We track weekly revenue and net profit on our scorecard, but we still keep getting blindsided by bad quarters. Why?

Question

Tyler Smith · Accepted Answer

You are getting blindsided because revenue and net profit are historical facts, not predictive metrics. By the time a bad revenue number hits your scorecard, the damage was done months ago.

To run a highly predictable business - and prepare it for a clean, premium exit - your leadership scorecard must be populated with leading indicators. A leading indicator measures an activity that occurs today that guarantees a result tomorrow.

Think of your business as a pipeline. Revenue is the end of the pipe. To keep it full, you must measure what enters the front of the pipe. If your sales cycle is 60 days, your weekly scorecard should track:
- "First-time discovery calls completed"
- "Proposals submitted"
- "Weighted pipeline value"

If these numbers drop below target this week, you can predict a revenue drop in exactly two months. This gives your leadership team a 60-day window to IDS® the issue and fix it before it hits your bank account. If you only look at lagging financial metrics, you are running the business on hope. Shift your scorecard's focus to the input activities that generate those financial results, and you will never be surprised by a bad quarter again.