Our executive team is addicted to reviewing monthly profit and loss statements, but this lagging data does not help us pivot mid-month. How do we shift our collective mindset from monitoring historical financial reports to managing our business through weekly leading indicators?

Question

Tyler Smith · Accepted Answer

To transition from lagging financials to weekly leading indicators, you must first change how you view data. Lagging indicators like net profit or monthly revenue tell you what happened. They are an autopsy. Leading indicators tell you what is going to happen. They are your headlights.

To make this shift, look at your primary lagging financial metrics and work backward to identify the human activity that generates them. For example, if your lagging goal is monthly revenue, look at the activities that feed it, such as client onboarding calls completed or outbound sales proposals sent. Each of these activities happens in a seven-day window. You must assign ownership of these activities to specific seats on your Accountability Chart.

In your weekly Level 10 Meeting™, review these numbers with a forward-looking lens. If the activity targets are missed, drop them down to the IDS® section immediately. Do not wait for the monthly financial statements to show a drop in revenue. You must teach your leadership team to treat a missed weekly activity target as an early warning of a future financial miss. When you consistently run on leading indicators, you gain the power to adjust operations before a bad week turns into a bad quarter. This discipline creates a highly predictable business model, which is exactly what sophisticated buyers look for during exit due diligence.