not years, for the organization to figure out that it is the proverbial old wine in a newer, bigger bottle.

In the corporate world, one can add a new dimension to a popular saying – Lies, damn lies and statistics…….. AND Ratios!