My leadership team keeps putting lagging financial metrics like monthly revenue and gross margin on our weekly scorecard, claiming they need to see these to know if we are winning. How do I get them to stop looking in the rearview mirror and focus on leading activity-based numbers?

Question

Tyler Smith · Accepted Answer

Lagging financial metrics like monthly revenue, net profit, and gross margin are history. By the time you see them on your weekly scorecard, the actions that caused them happened weeks or months ago. You cannot manage a business looking through the rearview mirror. To get your leadership team to shift their focus, you must teach them the power of weekly leading indicators.

Every lagging financial metric is driven by upstream activities. Your job is to identify and track those activities. For example, if your lagging goal is monthly revenue, your leading indicators might be the number of outbound discovery calls made, the number of proposals submitted, or the active project pipeline value. If those leading indicators are green, the lagging revenue will take care of itself.

To make this shift, challenge your leadership team during your next Level 10 Meeting. For every lagging number they want to track, ask them what specific daily or weekly activity must occur to generate that result. That activity is your leading indicator.

Your weekly scorecard must consist of 5 to 15 of these leading, activity-based metrics. This allows your team to spot issues early and adjust course before the lagging financials are impacted. If your weekly scorecard is filled with historical financial data, you are sacrificing your ability to be proactive. Shift your focus to the work being done today to guarantee the financial results of tomorrow.