Lead indicators enable the management to proactively measure, adjust, and improve business performance, drive changes, or enable organizational growth.
There are leading indicators and lagging indicators for innovation management; Lead measure as the bet you make helps to assess value beyond finance numbers. The metrics management is a critical component of innovation management.
Loyalty is a leading indicator that will direct all key performance indicators as one direction: Forward-looking organizations strive to become people-centric. The management needs to ponder what investments they can make leading to customer satisfaction; whether an investment directly focused on improving customer satisfaction, leading to better profitability. Customer loyalty is a lead indicator that enables an organization to identify and prioritize improvements to attract customers that can be profitable, and for whom delivering value to.
When thinking of innovation, one often thinks of large-scale innovation which is important, but incremental innovation such as digitizing the touch point of customer experience is critical to improve customer loyalty. Loyal customers are required to help achieve business objectives like increasing revenue by growing the customer base, and increasing purchasing amount per customer. It can also include an objective and a metric related to customer loyalty because it reminds the organization that building customer loyalty is a strategic goal of innovation. The real innovation needs to occur in those very moments to delight customers. The level of increased customer satisfaction would be also based on both the industry and wherein the enterprise the innovation is occurring.
Learning is a lead indicator: Improvement cannot be made without continuous learning. Employee engagement and continuous learning is important to drive competitive advantage of the company. Well trained and happy staff are needed to make continuous improvement and unleash business potential. Thus, learning is a lead indicator that needs to be “SMART” - they are the relevant metrics that can be quantified and validated. People can see what the outcome will look like throughout their learning journey. Adapting learning and continuous improvement culture involves gathering data, analysis, defining areas to be improved, and a measurement scale for the improvement.
To engage, you have to communicate to each other. Even better if all parties can speak the language of business. There should be a consideration for learning indicators or a balanced scorecard that measures the progress of the milestones you want to achieve during the learning scenario, and keeps people focused. The goal of learning is for change and innovation. If measured effectively, the performance measurement will demonstrate higher levels of employee engagement, nurture trust, or inspire peace through the members of your organization to catalyze innovation. There is an ever greater ability to create engagement around very specific goals, such as employee retention, talent acquisition, benefits administration, wellness, or multi-generational workforce facilitation.
There are a variety of processes that need to be fine-tuned to improve organizational agility and maturity. Process management effectiveness and efficiency achieved through automation, standardization and optimization directly impact business performance and management success. Procurement, production, logistics, marketing and sales processes need to work to produce the product or service at a customer-value proposition selected by the organization. Process measures are therefore considered lead indicators of customer satisfaction.
Lead indicators enable the management to proactively measure, adjust, and improve business performance, drive changes, or enable organizational growth. The challenge for performance measurement or key performance indicator selection is that they sometimes need a number of measures around the same issue to gain a complete picture. The more meaningful the thing you want to assess, the harder it is to be measured objectively. Select the right set of indicators of improvement, innovation, investment, and measure them effectively.
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