Stop focusing on lagging indicators!

I was supporting a technology company that was going through tremendous growth and change. They had ripped apart and restructured their entire business and they were working very hard on integrating the new pieces.

Even though they were going through all this change they were given no relief from achieving their bold sales numbers. What made things worse is that they had fallen short in their few previous quarters. Needless to say, the pressure and stress were very high. Everyone was focused on achieving the next quarter’s results.

But, a growing number of leaders were becoming frustrated. They felt that the short-term focus was part of the problem. They believed that the team’s single focus on the next thirty-day and ninety-day results was perpetuating the short-term challenges and problems that were causing the continuous shortfalls. The short-term focus was preventing the team from coming up with longer-term strategies that may not help in the near future but would lay the foundation for elevating the team out of its predicament in the longer run.

It was hard for this team to change its mindset.  Many leaders felt that if the team doesn’t make its short-term results the company won’t have a longer-term future.

Have you ever been in a situation like this? Where your existing results were in jeopardy and even though you knew that reacting to the poor results in the short term would be a mistake you couldn’t help but do so.

I see this dynamic in organizations all the time.

Many leaders don’t seem to understand that their business results are lagging indicators, therefore focusing on them, or reacting to them is the wrong thing to do.

You don’t want to focus on the lagging indicator. You want to focus on their source.

Context is the source of results.  In organizations context manifests through the culture of the organization: how people at all levels, functions and locations behave and act, what people consider possible and impossible, achievable and unachievable, and the degree to which people feel that they matter, they can make a difference and they can affect and change things.

Leaders who understand this know that they have to focus on and nurture their people’s ownership, commitment, empowerment and motivation. Everything else falls out of that.

If your people are frustrated, they feel like the company is not doing the right things and they can’t speak up or influence and change that, they’ll leave or worse – they will stay as skeptical, cynical and resigned team members. You can be sure that if this happens the results will start stalling or declining – it’s not a matter of if, only when.

But, if your people feel genuinely excited and committed; that they matter and they can make a difference, they will own the objectives and they will go the extra mile to reach them. And, if the results are declining, they will work together in a very transparent and candid way to get to the source of the issues and turn things around.

Your people’s level of excitement, commitment and ownership, as well as their clarity of destination and sense of empowerment to make the difference in achieving it, is your leading indicator of success.

Strong results will dry up when the context is weak. On the other hand, a strong context will overcome any bad results! And, don’t get confused about the benchmark: you could be better than your competitors, even the best in your industry and still be much less than you could be.

If you and your team are clear about who you are, what you stand for, what you are committed to, and you have a plan, and then you and your team act and behave consistently with your commitments, values and plan, it is only a matter of when, not if you will achieve what you want.

The universe three tests rule – a Fable:

A team of professionals who were successful for many years in their craft decided to take their game to a new level. They took on a bold stand and aligned on a set of audacious objectives to leap themselves beyond anything they have ever done or achieved before.

The universe listened to their declaration and said skeptically: “I have heard so many empty declarations. What is different with this team?”

To check them out, the universe threw at them a few small obstacles and challenges to make their new endeavor more challenging.

The professionals remained calm and collected, they stayed the course, overcame these small curveballs and moved on.

The universe took notice, but it wasn’t overly impressed. “Beginner’s luck,” it said as it released a bigger wave of issues and problems for the professionals to deal with.

These bigger obstacles definitely raffled the professional’s feathers. They scrambled and struggled to overcome the problems. Their partnership and trust were strained. However, eventually, they figured it out and continued forward with commitment and resolve.

“OK, you have my attention!” the universe stated. “Now let’s see if you are truly for real.” The universe unleashed issues, challenges, problems and unfavorable circumstances bigger than the first two times combined.

The team scrambled and struggled. Their performance and results declined, some of their people gave up and left, and their own partnership, trust and belief in the future were significantly strained. But, at the end they endured, they figured it out and continued forward with commitment and resolve.

The universe, who was taking notice the whole time finally exclaimed: “Yes! You are for real!” and then everything began to change. Instead of issues, problems and obstacles, the universe started sending favorable incidents, meetings, material assistant and circumstances that the team couldn’t have anticipated would come their way. As a result, they started to gain momentum towards their desired change and eventually achieved it.

The End!

Most teams give up too quickly!

Their first mistake – they focus on the results, which are lagging indicators.

Their second mistake – they don’t focus on nurturing people’s commitment, ownership and empowerment, which are leading indicators.

Their third mistake – they don’t stay the course for long enough to pass the universe three tests and get to the other side, where they could reap the rewards.

Gershon Mader

Founder and President of Quantum Performance Inc., a management consulting firm specializing in generating total alignment and engagement in organizations.

His work has encompassed a broad range of industries including banking, telecommunications, manufacturing, entertainment, real estate, retail, startups and non-profits.