Metrics: The right data visualization tool
Let’s dream a little together. If you were to come up with the ideal way to view your business data, what would that look like? Why would you choose one visualization over another? What are you hoping to gain from the data you see?
Take a car’s dashboard, for example. You have a few critical components, each telling you something specific and informative about your status: gas, speed, miles per gallon. You can quickly see the speed indicator, and if you are going too fast, you slow down! No costly tickets for you…
It seems that in the world of business data, many have lost track of this simple, straightforward and value-driven method of presenting information.
Have you ever tried to find a simple answer — for example, how much revenue did we bring in last month? — and instead of a straightforward answer, maybe you receive different numbers from sales vs. accounting. Or, maybe you have to weed through half a dozen charts and graphs to see how last month compares to the previous month? What if you don’t even realize that the term revenue means something different to you than the guy next to you? Perhaps you are assuming that refunds are excluded from the total, but your colleague assumes differently?
It may seem like you are asking a simple question, but in reality the end-result can feel overly complex, like this poor guy…
I believe the metric, when properly defined and represented, is the perfect consolidation of data that you need to monitor your business performance. Forget the data-dumps and pivot tables, the endless visualizations that lead to analysis paralysis.
“Why Metrics? So you know where you are, where you’re headed, and what’s working”— Adam Bratt, 500 Startups
A metric can give you all the information you need, if built with the following four critical components:
1. A single value
If you are tracking the right metrics, this value should be powerful enough for you to act on. Like Twitter’s character limit, or the dashboard of your car — the idea is to focus your attention on just the information you need to make informed decisions.
2. A clear and common language
When talking data, you should be speaking the same language as your colleague in the next office and your competitor in the next building. Each metric should be clearly defined, so that no matter who is looking at the results, everyone understands them in the same way. This may not guarantee you won’t disagree on how to act on that data, but it will ensure you are not working from a core misinterpretation.
3. Access to underlying data
It is critical to have the ability to validate how your metric value is calculated. There also may be times that you need to see the data that comprises the value, so that you may drilldown further for more in-depth analysis. For example, if your average deal value is much higher than normal, drilldown to see if there is one deal that is throwing off your averages — or, perhaps your team is simply bringing in more higher value deals across the board.
4. Easy to share
A clear and simple metric is easy to send via email, share in Slack, or display in a presentation. Metrics shown in this format allow everyone to view and understand the data, without requiring additional technology or special skillsets to access and interpret the data.
I believe that the visual simplicity of metrics will help narrow your focus on what truly matters. Freeing yourself from the clutter and complexity of other data visualization methods will ensure you get the data in your hands that you need to move your business forward.
Agree? Disagree? Share your thoughts in the comments!