indicators
Leading or Lagging?
Interestingly, very few top performers whom we’ve worked with over the years spend much time looking at quotas or traditional sales funnel pictures as reported by sales-force automation packages. For example, most top performers view a quota as a lagging indicator: it can tell you whether you made your quota last period, not whether you will make your quota next period. Think of lagging indicators as great rearview mirrors: they aren’t very good at telling you what’s up ahead.
Top performers usually know well in advance if they will make their quota or not. Many develop and use personal tracking measures to better predict their results. These private tracking systems are more like a built-in navigation system than a rearview mirror. They let the user know what’s up ahead, where to turn, and how close they are to their destination. Think about the top performers you know or have worked with. Most of them probably have some kind of personal spreadsheet they use to track their deal flow. Those personal spreadsheets are based on their own set of leading indicators. Their spreadsheets document their tricks of the trade that unfortunately don’t fit neatly into sales systems or reports. But they are extremely useful and valid predictors of the timing and value of the business they will close.
One interesting aspect of leading vs. lagging indicators is when top performers choose to move something from their private list to the formal sales reporting mechanism. That choice is based on factors that are usually well understood by the top performers but not at all understood by average performers. But these factors are not mysteries; they can be uncovered and understood. When understood, they can be leveraged to close the gap between top and average performers.
Questions to consider
- Are you using mostly leading or mostly lagging indicators?
- What is your level of understanding about the leading indicators used by your top salespeople?
