Lag Measures vs. Lead Measures
Lag Measures are stressful
I realized that I often get most stressed about goals that are measured by something I will achieve in the future:
- Increase sales by 20%
- Make an additional $2M in profit
- Have a blog with 1000 readers
- Gaining 5kg of muscle mass in 3 months etc.
The issue is, that by the time you see them come to fruition (or not), the performance that drove them has already passed. So right now in this moment, those high level goals are pretty useless to predict future success and even worse at telling us how we get there. That's why they are stressing us out!
Focus onLead Measures
But there are critical daily activities that drive, or lead to the lag measures described above and are under our direct control:
- Send five highly targeted outbound emails to potential clients per week
- Work four hours per week on the new partnership program
- Write one blog post per week
- Go to the gym for one hour on Monday, Wednesday and Friday
Example: Calculate your success probability
Obviously, its a whole other topic to define THE RIGHT lead measure for your goals. But you can gauge or even calculate your probability of success.
Lag Measure: Increase revenue by 20% this year from $1M to $1.2M ($200'000).
Lead measure: Send five highly targeted emails to potential clients per week.
Projection:
- Average emails sent per month: 20
- Average discovery calls resulting from those emails: 10
- Average meetings resulting from those calls: 5
- Proposals you can send: 3
- Contracts won: 1
- Average contract value: $50'000
So in this fictional example it would take you 80 emails over 4 months in order to gain four new clients that bring in the additional $200'000 in revenue.
Even if you are off, and you realize that you don't actually get one client from 20 emails you send out, you are still in control and can adapt your strategy on the go. The crucial thing is: You know you have done something every day, every week, or every month that brings you closer to where you want to be. Action not motion.
To wrap up my thoughts:
It's stressful to evaluate your performance solely by a lag measure like revenue.
Its much more empowering and satisfying to define the concrete activities we can do (and measure) on a regular basis, and which over time are likely to lead to our lofty goals.