How to predict future revenue using lead and lag measures

Executive overview

Revenue is a lag measure — it records what already happened and cannot be changed. To predict and influence future revenue, track lead measures: the upstream activities that drive it.

When lead measures drop, you can act immediately. Without them, you only see falling revenue and must guess why.

Track lead measures daily and you can predict and shape future revenue.

Lead measures vs lag measures

• Lag measures record outcomes after the fact — revenue, weight, relationship quality
• You cannot affect a lag measure once it is set
• Lead measures are the inputs that predict future lag outcomes
• Sales calls made, doors knocked, emails sent, new email addresses captured — all lead measures
• Tracking both lets you diagnose problems before they appear in revenue

Using lead measures in practice

• Build a dashboard with both lead and lag measures
• When lead measures fall, go to the responsible team immediately and solve the root problem
• When lead measures spike, ask what worked and try to duplicate it
• Without lead measures, you waste time guessing why revenue is down
• Define your lead measures first, then get daily data on each one