In the fast-paced world of Global Business Services (GBS), measuring performance is not just a necessity—it’s a lifeline. Yet, when I ask GBS leaders how they measure success, the responses often revolve around metrics that tell them what has already happened: cost savings, customer satisfaction scores, or processing times. These are lagging metrics—important, yes, but they only tell part of the story. What’s missing is the forward-looking perspective that leading metrics provide.
Why Lagging Metrics Aren’t Enough
Lagging metrics are like looking in the rearview mirror while driving. They give you a clear picture of where you’ve been but they won’t help you navigate the road ahead.
These metrics are essential—they help us understand the impact of our efforts and provide a benchmark against industry standards. However, they come with a critical limitation: by the time you see the results, it’s often too late to do anything about them. If your cost reduction targets aren’t met or customer satisfaction dips, you’re reacting to a problem that has already occurred.
The Case for Leading Metrics
To truly excel as a leader in GBS, it’s crucial to complement lagging metrics with leading metrics.
I remember when I lived mainly by lagging metrics, at the end of every month I was nervous about whether we achieved the goals. Then for each goal, we identified several indicators that we were able to influence in real time. Suddenly when these metrics were met every day, inevitably we regularly met our overall goals. Our lives became much easier, and we were able to have a good sleep every night. These predictive measures you should proactively manage best every day, and they offer you insight into future performance that will help you achieve your overall goals.
Here’s why leading metrics should be a key part of your performance measurement strategy:
- Proactive Decision-Making:
- Leading metrics empower you to take action before problems arise. For example, instead of only tracking customer satisfaction after the fact, monitor customer inquiry trends, or first-time resolution rates. If you notice a surge in unresolved inquiries, you can address the issue before it impacts overall satisfaction.
- Alignment with Strategic Goals:
- Leading metrics can be aligned with your long-term goals. If one of your GBS objectives is to improve process efficiency, track employee training hours or automation implementation progress. These metrics provide early indications of whether you’re on the right track to achieving your efficiency targets.
- Driving Continuous Improvement:
- Continuous improvement is the backbone of successful GBS operations. Leading metrics such as error rates in real-time or cycle time for key processes help you identify areas for improvement while there’s still time to course-correct.
- And … you can sleep well in the night!
Practical Examples in GBS
I would like to put this into context with a few examples that illustrate how leading metrics can transform your GBS operations.:
- Example 1: Invoice Processing
- Lagging Metric: Average time to process an invoice.
- Leading Metric #1: Percentage of Invoices Processed Within the First 24 Hours.
- Leading Metrics #2: Error Rate in Invoice Entries
- Leading Metrics #3: Number of Invoices Flagged for Discrepancies
- Insight: Tracking how many invoices are processed within the first 24 hours of receipt, without error and discrepancies can indicate the efficiency of your processing system.
- Example 2: Customer Support
- Lagging Metric: Customer satisfaction score post-service.
- Leading Metric #1: First Contact Resolution Rate
- Leading Metrics #2: Average response time to customer inquiries.
- Leading Metrics #3: Volume of Escalated Cases
- Insight: If response times start to lengthen or inquiries are not resolved during the first interaction, it might indicate a need for additional support staff or improved workflow processes.
These are real-life examples that reflect actual process situations at the time. The details or metrics could be different based on various circumstances.
Conclusion: Balancing the Scales
In the end, both lagging and leading metrics have a place in the GBS world. Lagging metrics offer valuable insights into past performance and most probably those are the metrics that you will report to your clients. They should be supplemented with leading metrics that will help you achieve your commitments and guide future actions. By integrating both types of metrics, you as GBS leaders will not only understand where you’ve been but also gain the foresight to steer your operations towards sustained success.
It’s important for us as GBS leaders to stop relying solely on the rearview mirror and start looking through the windshield. By embracing leading metrics, we can not only measure success but actively drive it.