Most companies tend to study the traditional barometers of performance, such as revenues, revenues as a percentage of targets, and quota attainment as a percentage of salesperson sales quota.

These are your classic ‘lag’ indicators. They lag because they typically come a few days after a reporting period closes, with the lag occurring as companies wait for the final numbers and do their calculations.

Lag indicators are concrete, illustrative and unchanging. But they also indicate performance in a period in the past, one that you can’t change or influence.

Leading indicators do what you think they might, namely give an indication of future performance. The size of your sales pipeline, for example, gives you a sense of how close you are to achieving your sales targets, given what you know about your sales cycle and your conversion rates.

Other lead indicators might be behavioural, especially if you’re looking to measure the new behaviours you want to see if you are to change the way you do things.

This is the power of leading indicators. You don’t have to wait for the lag indicators to see if you’re making progress, because then it might be too late. You can monitor the leading indicators and either confirm you’re on track, or make the necessary alterations and correct your course before it’s too late.

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