4 Step Process to Determine Leading Indicator KPIs

There’s no magic formula or standard set of Leading Indicators that works for every company. Leading Indicator KPIs only become powerful when you find that right lever to pull that impacts the results that are most important to your business. While we can’t tell you which leading indicators are most important in your business, I do have a proven process for determining the ones that will work for you:

Step 1: Be clear about the business problem you are trying to solve, or the opportunity you are trying to maximize.

Step 2: Clarify the desired result, and make it SMART by setting success criteria on this result KPI. 

Step 3: Dig deeper with questions to determine how you get the results you want. Most people don’t ask enough questions to get to a meaningful underlying Leading Indicator.

Step 4: Drive results by setting clear success criteria and putting your Leading and Results Indicators on a dashboard to status every week.

It is really important you ask the right questions about what you want to achieve with your leading indicator.  There are basically three questions:

1. What is this about?  What is the component, system or outcome you are interested in?
2. What is lag event you are interested in predicting (and what is the lag indicator of that event)?
3. What aspect of potential performance are you interested in measuring?  What leading aspect are you trying to measure?

In summary, what sort of decision, about what, do you want to understand and predict?

If you do not know why you are trying to introduce a leading indicator and what decisions you are going to use it to inform, then you are wasting your own and everyone else’s time.  You will just add to the large volume of indicators out there.

When it comes to KPIs, less is more. Don’t overwhelm yourself by tracking more than you really need. For each goal that you set, you should only set a few KPIs, each of which should be directly correlated with that goal.

Determining the right leading indicators can ensure your lagging indicators meet your desired results.

Leading and Lagging Indicators Work Best In Tandem

In performance management we often talk about “lagging” and “leading” indicators. But what do they mean exactly?

Lagging indicators are typically “output” oriented, easy to measure but hard to improve or influence. A lagging indicator is one that usually follows an event. The importance of a lagging indicator is its ability to confirm that a pattern is occurring.

Leading indicators are typically input oriented, hard to measure and easy to influence. These indicators are easier to influence but hard(er) to measure. I say harder because you have to put processes and tools in place in order to measure them.

Let me illustrate this with a simple example: For many of us a personal goal is weight loss. A clear lagging indicator that is easy to measure. You step on a scale and you have your answer. But how do you actually reach your goal? For weight loss there are 2 “leading” indicators: 1. Calories taken in and 2. Calories burned. These 2 indicators are easy to influence but very hard to measure. When you order lunch in a restaurant the amount of calories is not listed on the menu. And if you are me, you have no clue how many calories you burn on a given day.

Now lets try to translate this to business. Most financial indicators such as revenue, profit, costs are “lagging indicators”. They are results of the activities of the company. Past company efforts influence your lagging indicators.

Lagging indicators serve as a starting point on the road to improvement. If a lagging indicator shows negative results, it’s too late to correct the damage that has been done. But it’s not too late to correct any future damage that might occur.

Leading indicators in business are used to gain a sense of the direction a business is headed. Company leaders use them to adjust their strategy to create positive future business conditions. Good leading indicators should help you forecast whether or not you will reach company goals. Valuable leading indicators should help you address company challenges. That way you can realign your actions and strategies to make your company successful.

Managers really need to understand the difference between the two and ensure they have both types of metrics in place if they’re to build an accurate understanding of performance.

Lagging and leading indicators both have an integral place in your organization’s metrics. Lagging indicators show the health of the organization, and are important signals to investors, stakeholders and the like as to how the organization is performing.

Leading indicators show how well the key processes and essential customer appreciation points are performing, and therefore are good predictors of whether or not you are going to meet the performance goals of the organization as a whole, i.e., whether or not your lagging indicators will continue to look favorable.

Leading indicators benefit companies in a variety of ways by:

• Creating visibility of the efforts and activities which impact the future
• Helping leaders know where to improve performance
• Setting individual and team performance expectations
• Holding employees accountable for their responsibilities
• Helping to maintain consistent execution of high-impact efforts

The bottom line is if you’re using lagging indicators without leading indicators, you’re only getting half of the KPI picture. Lagging indicators are an important resource for creating leading indicators that can launch your business into growth mode, but they aren’t the entire package. These sets of metrics work best in tandem to produce the most accurate and achievable KPIs.

Lean Quote: A Leader is a Dealer in Hope

On Fridays I will post a Lean related Quote. Throughout our lifetimes many people touch our lives and leave us with words of wisdom. These can both be a source of new learning and also a point to pause and reflect upon lessons we have learned. Within Lean active learning is an important aspect on this journey because without learning we can not improve.

