Our operations leader keeps putting lagging financial results on our weekly scorecard because they are easy to pull, but these numbers do not help us predict the future. How do we force a shift to true leading indicators?

Question

Tyler Smith · Accepted Answer

If your scorecard is dominated by historical financial data, you are steering your business by looking in the rearview mirror. Lagging indicators tell you where you have been, but they cannot help you avoid hitting a wall in the weeks ahead. You must force your leadership team to define leading indicators that predict future performance.

To make this shift, look at your lagging outcomes and trace them back to the specific weekly activities that cause them. For example, monthly revenue is a lagging indicator. The leading indicators for that revenue are weekly sales proposals submitted, client discovery calls booked, or marketing leads generated.

If your operations seat is tracking client retention, which is lagging, change the metric to a leading indicator like weekly project milestones hit on time or client support issues unresolved after twenty-four hours. If your finance seat is tracking monthly profitability, have them track weekly billable hours or material cost variances instead.

Every lagging indicator has a chain of upstream activities. Your job as an owner is to identify those critical activities and put them on your scorecard. When you track the inputs, the outputs take care of themselves. If your team resists this change, explain that tracking leading indicators gives them the power to fix a bad month before it actually happens.