Creating and Using KPI Dashboards in Middle Market Companies

There are two kinds of surprises in the world: the fun ones like gifts and the not-so-fun ones like finding out Q1 revenue is going to fall 30% short of target. 

Fortunately, tools exist to help your business better monitor what’s going on—with the idea that you can cut down on the number of unfun surprises, and ultimately build (and run) a stronger business. 

Meet the key performance indicator (KPI) dashboard. In this article, we dive into what KPI dashboards are, what they are used for, and how they benefit leadership teams. And while there are plenty of resources out there on KPIs already, we’ve put this guide together specifically for businesses in the middle market space. These businesses can really benefit from having and using a KPI dashboard. 

What is a KPI dashboard?

A KPI dashboard is a high-level visual summary of your core business activities—with visual feedback on current performance. Ideally, a KPI dashboard gives business leaders and their managers early insight into revenue, sales, trends, and more, allowing them to respond more quickly to unexpected developments. 

KPIs are of enormous value to companies, but many middle market firms are not using them, or are just at the beginning of their KPI journey. Many leaders are not sure exactly what to track and how to bring data together. If your organization doesn’t already have a fully functional KPI dashboard in its toolkit, this article will give you and your team a starting point.

The benefits of a KPI dashboard

With a KPI dashboard in place, you and your team can better monitor your business performance against strategic goals. It’s also easier to see when things are off (see: averting the bad kind of surprises, above). Ultimately, KPI dashboards help you steer your business toward its short-, medium- and long-term objectives, which can help you improve growth and profitability over time.

Four keys to creating and reviewing your KPI dashboard

Creating your business’s KPI dashboard takes an investment of time and collaboration up front. There is no shortcut to identifying the activities that ultimately have a financial effect on the business, and no “express lane” to building the tool. Once it has been created, though, the KPI dashboard helps business leaders and managers focus—on a daily or weekly basis—on how business performance is trending and allows them time to make necessary adjustments. In the end, this upfront investment can benefit your business. 

A useful KPI dashboard for middle market businesses must be just right—not packed with too many metrics, or those that are too sophisticated. Everyone on the team who needs to be in the know on KPIs should be able to understand what is being measured, how each KPI is calculated, and how they reveal business performance. 

With this in mind, here are four key steps to successfully building and using a KPI dashboard in your business:

#1. Understand what drives results. Meet as a leadership team and discuss what activities drive your financials to determine what you should pay attention to. Every function has a set of KPIs that you can track. Examples include: 

  • HR focuses on the business’s staffing model, including how many FTEs you anticipated having vs. your actual current staffing, and whether your workforce aligns with current and expected workloads. 
  • Marketing and sales track the business’s sales funnel, from the number of leads and prospects at the top stages of the funnel to the days from quote to close. This function also measures how old the opportunities are at each stage of the funnel to gauge the likelihood of conversion to sales. 
  • Finance monitors gross margins, revenue and profit per employee, days sales outstanding, and EBITDA, among other KPIs. 

Identify the range of metrics tied to each function, as well as who manages and monitors the associated activities and their desired performance ranges. 

#2. Define measurement. Once you have identified your metrics, decide together how each will be measured, where the data comes from, and what it means. Align on the math necessary to calculate the metric. 

#3. Create a format. Take the metrics that the team has agreed on and bring them together in a dashboard. Together you will need to decide on a format. Enterprise resource planning (ERP) software can make it easier to produce metrics from data. If your organization does not use an ERP, you may need to pull data from different sources into a single file like a spreadsheet. Lean on charts and graphs whenever possible to represent data visually, as it can be easier for everyone to see and understand. 

#4. Meet and review regularly. As a leadership team, meet and review your KPIs regularly to determine where your business is relative to where you projected it would be. Discuss performance that falls outside the expected range, whether above or below. This will help you unlock the problem-solving power of your team to steer your business in the right direction—and prevent those unwanted surprises. 

Looking for guidance on how to create a KPI dashboard for your business? An interim CFO can provide the high-level strategic financial leadership you need to do it right the first time, and to be sure that you are measuring and tracking the metrics that matter to your success. 

We can help. Marren Consulting supports privately held businesses with strong financial leadership and accurate, relevant reporting—helping business owners and leaders identify opportunities to improve performance, unlock growth, and achieve their firm’s full potential. Learn more at  

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