"A leader is a dealer in hope."   — Napoleon Bonaparte

Leaders must guide, motivate, and inspire. Guide your team in the direction you want the group to go by setting a vision, strategy, and goals. Motivate them to bring their best by expressing your passion, communicating with confidence and optimism, and connecting tasks to a greater purpose.  Your work doesn’t stop there; inspire them to act by continuously engaging their talents, re-recruiting their spirit, and celebrating successes.

Always maintain a positive attitude. Positive attitudes have power in more ways than one. As a business leader, you should exude optimism which will help your staff avoid patterns of negativity. When the economic climate is unstable, businesses will face continual challenges. If you are not optimistic about your ways of conducting business, it can negatively affect the mindset and productivity of those who work for you.

The attitude of the leader has a huge impact on the culture, environment, and mood of the department or organization. The leader’s attitude tends to spread and affect others dramatically. A good leader has the attitude of serving his employees at all times, often at the expense of his own morale or personal needs. A good leader truly cares about the morale of the team, pushes and motivates his team with respect, a relentlessly positive attitude and with a genuine heart.

Lean leaders are optimists and believe the cup is always half full. They aren’t pie-in-the-sky types, but they see the positive side of an opportunity, and they believe in their ability to achieve their goals. Leaders provide inspirational motivation to encourage their followers to get into action.

Be a Great Mentee: 10 Tips

Throughout my 20+ year career, I have mentored and been mentored by many people. Each relationship has brought new ideas and experiences into my life, and taught me lessons that I’ve taken with me during my whole career.

When dealing with a mentorship, there are a few things that need to be taken into consideration. A good mentor is constantly aware of and improving their skills, so you must learn to continuously progress as a mentee. If you and your mentor fit together symbiotically, the mentorship will blossom into a valuable relationship.

Preparing yourself for you time with your mentor can help ensure that you have a happy and helpful mentorship together.

Here are the top 10 tips for being a good mentee.

1. Be an active listener with questions and body language that shows openness to what your mentor is saying.

2. Trustworthiness.

3. The ability to speak (with humility) when there are differences.

4. Respect for the time given by being prepared for your meetings.

5. Humility goes a long way - even if you already know what your mentor is saying, listen politely and follow up by asking about their personal experiences relating to that advice. You might get a perspective you hadn’t considered before.

6. Be ready to work! Be a mentee that follows through with tasks and assignments.

7. Be willing to take risks Your mentor may ask you to do something outside your comfort zone. Be open to it!

8. Be a great introduction Treat any introduction into your mentor’s network with the utmost respect - remember that you have been given access into a network you didn’t earn on your own accord.

9. Feedback loop Let your mentor know the status of the situations you’ve discussed; especially in situations they have given advice on or introduced you into.

10. Reciprocate! Giving thanks is a wonderful way to reciprocate, but also look for ways to give back in terms of a timely article, an introduction that would benefit them, or an offer to help where you can.

Mentorship is an important relationship from both sides. Yes, the mentor has to put a lot into it—but it’s also up to the mentee to be thoughtful about what they put into it and what they want to get out of it. By being a great mentee, you’ll not only advance your career, you’ll learn the lessons you need to be a great mentor in the future, too.

Lean Quote: Attitude More Than Anything Else Will Determine Success

On Fridays I will post a Lean related Quote. Throughout our lifetimes many people touch our lives and leave us with words of wisdom. These can both be a source of new learning and also a point to pause and reflect upon lessons we have learned. Within Lean active learning is an important aspect on this journey because without learning we can not improve.

"It is our attitude at the beginning of a difficult undertaking which, more than anything else, will determine its successful outcome."   — William James

Managers can and should influence an employee's attitude.  If someone has a negative attitude or is convinced an opposing idea is better than yours use these nine principles to change people's attitudes without giving offense or arousing resentment:

1. Begin with Praise and Honest Appreciation.  Begin by finding a common point on which both can agree, something the other person has done well and for which specific praise can be given.
2. Call Attention to People's Mistakes Indirectly.  This is the difference between saying "You're dumb!" and "What you did was dumb and I know you're better than that!"
3. Talk about your Own Mistakes before Criticizing Others.  A mature manager will probably admit that he or she has made the same mistakes that others make.  Sharing this fact before delving into the other person's error will cement the relationship and pave the way for constructive action.
4. Ask Questions instead of Giving Direct Orders.  This is a powerful principle to develop creative thinking on the part of subordinates.
5. Let the Other Person Save Face.  A "cornered" animal will fight back; so will we.  Give a person an opportunity to save his or here self-image.
6. Praise the Slightest Improvement and Praise Every Improvement.  When a person is doing something new, he or she needs immediate feedback and feeling of accomplishment.
7. Give a Person a Fine Reputation to Live Up To.  The most important "reputation" a person can live up to is the manager's high opinion of that person.  If they sense you turst and respect them, they will work very hard to earn that trust and respect.
8. Use Encouragement.  Make the Fault Seem Easy to Correct.  Wether an employee changes his or here attitude or behavior will depend largely on their conception of the difficulty of changing.  You can help them by using this principle.
9. Make the Other Person Happy about Doing the Thing You Suggest.  This is accomplished by sharing the benefit to the other person that will be the  result of doing the thing you suggest.

