Leading Organizations With Leading Measurements
Jerry Haney
Leading with Leading Measurements
Many organizational leaders have this tendency to depend more on lagging measurements in order to determine organizational progress or success such as sales results, EBT, stock price, etc. Though these measurements are crucial for any organization, they tend to read more like the sports page highlighting the scores from the weekends games. These results are primarily lagging measures and though they are good for reporting, they are not all that great for making sure that there is good news to report.
Since its inception in 1992, the Balanced Scorecard has managed to get many leaders to turn their focus away from lagging measures to landing measures for all levels of planning and forecasting, from strategic planning right on down to organizational measures as well as to the various workers in them.
Taking sales as a case study, it is far better to utilize leading measurements to set goals rather than using the various sales levels. For example, early on in my sales management career, I had headed a sales team of 10 individuals all the way to the top and getting the better of 800 Xerox sales teams in the process. I believe that our success was mainly due to setting goals and tracking the results of the copier selling process steps.
Basically, I ask each salesperson to commit to a number, any number but essentially their number to the specific process steps.
- Cold calls - Presentations - Demonstrations - Proposals - Closing calls
Every salesperson exceeded my expectations with regard to their number. The organizational culture of the sales team encouraged every salesperson to not only match up to their number but to exceed them by a huge margin. Each week, we would tally up the numbers, both the leading measurement results as well as the sales results [Lagging measure].
In the beginning, it was a bit scary, more reminiscent of a bunch of fish flopping on the deck with a lot of focused activity than any sales. Orders started to trickle in after a month but in the ensuing period it soon became a torrent of sales. By the years end, we were well ahead of the target that we became the numero uno amongst all the 10 teams in our branch as well as the other 70 teams in our region. By the January of next year, we were the top team in the country out of 800 other teams.
Setting sales process measures to track and report is quite easy. Some organizations may find this a bit challenging but with the teams taking the time necessary to find key leading measures and with commitment by every one to these measures, the results should be equally great. Every organization can experience its version of what we experienced during those early years at Xerox.
This story should make it clear how easy it is to focus on the wrong results. Organizational leaders who focus on leading measurements build high performance workplace cultures, leading to great Monday mornings, basking in the glow of lagging measures as a result of their organizations leading measures.
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