Driving Business Success with Leading and Lagging Indicators

Hey there! It's Alyson Caffrey, and I'm here with another quick dose of operational wisdom. 

Today, we're diving into a crucial concept – leading versus lagging indicators.

This can truly transform how you approach your business and life, setting you on a path to achieving remarkable results.

If you want the quick and dirty 3-minute version of this, check out my 3-minute ops tips video on Cracking the Code: Leading vs. Lagging Indicators

The 'Why' Behind Leading vs. Lagging Indicators

Have you ever found yourself at the end of the month or quarter, scratching your head and wondering why your business or projects aren't where you thought they'd be? 

It happens to the best of us, so here's the thing: don't be too hard on yourself.

The first step is to acknowledge that your results are simply outcomes of behaviors. 

So, how can you change these behaviors and make tracking more than just a guessing game? The answer lies in leading and lagging indicators.

Cracking the Lagging Indicators

Let's start with the more familiar of the two: Lagging Indicators. 

These are your final numbers, the outcomes. They represent how much you've spent, how many deals you've closed, or the number of new leads you've brought into your business through your marketing efforts. 

These are the results – the endgame. 

Unfortunately, you can't travel back in time to alter them, but you can shape the future.

Unlocking the Potential of Leading Indicators

This is where Leading Indicators come into play. 

Unlike lagging indicators, you have control over leading indicators. They are the activities, behaviors, and habits that statistically contribute to achieving those coveted outcomes. 

Imagine you're a basketball player striving to improve your free-throw percentage. Practicing a hundred free throws at the end of every practice session is a prime example of a leading indicator. 

It's an activity that statistically increases your chances of achieving the lagging indicator – a higher free-throw percentage.

Applying the Concept in Business

Suppose you're determined to boost your overall revenue or increase sales for a specific product. 

Leading indicators might include additional marketing efforts, collaborations with other communities, or dedicating time to cold calls. 

These are all proven activities that, when consistently executed, statistically lead to higher conversion rates, hence increased revenue.

Scorecarding: Balancing Leading and Lagging

As you track metrics and create scorecards in your business, it's essential to focus on the habits and activities that influence your outcomes. View your scorecard through the lens of both leading and lagging indicators. 

By nurturing positive habits tied to your leading indicators, you're steering your business towards those desired outcomes.

So, next time you're wondering why you haven't hit certain milestones or achieved expected results, remember the power of leading versus lagging indicators. 

Take control, make purposeful changes in your behaviors, and watch your business transform.

I hope this insight empowers you to develop amazing habits for your business and personal life. 

The journey to achieving outstanding results begins with understanding the power of leading and lagging indicators. 

If you want the 17-minute training for Digital and Creative Agency Owners on how to set up their Operations, DM me “17” and I’ll send it to you absolutely FREE! 

Stay tuned for more quick and practical operational tips. Until next time!