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Leading and Lagging Indicators

A few weeks ago, we revisited 90-second Goal setting to launch your 4th quarter with success.  Ultimately, the activities that lead to achieving your goals are called Leading Activities.  For sales, when you think of leading activities, you may think about prospecting activities like phone calls, cold calls, walk-in, networking meetings, connect meetings, referral conversations, etc.

Since the results lag behind the activities, they are said to be lagging.

The only control we have over lagging indicators is through leading activities. 

In nature that is pretty obvious, because if you don’t sow the seeds (leading activity) you won’t reap a harvest (lagging results).  Can you imagine the farmer who didn’t plant seeds complaining at harvest time?  There he stands at the edge of the field with his fists clenched in dismay that he skipped planting, but still watered, weeded, fertilized and tending the fields, but still no growth.

Regularly I meet with sales professionals that complain about their results and ask for better closing techniques, better leads, or complain that their prospects make decisions too slowly.  Frequently, however, upon further analysis, we often uncover that a little more leading activity would close the gap.

There are typically a handful of activities that make up most of the work that must be done to achieve your goals.  When we measure these activities they become Key Performance Indicators or KPI’s.

What is a Key Performance Indicator (KPI)

KPIs evaluate the success of an organization or of a particular activity in which it engages. Often success is simply the repeated, periodic achievement of some levels of operational goal (e.g. zero defects, 10/10 customer satisfaction, etc.), and sometimes success is defined in terms of making progress toward strategic goals.

If you were attempting to take off in an airplane, one of your key performance indicators you’d be paying attention to is the AirSpeed.  Depending on the airplane you are flying a minimum airspeed is required for lift, much like different goals require more or fewer activities or KPIs to be successful.  A Cessna 150 requires about 55 knots depending on the weight of passengers and payload whereas a jetliner may require upwards of  150 knots.

What is the difference between Leading and Lagging KPIs

Leading = Activity – When it comes to sales and prospecting, what are some examples of Leading KPIs you could have?

Lagging = Results – When it comes to sales and prospecting, what are some examples of Lagging KPIs you could have?

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