“Leading indicators measure performance and, when used strategically, can deliver a continuum of exceptional results.”
We know in nature, there are indicators of what lies ahead. Like the old sailing adage, “red sky in morning sailor take warning.” A red sky in the morning means lousy weather is coming, and “red sky at night is a sailors delight” means the weather will be good tomorrow.
Indicators are observed and only useful if we can interpret them and have knowledge of there meaning.
Professionally, the ability to interpret indicators and plan accordingly is performance management. In economics, it is the business cycle. Leading indicators always come before the outcome we are interested in, and lagging indicators reveal what has indeed happened.
Why high-performance teams lean heavily on leading indicators.
High performers know that leading indicators predict future performance and continuous improvement. Leading indicators are what we refer to as the “how.” These measures are proactive and report what we are regularly doing. Once we identify “high payoff” activities, the tasks that lead to a repeatable, desired outcome, we can focus our efforts to develop these skills to be more productive. The idea is to master the task at hand and not focus on the outcome. As a leader, we use the quality and quantity of these “high payoff” activities as leading indicators of success.
The drawbacks of managing with lagging indicators.
The major drawback to only using lagging indicators is that they tell us how many outcomes were successful but not “how” we made them happen. You can’t go back and change what happened.
Successful businesses spend much time inspecting performance and with regularity.
In our experience, it is all about leading indicators. The key to performance management is discovering what measurements you need to be taking that predict, repeatable, accurate, and desired outcomes. These become your “high payoff” activities and as a result, your leading indicators. Any increase in the quality and quantity will positively impact future results. Those who experience a long term continuum of success make a significant investment into developing the “how,” the hard, and exceptionally soft skills associated with “high payoff” activities. It is in the successful repetition of the “how” that facilitates a repeatable process for success, and we collectively experience more flow. Teams who experience more flow have lower turnover, and members experience both higher earnings and professional satisfaction. Another dimension of this strategy is that more leaders are developed from within as there is a pool of successful and experienced process experts who can “do” and “teach” a repeatable, proven process for their desired results.
“Flow, also known as the ‘zone,’ is the mental state of operation in which a person performing an activity is fully immersed in a feeling of energized focus, full involvement, and enjoyment in the process of the activity (source: Wikipedia).”
Leading indicators measure performance and, when used strategically, can deliver a continuum of exceptional results. We assist leaders and their staff with ideation and skill development to transition their focus to exploit leading indicators, thus enabling an adaptable strategy for predictable, repeatable, accurate, and profitable outcomes.
Want to experience more flow? The next time you are planning a meeting or a training session, reach out as we offer a variety of half-day and full-day seminars.