In May, my wife Caro and I attended the Point-to-Point steeplechase at Winterthur Museum in Delaware. This annual event showcases exciting horse racing and exquisite horse-drawn carriages. One of the most beautiful carriages was driven by Herb Kohler, the patriarch of the eponymous world-renown plumbing business, whom Caro had met through her work as publisher of Family Business magazine. We admired Herb’s elegant carriage which sported a protective barrier between his team of horses and his passengers. He referred to this wooden guard as a dashboard.
I am familiar with dashboards, but not in the context of horse-drawn carriages. To most people, a dashboard is an instrument panel with dials and displays that enable the driver to gauge the car’s performance. As a director of several public and private boards, I am familiar with business intelligence (BI) dashboards that provide an at-a-glance view of key performance indicators (KPIs) such as sales, cost-of-goods sold, and days receivable. These dashboards provide a progress report or scorecard displaying the status of KPIs and other metrics in an easy to understand format, often a visual representation in terms of pie charts, bar charts and graphs. A dashboard is often the most important tool for a board’s oversight and control of corporate performance.
I assumed the business intelligence dashboard had derived from the automobile dashboard. I had not realized that the latter had derived from the wooden board (sometimes a leather apron) placed at the front of a carriage to protect the driver and his passengers from the mud and water thrown up by the horses’ hooves as they dashed over the countryside. Early motor vehicles also left the driver exposed to the elements, so the automotive dashboard initially served the same purpose as that for horse-drawn carriages.
Today’s BI dashboards have come a long way from horse-drawn carriages on muddy roads. Yet their primary purpose has remained the same, to help ensure visibility. A BI dashboard provides a clear and continually updated view of key performance indicators that record results and illustrate trends. For example, a chemical company may closely monitor trends such as safety incidents; a retail operation, trends in same store sales; an insurance company, trends in statutory reserves. The dashboard provides a powerful tool for tracking trends in key areas, enabling quick, corrective responses.
In this issue of Directors & Boards, we take up the issue of “corporate democracy,” with a focus on the shareholder meeting. Democracy is predicated on visibility and transparency, which rely on timely, accurate, and insightful information. A dashboard provides clear and concise information about the health of an enterprise, and an abridged version can be a very effective means of communicating clearly and concisely to shareholders at the annual meeting. If your board does not have a dashboard, I strongly recommend that you build one.