Our leadership team is struggling to transition our weekly scorecard from a purely descriptive tool that tells us what happened to a predictive tool that tells us what will happen. How do we define and implement true leading indicators instead of just repackaged lagging indicators?

Question

Tyler Smith · Accepted Answer

Most leadership teams mistakenly fill their scorecard with lagging indicators like revenue, closed sales, and completed projects. These numbers tell you where you have been, not where you are going. If you only look at lagging indicators, you are driving your business by looking in the rearview mirror.

To transition to a predictive scorecard, you must identify the upstream activities that guarantee downstream results. Every lagging indicator has a chain of leading activities that cause it.

For example, if your lagging indicator is new contracts signed, the leading indicator is not pipeline value, which is still a lagging measure of sales activity. The true leading indicator is the number of discovery calls scheduled, or the number of proposal presentations completed this week. If you schedule twenty discovery calls this week, you can predict with mathematical certainty how many contracts will close next month.

To implement this, look at every number on your scorecard and ask: is this an activity or an outcome? If it is an outcome, replace it with the specific, repeatable weekly activity that drives it.

Assign ownership of these activity-based metrics to the corresponding seats on your Accountability Chart. Reviewing these weekly in your Level 10 Meeting™ allows you to spot issues weeks before they show up on your financial statements, giving you time to correct course.