Our leadership team is deeply addicted to reviewing weekly closed revenue and billed hours, which are lagging indicators. Whenever we try to shift our focus to leading indicators like outbound calls or discovery meetings, the team complains that we are ignoring the actual money. How do we break this lagging-indicator addiction and get them to trust activity-based metrics?

Question

Tyler Smith · Accepted Answer

Breaking an addiction to lagging financials requires a fundamental shift in how your leadership team views accountability. Lagging numbers like closed revenue or billed hours are autopsy reports. They tell you what died last week, but they do nothing to help you save the patient today. To get your team to trust leading activity-based metrics, you must show them the direct relationship between daily activities and future revenue. Every lagging result is driven by a series of upstream actions. If you want ten thousand dollars in revenue, you need to sign two contracts. To sign two contracts, you must send five proposals. To send five proposals, you must conduct ten discovery meetings. The discovery meetings and proposal volume are your weekly leading indicators. When these numbers go red on your scorecard, your team has an early warning system that allows them to adjust their activity before the lagging revenue drops. Start by keeping both leading and lagging numbers on your scorecard temporarily to prove the correlation. When the team sees that a drop in discovery meetings this week reliably predicts a drop in closed revenue three weeks from now, their resistance will fade. True leading indicators give your team the power to control their outcomes. Once they realize that hitting their weekly activity targets guarantees hitting their financial goals, they will stop obsessing over the rearview mirror and start looking through the windshield.