I understand that lagging indicators tell us what already happened, but our team keeps putting lagging financial results on the weekly Scorecard because they are easy to measure. How do we practically force our department heads to identify and track true weekly leading indicators instead of historical summaries?

Question

Tyler Smith · Accepted Answer

The reason your team keeps putting lagging indicators on the Scorecard is because they are easy to pull and feel comfortable to look at. Lagging indicators like monthly revenue or net profit are historical. They tell you what happened last month, which is far too late for you to do anything about it. To run a proactive business, you must force your leadership team to shift their focus upstream to leading indicators.

A leading indicator measures an activity that directly predicts a future result. For example, if your lagging indicator is signed contracts, your leading indicators might be outbound sales calls, discovery meetings booked, or proposals sent. If you do not hit your weekly target for discovery meetings today, you can guarantee your signed contracts will drop in four weeks.

To force this shift, challenge each department head on your Accountability Chart to identify the single daily or weekly action that must happen for their department to succeed. For operations, it might be raw material orders placed. For customer service, it might be support tickets resolved within two hours. If they present a number that cannot be altered by changing behaviors this week, reject it. Keep pushing them upstream until you are tracking raw activities. When you manage the weekly activities, the lagging financial results take care of themselves.