3 indicators to effectively lead outcomes as a leader

Lagging Indicators

These are things the the world cares about and wants to celebrate/crucify and if complete would say you’ve done a good job! Net Sales, Profitability, Cost Savings, Margins are just examples of KPIs that fall into this bucket. It is anything that happens after an event occurs. A collection of such lagging indicators usually provide a trend to clarify the future.

Leading Indicators

Leading indicators give a view into the future. For example, if the order book for a given quarter is great, you can tell with reasonable belief that the sales will be good. Similarly if a given campaign is progressing well with the click thru rate or conversion rate, the campaign ROAS would be good, and if we are producing enough inventory chances are the service levels will be good.

Learning Indicators

Learning indicators are the toughest. These are the ones that tell you what you need to quickly learn along the way. They are underrated, ignored. For example, if you are losing a deal due to pricing consistently, you would want to know that right away so you can course correct the leading indicators. Similarly, if the campaigns are failing because for certain reason, you would want to know that as soon as you can and fix it.

It’s a indicator for an indicator

I often get this from people. It is indicator for an indicator for an indicator. If you want to shed 50 pounds, and you don’t keep track of how much you are losing every month, and which food + exercise combination gives you the best outcome, then chances are you are not going to shed 50 pounds.

Balancing culture and behavior

Over indexing on value and outcomes can set up a culture with unintended consequences. Yes it is important to achieve the outcomes but it should be built on the right foundations and should be able to scale.

  • Foundations. The one indicator that basically tells you if the right principles and foundations are being adhered to and the recipient is finding value. It manifests as a Net Promoter Score (NPS), Survey outcomes, project deliverables, or adherence to certain non-negotiable things.
  • Value. This is the value metric. As much as possible trying to connect the foundations work to the value becomes important. You will intuitively notice that not all foundations contribute to today’s work but are much needed for a sustainable tomorrow. It usually manifests as EBITDA, ROAS, Savings, Service Levels, or some other similar business metric that translates into tangible $ value.
  • Scale. It is a measure of your ability to create value at scale. Usually this helps you get to the lagging indicator.

It is dizzying…

Yes but you do this every day today just as a frustrating after thought. You can may be use the simple table below. You can simply write down your portion and give it to your team, have them think about it, and give it back to you. Have a team discussion to connect these and get clear!

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