Two kinds of measure.
LAGGING INDICATORS
Results after the fact: revenue, profit, customers lost.
They tell you what happened.
LEADING INDICATORS
Things that predict results: enquiries, quotes issued, pipeline, response times.
They tell you what is coming.
WHY BOTH MATTER
Lagging figures confirm. Leading figures give you time to react.
WHAT MOST BUSINESSES TRACK
Lagging only.
By the time revenue falls, the cause is months old.
EXAMPLES OF USEFUL LEADING INDICATORS
Enquiries this week Quotes outstanding Bookings for next month Customers who have not bought recently Stock approaching depletion
WHAT TO DO WITH THEM
Review weekly, not monthly.
WHAT THAT ENABLES
Acting before the result arrives.
WHAT TO ESTABLISH
Which leading indicators actually predict your results.
HOW
Compare them against results over several periods.
WHAT TO DROP
Leading indicators that predict nothing.