The Psychology Behind Business Dashboards

Within the past decade, dashboards have become an increasingly popular way for businesses to internally display data. But, why is this? For one, they are ‘eye candy’ when compared to an excel spreadsheet. However, it’s more than just the visual aspect that makes it such a great way to house your data. The dashboard layout simplifies complicated data using charts and graphics that are easily comprehended. In other words, you do not have to be a statistician or even a data analyst to understand the significance of critical data. In turn, you can use it to make crucial business decisions autonomously. Diving in even deeper, there are actual psychological factors to back up its prevalence and prominence in the business world today. Some of these factors include:

Need to Organize

It can be difficult to navigate spreadsheets of chaotic data. Valuable information may seem meaningless and even get lost in the disarray without some sort of uniformity and organization. The desire for order is a part of human nature. We try to catalog things around us to better understand them and have done so for years. This brings us to the question - Is having some sort of organization a requirement to help us to function to the best of our ability? History shows that it very well may be. Humans have been categorizing for hundreds and even thousands of years. From the formation of government and monarchies as a way to organize an empire, to categorizing people by status and social class, to some smaller examples from today, like keeping to-do lists or Google calendars detailing everything from doctors’ appointments to when to take the dog for a walk. The need for organization is in our blood. To further express human’s love of organization, there are even social media pages devoted to showing hyper-organized photos because some people find them satisfying and even calming to look at.  Looking at business dashboards, the displayed data is organized by personal preference that highlights key KPIs. These KPIs help us to zone in on problems to solve and opportunities to capitalize on. This organization helps us to better understand and digest our data quickly. Thus, allowing us to implement the data we have to make better overall business decisions.

Need for Autonomy

According to the self-determination theory, autonomy is an essential psychological need, along with competence and relatedness. Autonomy serves to satisfy the human desire for power and control. Humans want to be able to think, come up with ideas, and find solutions to pressing issues all on their own. A vital asset of a business dashboard is being able to understand data without the assistance or need of a data analyst. Being able to analyze data autonomously allows individuals to look at and drill down the data on their own and as a result be able to make business decisions and conclusions without hearing other’s opinions and ideas. With a data dashboard, decisions can be made without bias or coercion which is crucial in making the best possible decision for your business.

Need for Instant Gratification

With a robust data analytics solution, data can be accessed and updated continuously, making real-time KPIs ready to use at a moment’s notice. This increased efficiency is a considerable benefit to using data analytics solutions as it lets you make quick and accurate decisions whenever changes may arise. This is an advantage when comparing to excel files of data, which require much more time and effort to drill down in and isolate KPIs. Looking at this benefit from a psychological standpoint, in this age specifically, instant gratification and convenience is something we seek (and in many cases, can have) in every aspect of Information can be found instantaneously with a quick Google search. People can be contacted at a moment’s notice through a text or call. We can become aware of major news events with an alert sent to our phones and we can even have packages delivered the same day we placed the order. With the diminishing need to wait, we become less patient as individuals and as an overall culture. The instant gratification factor that these dashboards provide is a huge benefit and even serve to satisfy a need within the age we live in today. our lives.