We thought our Scorecard was full of leading indicators, but we are still reacting to problems after they happen. How do we audit our metrics to ensure we are tracking upstream actions rather than fast-lagging results?

Question

Tyler Smith · Accepted Answer

Many leadership teams confuse fast-lagging indicators with true leading indicators. A fast-lagging indicator is something that happens quickly after an event, like contracts signed or invoices sent. While these numbers populate faster than monthly financial statements, they are still backward-looking. By the time a contract is signed, the actual work of marketing, qualifying, and pitching happened weeks or months ago.

To audit your Scorecard for true leading indicators, you must trace each result back to its human origin. Ask your team, what is the very first physical activity that must occur to produce this result? For example, instead of tracking proposals submitted, track the number of discovery calls completed. Instead of tracking customer churn, track the number of proactive customer health checks completed by your account managers.

A true leading indicator is always activity-based and completely within your team's control. You cannot control whether a client signs a contract this week, but you can control how many outreach emails your sales team sends.

Go through your Scorecard line by line. If a metric is a result that you cannot directly influence within a single week, it is a lagging indicator. Replace it with the upstream activity that drives it. This shift from results-tracking to activity-tracking gives you an early warning system, allowing you to make adjustments before your revenue or retention numbers take a hit.