Management by Exception in Data Dashboards

    <p>This podcast serves as a Part II to an earlier episode.&nbsp;In Part I, titled, <a href="https://demystifyingdata.co/making-better-decisions-with-data/" target="_blank">“Making Better Decisions with Data (Episode 9)”</a> Chris outlined basic thinking around how to develop and execute a data project by keeping cause and effect in mind.&nbsp;</p><p>In this second part, Chris continues along this same vein of logic to describe a dashboard reporting philosophy defined best as a Management by Exception approach to reporting.&nbsp;In situations where your outcomes metrics are a score, rating, or otherwise continuous, there will be normal fluctuation.&nbsp;Knowing when something unique is happening becomes critical to effective reporting in these circumstances.</p><p>In this episode, Chris addresses how to develop management by exception approach to your data dashboards by addressing the following key points:</p><ul><li>Variable Type: Not all metrics are created equal.&nbsp;Make sure you understand cause versus effect, inputs versus outcomes; and record the data appropriately.</li><li>More is More: When using a “management by exception” approach to reporting, it’s okay to have a lot of metrics because you’re not going to be trying to react to everything.&nbsp;You’ll only be reporting on metrics that are important and unique.</li><li>Charting Data Over Time: In many cases you’ll be charting metrics over time as either a count or average reading.&nbsp;Connecting these measures over time with a simple line chart will reveal a natural ebb and flow that represents the distribution of the metric.</li><li>Unique Variation: As such, we can use a static called Standard Deviation to identify the likelihood that a given measure of this variation is “normal” or “unique.”&nbsp;The more severe the implications, the less sure we need to be that variation is unique before it warrants our attention</li><li>Management by Exception: A Management by Exception Dashboard is only highlighting those situations where the threshold of tolerance for a metric is reached, and a measure is a “unique occurrences.”</li></ul><p><br></p><p><strong>Links of Interest</strong></p><ul><li>More reading on Management by Exception as a business principle: <a href="https://en.wikipedia.org/wiki/Management_by_exception" target="_blank">https://en.wikipedia.org/wiki/Management_by_exception</a></li></ul><p><br></p>