Our weekly Scorecard tracks key metrics, but they are all lagging indicators like monthly revenue and customer satisfaction. How do we build predictive, leading indicators that allow us to make course corrections before the end of the quarter?

Question

Tyler Smith · Accepted Answer

If your weekly Scorecard is filled with lagging indicators like monthly revenue, net profit, and completed projects, you are managing your business through the rearview mirror. Lagging indicators tell you what happened last month, when it is already too late to change the outcome. To run a proactive organization, you must design a Scorecard focused on leading indicators. A leading indicator measures an activity that directly predicts a future result. For example, instead of tracking signed contracts, track the number of outbound sales calls made or initial discovery meetings booked. If you know that it takes ten discovery meetings to close one contract, monitoring discovery meetings gives you a four-week head start on predicting future revenue. Every seat on your Accountability Chart should have at least one weekly leading metric that the seat owner directly controls. For an operations seat, this might be the weekly system uptime percentage or the number of support tickets resolved within one hour. When these weekly numbers are consistently on track, your quarterly lagging results will take care of themselves. If a leading metric drops, it acts as an early warning system, allowing your team to drop it down to the IDS® list and solve the underlying problem before it impacts your bottom line.