Strategy

11th May 2017

Leading Indicators

A leading indicator is a predictor of what is likely to happen. So often in business we focus on lagging indicators; what has happened rather than leading indicators, what will happen. Management accounts for example are lagging indicators, as are last week’s sales figures or todays scores. They are important to know but you can’t do anything to change them.

Leading indicators signal what is likely to happen. Website hits, enquiry levels, footfall and incoming phone calls could all be good leading indicators. These are the things we should be focussing on more because these are the things that will precede and predict the results we are going to be generating.

The two biggest indicators of where your business will be in 6 months time are the morale of your team today and the morale of your clients today so how much effort do we put in to ensuring either of these measurements are maximised, I wonder?

I have been privileged to see the effects that having the right people in the right jobs can have on a business, on very many occasions. When those people are motivated and capable of performing at a high level the effect is simply stunning. When you can create an environment that also means that the individuals are working together as a team with a common purpose and a clear vision you kick into action a multiplier effect that has to be experienced to be believed. In his book The Unstoppables, Bill Schley reminds us that “Teams are the ultimate multiplier for success that there is.”  We would be foolish not to recognise this fact and to leverage it. I wonder how many leaders really dedicate enough time, effort and skill to develop the teams they lead and how skilful and competent they are at doing that.

Someone once described the purpose of any business as being to create raving fans. When a customer becomes a raving fan, she becomes more than a customer, more than an advocate even. She becomes your best salesperson, singing your praises to everyone she encounters and praising you and your firm with every anecdote. Again I wonder how many of us give this area of our business the attention we should. The online retailer Zappos, which grew to over $1Billion in sales did so on the back of their culture. The Zappos Family Core Values lists “create wow through service” as their first, their number one value. Creating wow through service is way more than giving good service. It is about going about the business of their business in a way that customers don’t expect, that takes their breath away. It inevitably creates raving fans. If you want to know what that looks like download their latest ‘Culture Book’, a collection of verbatim, unedited and unsolicited testimonials from team members, suppliers and customers alike.

So when you go to the office tomorrow I wonder, where in your list of priorities, will managing the morale of your team and the morale of your clients be?