We understand that our weekly scorecard needs leading indicators instead of lagging financials, but we are struggling to define what actually makes a metric a true leading indicator. How do we map a lagging goal back to a weekly activity?

Question

Tyler Smith · Accepted Answer

Think of lagging indicators as the output and leading indicators as the input. A lagging indicator, like monthly revenue or customer retention, tells you what has already happened. You cannot change it, you can only measure it. A leading indicator is a current activity that directly influences that future result and can be adjusted in real time. To map a lagging goal back to a leading indicator, work backward. If your lagging goal is to sign three new clients per month, look at your sales process. How many proposals do you need to send to get three signings? Let us say it is six proposals. How many discovery calls do you need to make to send six proposals? Let us say it is twelve calls. How many outbound touches does it take to get twelve calls? Let us say it is fifty touches. Your weekly scorecard metric is fifty outbound touches. By tracking and hitting this activity-based number every week, the lagging revenue target takes care of itself. If the touches are green but the revenue is red, you have a process issue. If the touches are red, you have an accountability issue.