Prepare your business for success this financial yearBY Australian Retailers Association
The end of the financial year brings with it the thrills of counting the beans of your business wins or the condolences of tallying up losses. It is a perfect time to take stock of your current position and how you got here. Revise the goals you have set in your business for improved performance and better results.
This end of financial year reflection opens the perfect opportunity to assess the function of lead goals and lag goals in your business. When you’re setting KPIs you need to understand the type of goals that will be most helpful for creating accountability.
Ultimately, your goals will be successful only when their achievement grows your business and establishes freedom. Often measurements are set around lag goals which are not always helpful.
Lag goals are usually results-oriented, meaning their achievement comes directly from your organisation’s activity. Lag goals are easy to measure but not as easy to improve or influence.
These goals target outcomes such as the number of sales made or the amount of revenue produced. While tracking them has value, they’re not always the most productive areas to set KPIs around because they are by definition the type of goals that lag behind the activity being done. They can only be attained as a result of your routine business activity.
Lag goals are important to measure because results are important to achieve. But if you want to control the activity leading these results you need to set KPIs around lead goals. Lead goals measure what is actually being done in the here and now.
They are easier to influence or improve because they deal with immediate progress and show the likelihood that you will reach your aims.
Lead goals track activities such as the number of sales calls being made to result in the sales.They count the number of customer interactions that you’re having which will result in revenue.
They tally how many ads being presented on a daily, weekly or monthly basis to achieve the social media reach that you might be looking for.
To put it simply, the difference between lead goals and lag goals is the difference between counting the number of workouts you do and counting the number of kilos you lose. The workouts are directly within your control, while the weight loss is something you cross your fingers for in hope.
When you’re setting your business goals this financial year, be clear on the difference between lead goals (which are your daily and weekly routine activities) and lag goals (the results or the output of that activity).
For more information about setting productive goals in your business, order your copy of Freedom Machine by Kerry Anne Nelson at Operation Verve or visit www.operationverve.com
ABOUT THE AUTHOR
Australian Retailers Association
Founded in 1903, the Australian Retailers Association (ARA) is Australia’s largest retail association representing Australia’s $310 billion sector, which employs more than 1.2 million people. As the retail industry’s peak representative body, the ARA works to ensure retail success by informing, protecting, advocating, educating and saving money for its 7,500 independent and national retail members throughout Australia. For more information, visit www.retail.org.au or call 1300 368 041.