9 People Management Tips That Will Make You a Better Manager

People management is an art that needs to be understood by everybody especially CEOs and managers and people in leadership or position of authority. It is centered on developing and organizing people to achieve a goal. But much more, to be happy to do what they are doing rather than appearing to be forced into doing it. There are a number of people management tips that are helpful. They include:

1.     Good communication skill

Communication is undoubtedly an important part of people’s management. Your communication skill is your ability to pass a message in simple, clear terms and be understood by all your recipients. It also involves your ability to persuade people, get along with them, and make them listen to the ideas you’re passing across. 

As a manager, you would need to be in constant communication with the people you work with and you definitely would not have the luxury of time to talk for so long. So, being able to communicate effectively and concisely is important.

2.     Listening skill

As a leader, the ability to listen is something you must do maximally. As a matter of fact, you should do more listening than talking. It is important that you take your time to listen to your employees. It helps you to know what they think and how they feel. It also makes you approachable and easier to trust. Listening to your employees also gives you an idea of how satisfied they really are, what their pain points are and what to improve to help you work better.

3.     Empathy

Empathy is a person’s ability to share in and understand the feelings of others. It basically is showing other people’s compassion. We all go through rough times in our lives and it is important as a boss to be able to empathize with their situation and cut them some slack. This does not mean you are permitting them to lose their productivity, but it just means you treat them a little differently and maybe especially. It might mean accommodating their excesses and helping them through that period. As a manager, you want to make life easier for all your employees.

4.       Good judgment

Every manager with a good judgment has a fundamental understanding of what is going on around them. They also listen to the people around them, they learn from the information that they get around them and use it accordingly to make the right judgment. Every good judgment requires getting information with your sensory signal usually called the ‘gut feeling’. There is a time when you get a gut feeling about something but you really cannot explain it. Making your decision based on that feeling is right most of the time.

5.     Be open-minded

Having an open mind is simply based on an understanding of the fact that you know as a leader, you really might not have the solutions to all the problems. It could also be you know that your way or your idea might not be the best solution to the situation on the ground. So you are open to ideas and suggestions from the people that work with you. This fosters inclusiveness at your work and makes your employees feel valued because you are willing to take their suggestions in and use it if it is the best available for the situation at hand.  This creates respect and trust within your team and a willingness to participate.

6.     Patience

Patience is one skill that you definitely need in your daily interaction with people, not to mention your employees, people that you need to be productive for the growth of your business. This skill is something you might think you really have until things really go sideways. However, it is someone you definitely must develop as a leader. Not all of the people you manage will work at their best at all times. You have to be patient with them and not always lose your temper on them. Irrespective of what the situation is, you should always try to keep a level head.

7.     Approachability

Every manager will at some point need to help their employees deal with certain situations, solve some problems or give guidance. It is important as a leader that you are approachable. Being approachable means that people can easily walk up to you to talk to you about anything without being scared of what your reaction will be. You have to build your relationship with your employees or people under you to the point that they trust you and are able to approach you and talk to you about anything. Even things about their private lives, beyond just daily work sometimes.

8.     Honesty and accountability

These are two individual traits but they seem to work together. When you head a team, you must ensure that you are open and honest with them. This attracts a similar reaction from them. Accountability is just about the same thing. It means you are responsible for your work and for the people around you. This trait also attracts a similar reaction. As a leader and manager, you are a role model, an example for your employees and people around you to follow. They see what you do. So it is in you and your organization’s interest to be honest and accountable with your team members.

9.     Positivity

If you want to succeed in whatever you’re doing, you need to be positive about it. Positivity reflects in everything that you do. It is also a driving force for you to achieve your goal, (while too much of) negativity drags you backward. One thing about positivity is that it is contagious, and so is negativity though, so, if you want to see your employees or team members being positive about what they are doing, you should show that positivity first. When the people you lead see that you have a positive mindset towards what you are doing and you are very optimistic, they adopt the same approach to work, both consciously and unconsciously. 

