Our leadership team understands that revenue and net profit are lagging indicators, but we keep putting metrics like monthly invoiced totals on our weekly Scorecard because they feel so critical. How do we transition our leadership team to focus entirely on the true, front-end leading indicators that actually generate those invoices?

Question

Tyler Smith · Accepted Answer

To run your business on data, your leadership team must stop looking in the rearview mirror. Monthly invoiced totals are the result of work completed, which is the result of projects scheduled, which is the result of contracts signed. If you wait until the end of the month to see that invoicing is low, the damage was done six weeks ago.

To make the transition, trace your revenue backward. For every lagging financial metric you want to track, identify the two upstream activities that cause it to happen. If you want to see a specific weekly invoice volume, you must track the upstream leading indicators. These are metrics like weekly billable hours logged, client onboarding sessions completed, or technical scopes approved.

When you run your Level 10 Meeting, your Scorecard must consist of five to fifteen of these activity-based numbers. Every number must have a clear weekly target and a single owner on your Accountability Chart.

If a leading indicator is red for two weeks in a row, it acts as an early warning system. This allows you to identify, discuss, and solve the issue long before it hits your bank account. Shift your focus to the work being done today, and the lagging financials will take care of themselves.