Learning to leverage lead measures and lag measures

Lead measures and lag measures? What exactly are they, and how can they help my business?  In business there seems to be a never-ending discussion about data. Which metrics are important? Should you get data on every part of the marketing funnel? Once you collect the data, how do you analyze it, and what changes can you implement as a result? The bottom line is always:  How can the data collected on your actions improve your business?

A brilliant answer to these questions came from the minds of Chris McChesney and Sean Covey (yes, the son of the famous Stephen Covey of 7 Habits of Highly Effective People fame!  In their book The 4 disciplines of Execution, they made the distinction between two types of data. They named these two types of data lead measures and lag measures.

What is a lag measure?

Much of the data we gather in business are lag measures. Lag measures focus on the goals you want to achieve, the end result.  Maybe you want to increase the number of visitors to your website, or get more subscribers to your newsletter.  The metrics we usually gather on such goals are called lag measures. This is because we only gather data after the event has already happened: they lag behind the action.  For example, we gather data at the end of month to see how many visitors we had to the website.  

What is a lead measure?

What McChesney and Covey suggested was to focus on what they called lead measures.  Lead measures happen before the action takes place, and they have two conditions.  Something is a lead measures if:

  1.  It is in our control
  2. We believe that if we do this consistently, our lag measures will improve.

A great example of this comes from McChesney and Covey.  While you can’t control how often your car breaks down by the side of the road (lag measure) you can control how often you do preventive maintenance (lead measure).  The belief is that I have control over how often I do vehicle maintenance, and if I do those lead measures consistently, it will improve my lag measures, and I won’t break down by the side of the road as often.

Using lead measures to improve business

Think about what kind of lag measures you use in your business.  Let’s say that your goal is to get more clients each month. Are you collecting data on how many new clients you have each month?  The data you collect will be on lag measures.  You know this is a lag measure because you can’t know the answer to that until the end of the month! You then look at the old data gathered over the last 30 days and make some guesses as to how that number came about.

Now switch your thinking to generating lead measures. If you wanted to increase the amount of new clients you get each month, ask yourself what kind of actions could you take that are in your control, and you believe that if you did these actions consistently, your lag measures would go up, in this case, the amount of new clients you get each month.  Those are your lead measures, and these are the actions on which you will collect data.

Perhaps you believe that if  you keep track of how many cold calls your sales forces makes, your total number of new clients per month will increase.  Does that meet the two question quiz?  

  1. Is making more cold calls in your control?  Yes! 
  2. If you do more cold calls consistently, is there a good likelihood that the number of new clients will increase?  Most certainly! 

Then that is a good lead measure, and one you should implement and start collecting data on immediately.

Changing your thinking to focus on lead measures, and gathering data on those actions, can change your end results tremendously.  It is also very empowering to focus on actions that are in our control, and can help us create our own success!

Are you ready to discuss your upcoming project?