How Organizations Can Use Lag and Lead Measures to Drive Progress
The following is adapted from It’s Never Just Business.
When your team sets a goal at work, how do you track progress to see how you’re doing? Are you more prone to using a lag measure or a lead measure?
Uh oh, did I lose you?
The terms “lag measure” and “lead measure” may sound like corporate jargon, but they’re actually good ways for teams to measure their progress against a goal.
If you’re not familiar with these approaches, let’s walk through each one in this article.
Lag Measures vs. Lead Measures
People are generally familiar with lag measures because it’s the traditional approach to measuring progress. Here’s how it usually works: a company sets a financial goal, the team puts in some effort, and then they look at the financial report at the end of each week to determine where they are against the plan. If they are behind, all they can do is work harder, because they can’t influence the past. That time is lost.
There is a lag between their effort and finding out if they’re on track or not. With that being said, you can see why it’s true that failure is a lag measure.
Lead measures, on the other hand, are predictive of the intended outcome.
To develop lead measures for a financial goal, you work with your team to identify the activities necessary to accomplish that goal. In consulting sales, qualified proposals are definitely a lead measure toward a financial goal. If you don’t have proposals out, you don’t have any deals in the pipeline, which is bad if you are trying to hit a financial goal.
So, if your team agrees that proposals are the best lead measure, then you have to determine how many qualified proposals the team needs to send out each week.
Let’s assume the team agreed on a target of thirty proposals per week. In the first week, only twenty-five have been sent out by Thursday. It’s time to rally the team and hit the phones. On the other hand, if thirty-two proposals have been sent out by Thursday, maybe everyone gets to work a half day Friday. (I’m joking… sort of!)
Lag Measures Can Support Lead Measures
With this example, you would still use the lag measure of reviewing the financial results at the end of the week, but for the purpose of refining your lead measure.
If you hit thirty each week for three weeks, but you’re behind on your overall financial goals, you should look at increasing your lead measure target. If you are at thirty and seriously exceeding your financial goal, you could think about decreasing the lead measure target if your team is killing themselves to get thirty proposals out.
Another lead measure example is to measure your food intake and exercise if you want to lose weight. It’s not unusual for people to set a weight loss goal and be disappointed at the end of the week when they are behind their goal at the weigh-in.
If you have been sedentary and eating whatever you want, it wouldn’t be crazy to assume you would lose weight if you committed to walking three miles, five days a week and limiting your food intake to two thousand calories per day.
Then, instead of waiting until the end of the week to get on the scale, measure the number of days you put in three miles and kept it under two thousand calories. If you didn’t stick to your lead measure target, you won’t hit your lag measure the goal.
Listening is a Lead Measure
The next time you collaborate with a team member to define a necessary outcome, don’t ask if they are clear on the “what” by “when.” Ask them to run you through their understanding of the commitment and what their next steps will be.
What they describe is predictive of the results you are going to get.
If their explanation does not sound like the outcome you need, it’s not semantics; it’s a clear indicator that you were not on the same page. Now, instead of waiting days to learn they were unclear, you can clarify in the moment.
Continue working to get aligned until what they describe and their chosen next steps sound like they will accomplish the outcome you are expecting.
This isn’t micromanagement. Your team member is determining the next steps and describing what they think they have just committed to. By doing this, you are saving the time that would be lost if they weren’t truly clear and preventing them from the negative emotions associated with working hard on something that doesn’t hit the mark.
The next time you ask someone if they are clear on something and they say yes, remember all of the times that wasn’t true and laugh at yourself.
Then ask them to clarify their understanding and next steps.
For more advice on using lag measures and lead measure to track progress, you can find It’s Never Just Business on Amazon.