Dashboards Don’t Grow Your Business
Dashboards have become a key feature in modern business management. They provide leaders with real-time data on pretty much anything: sales, customer behavior, financial performance, and operational efficiency. However, despite their widespread use, many businesses find themselves stagnating, struggling to grow or scale effectively. This is because dashboards are often a distraction. Metrics alone don't create progress. True business success and scalability come from seeing the business as a value creation system and deeply understanding how purpose, drivers, constraints, and key flows impact the ability to create value.
The Business as a Value Creation System
To truly understand what drives success in business, you need to look at your business as a system of value creation. This system has three essential elements: Purpose, Path, and People. Purpose defines why the business exists and what it aims to achieve both in the short term and long term. Path represents the processes, strategies, and workflows that enable the business to fulfill its purpose. People are the employees, partners, and customers who engage with and drive the value creation process.
In this system, there are also flows—of value, information, energy, and cash—that move through the organization and fuel its ability to grow. Drivers propel these flows forward, enabling the business to meet its objectives, while constraints limit the business’s capacity to deliver.
Understanding these components—how they interact, where the flows come from, and where they get stuck—is critical for leaders looking to create sustainable growth. Dashboards should reflect this understanding by tracking metrics that truly matter, not just any available data.
Drivers and Constraints: Focusing on What Really Matters
Growth doesn’t come from tracking everything; it comes from focusing on the few key drivers that propel your business forward and identifying the constraints that hold it back. This is where dashboards often fall short. They show a lot of data but don’t always highlight the true drivers of growth or the constraints that are limiting success. In the example of an insurance co-op, one of the primary drivers might be operational efficiency—how quickly and accurately claims are processed. A constraint might be an outdated claims processing system that slows down the flow of service and frustrates customers.
According to the Theory of Constraints, every system has a constraint that limits its ability to grow. By focusing on and managing the constraint, businesses can unlock significant potential. While dashboards can show you that processing times are lagging, they often don’t point to the underlying issues like system inefficiencies. A deep understanding of your value creation system is needed to identify and address these constraints.
Stewardship and Leadership: More Than Just Data
At the end of the day, growing and scaling a business isn’t just about analyzing data; it’s about leadership. Dashboards provide useful information, but they don’t make decisions. True leadership involves stewardship—managing the present while ensuring that the business is on a sustainable path toward the future.
For example, a leader at the insurance co-op might see that reducing service costs is necessary to remain competitive today, but they also need to make investments in technology and customer service to keep the co-op relevant and effective over the next decade.
Just like a pilot whose main objective is to get the plane safely to its destination on time, there are just a few important pieces of data they need to know – everything else is a distraction. Effective leaders understand the business as a system and know that dashboards, while helpful, are just one part of the decision-making process. By understanding the flows of value, information, energy, and cash within the business, leaders can use dashboards more effectively. This understanding quiets the noise, enabling leaders to track only the metrics that make a real difference to the organization’s ability to achieve its goals.
Dashboards as Part of the Decision Toolbox
Dashboards, while valuable, are just one piece of the decision support toolbox. They provide data that helps track performance, but real growth comes from understanding how your business functions as a value creation system. Before diving into KPIs and dashboards, you must first gain clarity on the key components of your business system—your purpose, your drivers, and your constraints.
Once you understand these elements, you can develop dashboards that track the right metrics—those that actually make a difference. The goal of dashboards should not be to overwhelm you with data, but to help you monitor the flows and components of your value creation system. With this clarity, you can focus on removing constraints and enhancing the drivers that push your business toward sustainable growth.
Conclusion
Dashboards alone don’t grow businesses. They are a useful tool for tracking operational performance, but real scalability comes from a deep understanding of your business as a value creation system. This includes clarity on your purpose, an understanding of the key drivers and constraints affecting your business, and a focus on maintaining the balance between short-term needs and long-term sustainability.
Similar to a pilot who needs only the critical information that supports their immediate purpose (getting there safely and on time) and relies on other data to support the long-term goals of a flight, business leaders also must look beyond the metrics on a dashboard. They need to track the metrics that matter, focusing on the drivers that propel growth and the constraints that hold it back. When used as part of a broader decision-making strategy, dashboards can provide critical insights—but they must be aligned and report metrics critical to the business’s purpose, path, and people. Only then can they truly make a difference in the ability of the organization to achieve its goals and scale effectively.