Conclusion

Being a manager is about getting people to work together to achieve a goal. It means you are the team leader and you have to lead yourself first to lead others effectively. Raise the bar, set the standards high for yourself, do not settle for anything less than the best, and watch your followers do well. 

About the Author:

Becky Holton is a journalist and a blogger at best essay writing service uk. She is interested in education technologies, boom essays review, top resume reviews and is always ready to support informative speaking at best essay services. Follow her on Twitter.

Lean Tips Edition #150 (#2461-#2475)

For my Facebook fans you already know about this great feature. But for those of you that are not connected to A Lean Journey on Facebook or Twitter I post daily a feature I call Lean Tips.  It is meant to be advice, things I learned from experience, and some knowledge tidbits about Lean to help you along your journey.  Another great reason to like A Lean Journey on Facebook.

Click this link for A Lean Journey's Facebook Page Notes Feed.

Here is the next addition of tips from the Facebook page:

Lean Tip #2461 – Leaders Can Encourage Change
Leaders can do a lot to promote change so that it sticks. It’s useful if a CEO backs something new, but it’s not sufficient to support a sustainable culture shift. The biggest predictor of how employees behave is how their direct boss acts. So if you’re a manager, lead by example. And communicate clearly about changes and experiments, including following up with your employees and admitting mistakes. Start small and build changing products might be too big a jump at first, but changing processes (shortening meetings, for example) can happen faster.

If you’re someone whose employees bring suggestions to you, Alvarez suggests that you avoid being a seagull manager who swoops and poops on ideas. If a manager does that to you, neutrally respond to the quick criticism by clearly presenting the problem you were trying to solve. You could also ask for specific feedback about why your idea isn’t resonating.

Lean Tip #2462 – Ask Questions-And Listen To The Answers
When trying to make lasting changes in an organization, it’s natural to want to skip to solutions before focusing on the problem. But your first step should be talking to people about what they need. Alvarez suggests asking, What would you be able to do if things were different?

Most often, Alvarez says, you’ll hear from an employee, You need to build this. Your response to that answer should be, OK, but why? What would that allow you to do? If their answer is just, Well, it would be nice to have, then don’t build it. But if they’re saying, I want X because I can’t do Y, then a good, worthwhile solution might exist, unless Y is something very obscure.

This method of investigating your employees stumbling blocks involves a lot of repetition. Train people to ask why when they hear someone say, I want this. The answer could identify the problem, which needs to be fully understood before attempting a fix.

Lean Tip #2463 – Identify and Accept Risk
Fear can be a powerful deterrent it can hold your company back and cause dysfunction. When someone says, We can’t do that because bad things will happen, responding with: What bad things will happen? What’s the worst-case scenario? People shy away from this type of thinking but it’s really quite freeing. Often, the potential fallout (e.g., Customers will get mad?) isn’t actually a consequence. Decide beforehand and without fear on an acceptable level of risk for your organization.

Also, when conducting experiments, ask the people above you: How much can I spend without you coming in? Managers don’t want to be approving a lot, so most will respond with something like, Use your judgment and tell me the results. Pushing boundaries slowly works well.

Case studies are also important factors in getting manager buy-in. Because everyone’s afraid of screwing up, being able to point to similar scenarios that ended up successful can help. But case studies should be deployed with caution make sure the ones you’re using are appropriate and relevant.

Lean Tip #2464 – Communicate to "We" vs. "They"
All too often a message about change is delivered in a way that leaves people with a lot of reasons why they must change or how they need to change. Remember that when someone isn't the one choosing the change in the first place, resistance is a natural and predictable response.

As in any new endeavor, communication is key, so you must be mindful of your messaging. Anything you say that will be heard as "Why you should or must change" will only fuel the resistance.

Instead, when leading change, focus on making the case for why change will make a difference for us, and what it makes possible for everyone's future if we change together. If you really want to send the message that you're serious, try sharing about how or what you can already see you will need to change.

Lean Tip #2465 – Show, Don't Tell
Leading change requires that you show people rather than just tell them about it.

Show them how the path you're proposing can serve what matters to them.

Show them you're committed to change by making changes yourself.

Show those who aren't enrolled by empowering those who own the change with you to create short term wins that demonstrate the importance and power of the change you stand for, to create a better future.


Lean Tip #2466 – Productivity Tip – Use the 80/20 Rule to Focus Your Time on the Most Impactful Tasks
A good way to prioritize tasks comes from the 80/20 principle.
Discovered by Italian economist Vilfredo Pareto, the 80/20 rule (also called the Pareto Principle) states that in any pursuit 80 percent of the results will come from 20 percent of the efforts.

