Our leadership team thinks our Scorecard is full of leading indicators, but we keep getting blindsided by revenue and margin misses. How do we test whether a metric is truly leading or just a slightly earlier lagging indicator?

Question

Tyler Smith · Accepted Answer

Most leadership teams confuse milestone reporting with leading indicators. A metric is not leading simply because it appears on the Scorecard before final accounting closing. If the activity required to change the number has already ended, you are tracking a lagging result.

To test whether a metric is truly leading, ask this question: If this number is red at 2:00 PM on Wednesday, can the seat owner alter their behavior or direct their team to do more work to push it green by Friday afternoon? If the answer is no, it is a lagging indicator.

Consider sales. Tracking signed contracts or proposals delivered sounds proactive, but a proposal delivered is the result of meetings held, qualification calls finished, and discovery completed weeks prior. If signed contracts miss the target this week, there is nothing the sales leader can do today to fix it. The true leading indicators are outbound prospect conversations, initial qualification calls completed, and scheduled site visits. Those are direct activity inputs.

Similarly, billable revenue is lagging, whereas client onboarding milestones delivered on schedule or weekly technician capacity utilization are leading. Shift your Scorecard up the causal chain until you are measuring direct human actions. When your inputs are consistently green, the lagging outputs take care of themselves.