You know something is off. Revenue is down, margins are small, biz dev seems to be taking an awful long time to close and there’s friction in your team over who’s billable…and who’s expendable. As an owner or operator, you see the symptoms, but you don’t know the root causes. You want to start pulling levers—but which ones? The answers lie in KPIs and business dashboards.
At Vodori, a digital marketing firm in Chicago, their business performance is on display for everyone to see, with metrics unfolding in near real time. Dynamic and insightful, the dashboard didn’t materialize overnight. It evolved over many months, and is still evolving to this day.
Grant Gochnauer, VP, Product and Co-Founder at Vodori, joined us on The Bureau Briefing (episode 008) to share how Vodori got started with KPIs, and how you can too. The driver to this whole thing, he says, was a deep desire to dig into the guts of their business and really understand how changes impact outcomes.
Digging into the Data
Like any data exercise, the first step to tracking and measuring is determining what you want to know. At Vodori, they wanted to understand how operations and process translated to targets. They set out to answer an assortment of questions such as:
- Does the sum of all the pieces add up to the budget total?
- Is time spent interviewing a candidate valuable?
- Are teams being utilized properly?
- Why do some teams seem to excel while others seem to struggle?
Proof of Concept
Talking with other owners at Owner Camp San Francisco, Grant loved the idea of having 70" monitors that displayed business metrics. Creating a quick proof of concept with just three KPIs, he shared it with Vodori’s leadership. Recognizing the value, they handed it off to another engineer who ran with it.
Starting out, Vodori didn’t have the right operational model to standardize data inputs in a way that allowed them to aggregate data to create insightful metrics and dashboards. Each of their teams was operating in a nuanced way, with inconsistent time tracking. So data was all over the place.
Vodori had been tracking their time at the end of the week, and reflecting on the previous month. Realizing they were looking at lagging indicators, they switched to daily time tracking. They wanted to be able to say, “If we can make this change right now, we can close this month out to be a great month, instead of a good month.”
What a Dashboard Is…and Isn’t
Vodori started by displaying their daily seven-day average and month average of profitability, revenue and billability. They didn’t plan a formal team rollout. They just put the dashboard up. The response from their team fell into two camps: (1) “This is amazing,” and (2) “Wait, so now I’m just a cog in a machine responsible for hitting numbers?”
At their weekly Friday meeting, they went over the importance of the dashboard and the ultimate goal. The dashboard was a way to increase visibility, test hypotheses and cultivate a culture of transparency and continuous improvement. It wasn’t a witch hunt, or intended to oust anyone for not pulling their weight. As a company, and as a team, they wanted to determine how to do the best work possible and become more profitable in the process.
Ready to implement KPIs and a dashboard of your own? Here are a few insights from Vodori’s experience to help you out:
- Start small. Large team or small, it’s easiest to get started with just one or two KPIs such as revenue or margins.
- Integrate with existing tools. Look for software that integrates with your existing tools (e.g., Harvest, Jira, Google Sheets).
- Standardize your data. Vodori had to align their teams to the same process and inputs in order to create consistent data.
- Create transparency. Vodori has always had a culture of transparency. If the company doesn’t hit their target numbers, they discuss the reasons together as a team. It could be things they did, issues with the marketplace or circumstances with clients.
- Rally the team vs. killing morale. On one occasion, Vodori was way off their targets, and needed to double down and figure out how to fix things. KPIs gave them the insights they needed to recognize issues, light a fire and rally the team. Everyone pulled together and they were able to come out ahead.
- Focus on influences. Going through this process, Vodori’s team tended to gather around the board to watch if the company was profitable, broke even or took a loss, day after day. Realizing things fluctuate, the team tries to focus more on what influences are affecting the variables. Perhaps a PM is billable for eight hours one day, then spends eight hours on new business the next. That time may not read as valuable today, but it could be in the future.
- Make KPIs actionable. Having KPIs is not enough if you don’t have a plan for what you want to do with them. If you’re measuring margin or revenue, you have a baseline, but what is the takeaway? Design insights to be actionable and layer up into something larger like a company goal.
KPIs and dashboards give you visibility into your business. They offer insights and help you ask the right questions to optimize your processes and teams. Are you working to implement KPIs and dashboards at your shop—or have you already? Let us know how things are going, and what recommendations you’d give to others.