What Really Moves the Balance Sheet?

The default mode of most teams I've been a part of is to track essentially what's on the balance sheet as the primary measure of success.

Outside of that, we've mostly been "flying blind" on anything else that might be a leading indicator.

The problem is the balance sheet and that quarter's bookings tell you a story about how you were doing 6+ months ago for the most part.

Luckily, I've also worked in situations where we had solid, stable metrics we felt confident were leading indicators.

If you've ever worked in a situation like that, it's really hard to go back to what feels like guessing in the dark.

I've experienced a lot of resistance to identifying and doing to work to define and measure leading indicators. I don't have a compelling theory as to why.

The good news is you don't have to boil the ocean and instrument everything. You probably shouldn't or you'll get redirected.

Find a way to get small agreement on a metric or three that you can measure without huge amounts of work. Track them over time yourself.

What happens after a few months? How does it correlate with top line or margin? What about after 6 or 12?

Get small insights and compound them over time. Share with a bigger audience when your confidence is high and momentum can build from there.