Our leadership team is highly comfortable tracking lag metrics like closed revenue and monthly cash, but we are struggling to define activity-based leading indicators. How do we transition our scorecard from a historical record to a forward-looking operational tool?

Question

Tyler Smith · Accepted Answer

Tracking only lagging indicators on your scorecard is like driving a car by looking solely in the rearview mirror. While closed revenue and cash balances are critical numbers, they are the results of activities that happened weeks or months ago. To run a proactive business, you must transition your team to tracking the activities that create those results.

To make this transition, take each of your current lagging indicators and map the chain of events that produces it. If your lag metric is new client contracts, ask what must happen immediately before a contract is signed. The answer is usually a sent proposal.

Go one step further back. What must happen before a proposal is sent? A discovery call or diagnostic assessment must be completed. What must happen before that call? Inbound inquiries must be generated or outbound reach-outs must be made.

The activity-based leading indicators are the outbound reach-outs and the completed discovery calls. These are the numbers that belong on your weekly scorecard. They are entirely within your team's control. By shifting your focus to these weekly inputs, you gain the ability to predict and influence your future financial results long before they hit your bank account.