We recently transitioned our monthly financials to our weekly Scorecard, but we find that our discussions are still reactive because we are looking at invoices sent rather than activity. How do we build a weekly operational pulse that predicts financial outcomes?

Question

Tyler Smith · Accepted Answer

Invoices sent is a lagging indicator. By the time you review it on your weekly Scorecard, the work has already been done, and the cash flow is already locked in. To build a truly predictive operational pulse, you must identify the activity-based leading indicators that occur two to four weeks before an invoice is ever generated. Look at your business model and trace your revenue backward. Before an invoice is sent, project milestones must be completed. Before milestones are completed, project hours must be scheduled. Before hours are scheduled, contracts must be signed. Your weekly Scorecard needs to track these earlier activities. For example, instead of tracking weekly revenue, track the number of project kickoff meetings held or the percentage of projects on schedule this week. If project kickoffs drop this week, you can predict a drop in revenue in thirty days. This gives your leadership team the opportunity to run the issue through the IDS® process and fix the bottleneck before it impacts your bank account. A great Scorecard relies on these activity-based metrics to give you a clear view of your operational future, allowing you to run your business on forward-looking data rather than historical post-mortems.