By Gary Minor
It takes more than setting a goal to make it a reality. Whether it is a professional goal, such as selling $10,000 worth of product, or a personal goal, like losing 10 pounds, you must pay attention to both your progress towards your goal, as well as the specific activity you intend to perform in order to reach that goal.
Let’s say you set a goal to sell $500,000 worth of widgets this quarter. Track dollars to see how you are progressing towards that goal. Also, you know that by setting eight appointments per week, you have sold on average $250,000 worth of widgets per quarter. Based on your own data, you know that if you set eight appointments per week, you will very likely reach 50 percent of your goal. In order to double that, you must double your appointments.
If you only track dollars, you are only counting after the activity is over, so you have a lagging indicator of your performance. What about the appointments? If you can only count eight appointments per week for the first three weeks of the quarter, will this activity level lead you to your goal? Your own data tells you “no.” So, if you count appointments on the front end, can you predict with some degree of accuracy, what the sales number will look like later on? Yes, you can. Appointments are a leading indicator.
In order to stay on track to reach your goal, you must track both leading and lagging indicators. In this case, appointments on the calendar (leading) can predict dollars in the bank (lagging). Outbound sales calls (leading) lead to closed deals (lagging). The amount of raw material put into the system (leading) will predict finished material on the back end (lagging). Calories eaten today (leading) will predict a result on the scale tomorrow (lagging). And so on.
How can you use this in your own work? If you manage a sales team and everyone has a $500,000 quarterly goal, all you have to do is look at their calendars every week and you can predict their sales results. You may know this intuitively if you have done it for a long time, but now you can teach them how to track their own likelihood of success.
In a more complicated example, if you are the full-time recruiter for a chain of retail stores and you need to keep 300 managers’ slots filled with trained people and your turnover averages 19 percent per year, or 57 managers, how many people should be in the process, somewhere between second interview and finished with formal training? You should offer at least 57. Your own data tells you how many people will likely leave this year, so shouldn’t that number be in your recruiting pipeline? If not, you will always be in the position of playing catch-up and filing empty slots, rather than having people ready to go to a store shortly after a vacancy occurs.
Are you in the habit of tracking and scaling your business based solely on lagging indicators? I invite you (or challenge you, if that resonates better) to pay attention to your own data, find the trends and add a few leading indicators, as well. Your goals will be much easier to reach if you pay attention to both, and you share this process with your team.
Gary Minor is a People/Process Coach at Petra Coach. As an international “roll-up your sleeves” coach, he has helped business leaders around the globe, from South Korea to Scotland, get to the real issues and help them get to their highest level of success. Contact Gary at [email protected]