What to Look for in a KPI Dashboard (And What Most Companies Get Wrong)

A client once showed us their KPI dashboard. It had 47 metrics. Color-coded. Beautifully formatted. And completely useless, because nobody on the leadership team could tell you which 5 metrics actually mattered.

A KPI dashboard should take 30 seconds to read and immediately tell you: are we on track or not? Here’s how to build one that drives decisions instead of decorating a wall.

The 5-8 Rule

Your executive dashboard should have 5-8 metrics. Not 15. Not 30. Five to eight. Each one should directly connect to a strategic priority and be actionable, meaning if the number moves in the wrong direction, you know what lever to pull.

Metrics by Business Model

SaaS

• MRR and MRR growth rate
• Net revenue retention (NRR)
• CAC and CAC payback period
• LTV:CAC ratio
• Gross margin
• Burn rate and runway

E-Commerce

• Revenue and revenue growth
• Average order value (AOV)
• Repeat purchase rate
• Contribution margin by channel
• Inventory turns
• Customer acquisition cost

Professional Services

• Revenue per employee
• Utilization rate
• Gross margin by practice/project
• Pipeline coverage ratio
• Average project value
• Client retention rate

Three Things Every KPI Dashboard Needs

Trends, not snapshots. A single number is meaningless without context. Show at least 6 months of trend data. Is the metric improving, declining, or flat? The direction matters more than the absolute number.

Targets. Every metric needs a target. Without one, you’re just reporting, not managing. Set targets quarterly based on your financial plan and adjust when you reforecast.

Red/yellow/green status. Make it instantly obvious which metrics need attention. Green = on track. Yellow = within 10% of target. Red = more than 10% off target. When something turns red, it should trigger a conversation about root cause and corrective action.

Common Dashboard Mistakes

Vanity metrics: Total registered users, social media followers, and website visits feel good but don’t drive business decisions. Focus on metrics that tie to revenue, profitability, or cash flow.

Lagging-only indicators: Revenue and profit are lagging indicators, they tell you what already happened. Include leading indicators too: pipeline, conversion rates, customer engagement scores. These give you early warning.

No owner: Every metric should have a named person accountable for it. If nobody owns the number, nobody improves the number.

Do This Monday

1. List every metric your company currently tracks. Circle the 5-8 that would actually change your behavior if they moved. Those are your KPIs. Everything else is reporting.
2. For each KPI, write down: current value, target, trend direction, and who owns it. If you can’t answer all four, the metric isn’t ready for the dashboard.
3. Set a weekly 15-minute meeting to review the dashboard with your leadership team. Consistency matters more than perfection.

If you want help building a KPI dashboard that drives decisions, book a free consultation →

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