How to create a KPI dashboard

Creating a KPI dashboard is an iterative process that requires a bit of thought. It’s one thing to know you want to monitor key performance indicators (KPI) on a dashboard; it’s quite another to understand how to build a dashboard.

I think a lot of folks jump right into the building phase of creating a KPI dashboard. They think they can just select their dashboard software and poof! their dashboard will be auto-magically created.

I’ve written about the challenge of assuming technology equals solution before, and this applies to KPI dashboards as much as anything. Dashboard software is not an end unto itself. Building a great KPI dashboard is a process that extends far beyond your computer.

But first, what is a KPI dashboard?

A KPI dashboard is a reporting tool that brings your KPIs together in one place so you can compare your current performance against your strategic goals. It visualizes your data with charts and graphs so you can quickly and easily gain insight into your performance.

Among our customers, a critical success factor is getting alignment and buy-in for a KPI dashboard solution. You can put your dashboard in Excel for all I care, but if no one views or cares about the dashboard, then you’re not going to get very far.

How to create an effective KPI dashboard design

Let me challenge you to think of how to create a KPI dashboard a bit differently. Instead of thinking about the data or the software or even the KPIs as you set up, think about who is going to use the dashboard and why they’re going to use it.

Here’s a framework for creating a KPI dashboard. I’ll dive into each topic in more detail below.

1. Define your key performance indicators
2. Consult with stakeholders
3. Sketch your dashboard’s design
4. Select your KPI dashboard software
5. Gather your key data points
6. Create your data visualizations
7. Schedule a feedback session
8. Deploy your KPI dashboard

Step 1: Define your key performance indicators (KPIs)

Well-defined KPIs are the beating heart of your dashboard. Without meaningful KPIs, you might as well be watching the sky for signs that your business is successful.

Defining KPIs is about performance tracking and matching business objectives to internal processes. There are lots of KPI examples out in the wild to help guide you, but the path to success is asking tough questions about your business.

But how do you know you’re monitoring a KPI? After all, discerning the difference between performance metrics and KPIs can be tricky. 

I like to think of KPIs as having specific targets that directly impact business outcomes. Revenue is a solid KPI for every business, but how about social media followers?

Well, it might be if that’s a success factor for your business. If having 100,000 Instagram followers means you put food on the table, you’d better be tracking towards that target.

When defining your KPIs, you must start having conversations with stakeholders, executives, managers, and employees from all areas of your business. 

Asking for input is the first step in drumming up buy-in for a KPI dashboard. Folks will tell you what’s important to them, and this will make your job of designing a dashboard much easier. 

Learn more about how to define your organization’s KPIs.

Step 2: Consult with key stakeholders

Communications professionals live by the following rule: know your audience.

A KPI dashboard is simply another communication medium, like email or a slide presentation. Understand who you’re building the dashboard for, and you’ll soon understand why you’re building one in the first place.

An executive will have very different data requirements than a manager. This includes the latency of the data, the design of visualizations, and the amount of data shown. Executives may lean more towards a reporting dashboard, while a manager may need an operational dashboard.

Take your time on this step. Every minute spent consulting with stakeholders will save you time designing and improving the adoption of your reporting dashboards.

Step 3: Make your KPI dashboard

Every dashboard I’ve ever built starts with a napkin drawing. After all, choosing the most effective visualization for a KPI isn’t always obvious.

As you start to collect KPIs, a cohesive design may present itself. Maybe it’s a combination of charts and bullet charts; maybe it’s an image of tables and sparklines.

As a general rule, however, data visualizations should be simple enough that a new employee can understand the message you’re trying to convey. When you make a low-fidelity prototype of your dashboard and then review it with stakeholders, you’ll get an immediate sense of its impact. 

Step 4: Select your dashboard KPI software

Dashboards are designed to get data out into the organization. Here are a few factors to consider as you choose KPI dashboard software and make sense of your data:

• Price
• Time to deploy
• Ability to connect to data services
• Self-service vs. managed dashboard services
• Ability to publish dashboards via multiple channels
• Client management (if you’re building for your customers)

You absolutely can build an effective KPI dashboard in PowerPoint or Excel. The challenge comes later on when you want to update the data.

At the end of the day, KPI dashboards ought to save you time and effort when building and distributing reports. Dashboards within software solutions can also serve an important role. Again, you may find yourself outgrowing these solutions before too long. 

Step 5: Gather your key data points

Gathering data for your KPI dashboard likely requires going to multiple services, working with your operations team to craft some SQL queries, and even using APIs to automate data retrieval.

Each KPI you track will have at least one data point originating from one system or another. Take some time, make a spreadsheet, and map out the data picture behind your most important KPIs.

At this stage, you’re going to need to spend some time building your data sources. This step causes the most headaches. I can offer aspirin, but that’s about it. 

For non-technical users, APIs can be challenging. So, here’s a post I wrote to help demystify APIs.

Most dashboard software vendors offer professional services, which may be something you want to consider if the challenges in this step are insurmountable. It’s a pain point every vendor is working to solve, some better than others.

Step 6: Create your data visualizations

This is the tip of the iceberg of building a KPI dashboard. In my experience, the most effective dashboards are those that adopt simplicity as their mantra when they create one. 

For instance, if you’re faced with a choice between a scatter plot or a bar chart, opt for the bar chart.

Here are a few quick tips to remember as you make your dashboard design:

• Don’t build a one-size-fits-all dashboard template.
• Add comparison values wherever possible.
• Carefully consider the orientation and arrangement of visualizations.
• Avoid pie charts. They can’t accurately represent the data you want to show.
• Limit your use of color. Think traffic lights.

A KPI dashboard isn’t a data analysis tool. You shouldn’t make or use the dashboard to ask and answer questions; a dashboard should be informative and geared towards monitoring and tracking KPIs.

Step 7: Schedule a KPI feedback session

Remember those stakeholders I mentioned in our previous steps? It's time to get them into a room to review the dashboard with you.

At this stage, you may feel overwhelmed by feedback and ideas. After all, you’ve just spent how long creating this dashboard for your KPIs, right?

Take it in stride. If folks are excited about the dashboards you’ve built (even if they request changes), you’re on the right track.

KPI dashboards are the result of an iterative process. Be proud of your V1, but be prepared to roll out a V1.1 or even a V2.0 in the near future. That’s a good thing because it means people are viewing your dashboard and seeing its value.

KPI dashboards that become a daily habit are much more likely to succeed. Aim for daily views and design for that use case. The success of your dashboard isn’t in how you make it; it hinges on your ability to foster its adoption!

Step 8: Build and deploy your KPI dashboard

This is the fun part because you can start to collect some high-fives for your work. I’m a fan of displaying dashboards on wall-mounted TVs in the office because a) it encourages data transparency and alignment, and b) it looks super cool.

It’s an eye-catching way to get visibility for the KPIs powering your business. Also, it’s a natural conversation starter, one that encourages the adoption of the dashboard.

Of course, most KPI dashboard software vendors offer multiple distribution options. To this end, consider options like:

• Email reporting and snapshot capabilities
• Published links to the dashboard for mass publication
• Integration to chat tools like Slack
• Giving direct access to the dashboard itself

Learn to build KPI dashboards for humans

KPI dashboards must account for the human element above all else. The success of your dashboards hinges on how well it meets the needs, preferences, and behaviors of those who will use it daily when trying to make sense of KPIs. 

Technology is great, but it needs to be put to service, solving human challenges.

Investing your time in gathering feedback and encouraging conversations about your KPIs will result in a better dashboard; one that your team can leverage for success.