October 12, 2023
Leading vs Lagging Indicators
Have you ever wanted to be twenty pounds lighter?
Or land a dream client like Starbucks?
Or have a million dollars in the bank?
Being twenty pounds lighter is what I’d refer to as a “lagging indicator” - i.e., an indication that you have been doing something right.
Lagging indicators are results or output-oriented. Typically, you can’t just snap your fingers and make a lagging indicator happen.
So how do you end up with a lagging indicator that you desire? That’s where “leading indicators” come in.
A leading indicator is something that you can observe and measure in time increments that are much more frequent and regular than the lagging indicator.
For example, a leading indicator for losing twenty pounds might be consistently jogging three miles every day.
Or a leading indicator for landing a dream client like Starbucks might be consistently connecting with a new Starbucks executive every week.
Or a leading indicator for having a million dollars in the bank might be consistently saving $1000 every month.
Okay, so what does this have to do with anything?
When you’re having The Why Conversation with a prospective client, you want to uncover a lagging indicator of success.
Their desired business outcome.
That’s what you’ll base a value price on.
But you don’t want to stop at uncovering the lagging indicator.
You also want to uncover a leading indicator you believe you can influence and measure while the project progresses.
A personal trainer can’t magically make you twenty pounds lighter, but he or she can probably get you to run three miles a day most days.
A sales consultant can’t magically land a dream client like Starbucks for you, but he or she can probably get you to connect with a new Starbucks executive every week.
A financial planner can’t magically make you have a million dollars in the bank, but he or she can probably get you to save $1000 a month most months.
Here’s the thing...
You almost certainly can’t magically deliver your client’s desired business outcome, but you probably can do something in collaboration with them every day or week or month that they believe is likely to get them there.
Yours,
—J