When thinking about the most important numbers to measure in your business, most of our clients have
Leading Indicators can help predict what will happen in the future. They let you know if you are on track to achieve the results you want. Leading Indicators are measurable, and you have the ability to influence or move them. If you determine and track Leading Indicator KPIs and make adjustments based on those indicators every week, you will have an execution advantage over your competition.
There’s no magic formula or standard set of Leading Indicators that works for every company. Leading Indicator KPIs only become powerful when you find the right lever to pull that impacts the results that are most important to your business. While we can’t tell you which leading indicators are most important in your business, we do have a proven process for determining the ones that will work for you:
Leading Indicator KPI Step 1: Be clear about the business problem you are trying to solve, or the opportunity you are trying to maximize.
Leading KPI Step 2: Clarify the desired result, and make it SMART by setting success criteria on this result KPI. We use a simple Red-Yellow-Green method.
Leading KPI Indicator Step 3: Dig deeper with questions to determine how you get the results you want. Most people don’t ask enough questions to get to a meaningful underlying Leading Indicator.
Leading Indicator KPI Step 4: Drive results by setting clear success criteria and putting your Leading and Results Indicators on a dashboard to status every week.
One of the most common business problems we hear about is difficulty achieving predictable results in sales and marketing. To help bring this process to life, here’s an example of how you might create a Leading Indicator KPI:
Let’s say that you are having a problem with your marketing strategy. You’re just not able to generate the number of sales-qualified leads that your sales team needs to hit their quotas.This may be an overly simplified example, but I wanted to illustrate how the process works. The marketing team has control over how many events they do to get leads, so this is something measurable and movable. They can begin testing this for a quarter to see if pushing on this lever really does generate the number of leads that they need for their sales team to be successful. If moving this Leading Indicator doesn’t have the impact they intended on the results, they can go back to the questions in Step 3 and pick a different Leading Indicator to test, such as # of content offers on LinkedIn, # of ads in industry publications, etc.
Take a look at your business and pick a problem to tackle this quarter by tracking Leading Indicator KPIs. See what you can influence to get the results you want, and measure it all in your dashboard, and talk about it in your weekly staff meetings. Good luck!
25 KPI Examples for Manufacturing Companies
Employee KPI Examples: How to Measure What (or Who) You Want to Move (Video)
KPI Examples for Successful Sales Teams
Rhythm Systems KPI Resource Center
Photo Credit: iStock by Getty Images