I hope you don’t mind I took a week off. I had the perfect storm with 72 hours in the ER and then a 40 hour course back to back. I haven’t had a day off in 2 weeks! Woe to me and first world problems, etc.
Now, if you’ll forgive me for missing a week, let’s talk about what I learned. This was a healthcare course, but a lot of the education was from the business world. We were asked to build a logic model about a project we had designed. In this model, we have to give the activities we would do and the outputs (among other things). The activities are the things that you do and the outputs are the immediate deliverables of the project. On mine, I wrote them as SMART goals.
Of course, we had to explain our choices to the group. I said, “These are right out of the business literature. The Activities are lead indicators and the Outputs are lag indicators!” And, no one knew what I was talking about.
Lead or Lag
Once you have your SMART goals decided, you can start to build out what you will do to reach them. Lead and lag are indicators, or metrics. These are things that you can measure. If they can’t be measured, like ‘happiness’, then they aren’t indicators and you can’t use them. If you can measure it, you can judge whether you are going in the right direction and I explained to the group how important this is.
If you are trying to physically look good as your goal, you might decide that to get there you have to look skinnier. I’m not saying everyone needs to do this, but you might make that choice. To get there, you might also suppose that you need to lose weight. In that case, you make a SMART goal to lose x pounds in y time. But, if you just did that, you would only be looking at the outcome without any activity to get you there. How do you lose weight? Just having the goal is not enough. You need to decide what to do to get there.
You might decide you want to eat strictly 1,500 calories a day. This is an activity that you do to help you reach the outcome. This is something you can do every day to keep on track. If you do it, you’ll achieve your goal.
Eating a certain number of calories is an example of a Lead Indicator. It is something you can monitor, which will get you to a desired outcome if you follow it. But, you won’t know if you reached your goal if you do not have something to measure. For that, you need a Lag Indicator. That’s like weighing yourself.
You can go deeper. You might say that you also need to exercise to reach your goal. Then exercising 5 days a week is a good lead indicator. Maybe you think that weight checking is not accurate enough. Then add on body size measurements.
In your real estate work a good example is the goal of owning 100 houses in 10 years. How would you reach that goal? Perhaps the lag indicator would be just that: the number of houses owned (having mortgages is OK). But you have no means to get there without some sort of activity. You might think, as many do, that buying one house per month would be a good one. The problem with this is that this is really a lag indicator. It doesn’t take into account what it takes to get the house purchased (and it might encourage you to purchase bad deals just to meet the goal). A better lead indicator would be to evaluate 10 deals a day.
Clearly it doesn’t have to be the indicators I’ve set here; you can create ones that work for you. A good goal needs to be measured. In your business you need both lead and lag indicators. Brainstorm them today.