To maximize efficiency, highly productive people identify the most important 20 percent of their work. Then, they look at ways to cut down the other 80 percent of their schedule, to find more time for the things that make the biggest impact.

Lean Tip #2467 – Productivity Tip – Beak Down Tasks into a Single Next Step.
Why do you procrastinate?

There are a variety of reasons that people procrastinate, but one of the most important is that the tasks on their to-do list just seem too daunting.

If you have to-do list items that are large in scope and not very specific, tackling those tasks becomes challenging. You look at the item and think “I don’t even know where to start.”

You can start by breaking large to-dos into smaller to-dos.

Lean Tip #2468 – Productivity Tip - Make a Reasonable To-Do List.
Don’t overwhelm yourself. To-do lists often fail because we make them way too complex or the tasks are unequal. Some tasks will take a long time, others won’t take any time at all. This creates an unbalance in the way we distribute our time. What happens then is that our to-do list then becomes a procrastination tool. Yes, that’s right. Because then we do the easy stuff, and then become really distracted on the hard stuff.

Lean Tip #2469 – Productivity Tip - Set Specific Times to Check Email
It’s easy to waste time shuffling through dozens of emails.

All it takes is one email notification and, before you know it, you’ve wasted 20-30 minutes organizing and responding to multiple emails.

What you should do is choose two times a day to do emails. I recommend once before lunch and once more before finishing up your workday, that way it doesn’t accidentally seep into your work time.

Lean Tip #2470 – Productivity Tip - Use the Important / Urgent Matrix for Your Decisions
Do you often find yourself working tons only to find you didn’t get any “real” work done?

Then you should give this tip a try.

Separate your tasks into one of four categories:

• Important & urgent (e.g. presentation due tomorrow)
• Important & not urgent (e.g. exercise, working on a presentation two-weeks in advance)
• Not important & urgent (e.g. social media updates, phone calls)
• Not important & not urgent (e.g. surfing the web)
Important tasks are ones that contribute to your immediate livelihood & long-term goals, while urgent tasks are ones that require immediate action or have incoming deadlines.


The idea is to focus on tasks in category #2 (important & not urgent), because by doing so you:

• Contribute to your immediate and long-term success
• Prevent yourself from dipping into category #1 (important AND urgent tasks)

Doing this will keep you focused on only the most important tasks. It also minimizes the chances of your tasks going “critical,” preventing burnout by trying to catch up on an important task.

Lean Tip #2471 – Leaders Encourage Creativity
Intellectual stimulation is one of the leadership qualities that define transformational leadership. Followers need to be encouraged to express their creativity. Effective leaders should offer new challenges with ample support to achieve these goals.1

One way to foster creativity is to offer challenges to group members, making sure that the goals are within the grasp of their abilities. The purpose of this type of exercise is to get people to stretch their limits but not become discouraged by barriers to success.

Lean Tip #2472 – Leaders are Role Models
Idealized influence is another of the four key components of transformational leadership. Transformational leaders exemplify the behaviors and characteristics that they encourage in their followers. They walk the walk and talk the talk. As a result, group members admire these leaders and work to emulate these behaviors.

Research suggests that leaders are able to foster a specific belief and then transmit that inspiration to their followers. As a result, followers are optimistic and have high standards for performance and achievement.

Lean Tip #2473 – Leaders Listen and Communicate Effectively
Another important quality of transformational leadership involves a focus on providing one-on-one communication with group members. Transformational leadership is effective when leaders are able to communicate their vision to followers, who then feel inspired and motivated by this vision.

By keeping the lines of communication open, these leaders can ensure that group members feel able to make contributions and receive recognition for their achievements.

Lean Tip #2474 – Leaders Have a Positive Attitude
Transformational leaders have an upbeat, optimistic attitude that serves as a source of inspiration for followers. If leaders seem discouraged or apathetic, members of the group are likely to also become uninspired.

Even when things look bleak and your followers start to feel disheartened, try to stay positive. This does not mean viewing things through rose-colo
red glasses. It simply means maintaining a sense of optimism and hope in the face of challenges.

Lean Tip #2475 – Leaders are Passionate
Would you look to someone for guidance and leadership if they did not truly care about the goals of the group? Of course not! Great leaders are not just focused on getting group members to finish tasks; they have a genuine passion and enthusiasm for the projects they work on.

You can develop this leadership quality by thinking of different ways that you can express your zeal. Let people know that you care about their progress. When one person shares something with the rest of the group, be sure to tell them how much you appreciate such contributions.