Positioning for Professionals: How Professional Knowledge Firms Can Differentiate Their Way to Success

Appendix C. Indicators of the Firm's Success

Do you know what predicts your firm's success? Most success metrics measure only what has happened, using what could be called "lagging indicators." But imagine the effectiveness of your brand development efforts if you could identify the "leading indicators" for your firm: the activities, customer behaviors, and measurements that actually lead to revenues and profits.

Instead of just looking in the rear view mirror at historical measurements like revenues, leading indicators look ahead; they're focused on the actual precursors of business success. Most leading indicators never appear on a financial statement, but they can—and should—be identified and tracked.

Leading Indicators	Lagging Indicators
Predictive	Diagnostic
Forward-looking	Backward-looking
Attitudinal and behavioral	Transactional
A measurement tied to a hypothesis	A measurement

Identifying the real causes of your firm's health is vital to implementing a successful change in business strategy. To cite an example from the consumer world, most brands with call centers commonly measure such things as time on hold and minutes per call. But these metrics don't measure or predict real customer satisfaction; they are only lagging indicators. Research by Convergys shows that customer satisfaction is predicted by two things:

1. Is the customer service representative knowledgeable?

2. Is the problem resolved on the first call?

By working to improve the leading indicators, you necessarily will improve the ...