A key part of the Navel Model is step number 7, Measurements. I have long been a believer that sales, profits, and other measurements that end up on an income statement are too broad and difficult to control. It is more important to identify what I have often called triggers, or the smaller measurements that influence future performance.
It wasn’t until I attended a seminar about a new book and framework from Franklin Covey called The 4 Disciplines of Execution that I stumbled across two terms that explain this concept succinctly. Authors Chris McChesney, Sean Covey, and Jim Huling call these Lag Measures and Lead Measures. A Lag Measures measures the ultimate goal you are trying to accomplish, such as an increase in sales or profits, however, it is always in the past… hence the term Lag. Make no mistake, Lag Measures are critically important, but once you see a Lag Measure, there is nothing more that can be done about it. For instance, once you see the weekly sales report, it is just that… last week’s sales. You can try to do better next week, but nothing can be done about last week.
Lead Measures, on the other hand, are both predictive, meaning they lead to the accomplishment of the Lag Measure or goal, and they are influenceable, meaning you can do something about them. Lead Measures are about narrowing your focus down to the 2 or 3 things that “trigger” success, or your end goal. For example, it could be number of out-of-stock items in a retail store, number of subscribers to an eNewsletter for an eCommerce website, or compliance to 8 key safety standards for a construction company.
The last key to creating an organization worth talking about is to identify 2-3 Lead Measures, or triggers, and measure them religiously. Only then can you drive true results.