Most of our Scorecard metrics are just smaller, weekly versions of lagging indicators, like weekly revenue closed or weekly invoices sent. How do we audit our current Scorecard to weed out these lagging numbers and replace them with true activity-based leading indicators?

Question

Tyler Smith · Accepted Answer

Running a business on lagging indicators is like driving a car by looking solely in the rearview mirror. If your Scorecard is dominated by weekly revenue, invoices sent, or projects completed, you are tracking history. To audit your Scorecard, review every metric and ask a simple question. If this number goes red, do we still have time to change the outcome before the end of the month? If the answer is no, it is a lagging indicator. To replace these lagging numbers, you must trace the process backward to find the leading activities. For weekly revenue closed, look at the activities that feed the sales pipeline. Your leading indicators might be the number of initial discovery calls booked or the number of proposals submitted. For weekly invoices sent, the leading indicators could be billable hours logged or milestones approved by clients. For project delivery, focus on kickoff meetings scheduled or design proofs sent for approval. True leading indicators are activity-based and entirely within your team's control. They give you an objective, early warning system. When a leading indicator goes red on your weekly Scorecard, it alerts your leadership team to an issue that will impact your financial performance weeks or months down the line. This allows you to bring the metric to the Issues List and use the IDS® process to solve the root cause during your Level 10 Meeting™ before the lagging financial results suffer.