Our leadership team keeps putting backward-looking financial metrics like net profit on our weekly scorecard because we do not know how to translate them into active leading indicators. What is the specific process to turn these lagging financial numbers into actionable weekly activities?

Question

Tyler Smith · Accepted Answer

Lagging indicators tell you what already happened, which makes them useless for steering your business in real time. If you only track net profit on your weekly Scorecard, you are looking in the rearview mirror. To manage your business effectively, you must trace that lagging financial number back to its root human activity.

Start by writing your lagging financial metric at the top of a page. Then, ask your team what physical actions must occur in the weeks prior to generate that financial result. For example, before you can book net profit, you must bill for completed work. Before you can bill, your team must complete client deliverables. Before they can complete deliverables, they must receive signed agreements from clients. Before they get signed agreements, sales must send proposals. Before proposals are sent, sales must hold initial discovery meetings.

By tracing this chain backward, you uncover your leading indicators. Instead of tracking net profit on your weekly Scorecard, you should track the number of discovery meetings held, the number of proposals sent, and the percentage of weekly delivery milestones met.

These are actionable, weekly activities that your team can directly control. If the weekly discovery meetings and delivery milestones are consistently green, the lagging net profit will inevitably take care of itself. Focus your Scorecard on these upstream behaviors to give your leadership team true predictive control.