Here’s what I imagine happens.

You decide you want to own a restaurant. You find a location and make it look pretty inside. You create a menu that you think is good. Then you open your doors with bright eyes and bushy tails and visions of a mad rush right around the corner.

Maybe it’s not quite the mad rush you were expecting, but customers come in and try the restaurant.

“The food is good,” they say with a smile.

You feel great about that. That’s how any mad rush begins, right?

But the masses don’t come. Over the next months, new people keep showing up at the restaurant to try it. Maybe even two or three turn into regulars.

In fact, Max and Martha now eat there the first Friday of every month. Aren’t they just the cutest thing ever?

“There’s something special about your pork tenderloin,” Martha tells you with her hand on your arm. Max nods and smiles.

But you look at your financials every month and, dag-nabbit, you still don’t have enough customers to get to profitability.

You decide to close on Mondays to save on labor expenses. You make the big decision and breathe a sigh of relief. But at the end of the month you look at your financials again and it still doesn’t cover the losses.

Time to consider reducing costs on the menu. The tenderloin is the highest costing item. You should remove it from the menu.

“But we can’t hurt the regulars,” you say. “Max and Martha will be so disappointed.”

So you get rid of a bunch of other menu items instead.

But, alas, there is no mad rush. There is no growth. It’s just steady traffic that falls below profitability.

Then you have a brilliant idea: Live Jazz on Thursdays!

This will work. You know it will. This will help the restaurant survive.

But it won’t. Four months later you shut down.

The Wrong Indicators

Everybody else sees the ship sinking.

You may think advertising Live Jazz on Thursdays will reinvigorate your traffic, but I can assure you that customers can sense a desperate Hail Mary when they see it.

When the band continued to play while the Titanic was sinking, do you think people said “oh look, live music! Everything must be fine”?

The answer is “no, they didn’t”. The ship was sinking. They got themselves the hell out of there.

Here’s the thing though, the restaurant owners could’ve seen the signs of stagnation far in advance. They could’ve addressed it.

Unfortunately, they were so focused on lagging indicators that they didn’t pay attention to all the signs.

In fact, here are some of the metrics that should’ve caused alarms to go off in their business leadership minds:

Most customers weren’t coming back a second time.

Most customers weren’t recommending the restaurant to their friends

There wasn’t a meaningful increase in the number of loyal customers

They weren’t implementing a feedback loop to understand how to create a better experience

All they did was look at their financials and keep slashing away.

Does that sound like you? Without the restaurant part.

The Signs Along The Road

The future is ahead of you.

That sounds obvious, I know. But so many leaders spend their time looking at historic data and believe they can grow the business by looking at the past.

Here’s a secret: You can’t change the road you’ve already traveled. You can only change the path in front of you.

Sure, historic data is important and it can give you insight into where you’ve been. But where you’ve been isn’t always a great indicator of where you’re going.

If you want to control your growth, you must look to the road ahead of you.

Unfortunately, that road ahead is dangerous. There are potholes, snipers, and dead ends.

But don’t you worry your leadership lungs on this: there’s a “good news / bad news” scenario here for you.

The good news is that there are signs along the road ahead to warn you of the dangers. As long as you pay attention to the signs, you can make adjustments before they kill you.

The bad news is that the signs are hidden. If you don’t pay attention, you’ll miss them. In fact, you have to consciously look for the signs in order to get the warnings.

6 Leading Indicators

Your business doesn’t need to be losing money to be stagnating. In fact, you can even be growing your business and still on the road to stagnation.

Simply because money is coming in the door, it doesn’t mean your future is bright. As I said, there are hidden signs out there that the road ahead may be bumpy.

Here are six leading indicators that might be worth considering.

1. Are competitors growing at a faster rate than you?

Because you’re growing, it doesn’t mean you’re not moving backward.

2. Is your YOY growth better or worse than the competition?

What caused you to slow down? Or them speed up?

3. Is there an increase in employee turnover at your company?

Leadership is not aware of all the problems

4. Is there an increase in client turnover?

Where is your feedback loop?

5. Do employees lack accountability?

Lack of accountability is a virus that can become deadly. Oh, and the answer isn’t to just push them harder.

6. Are loyal clients challenging the company more than they have in the future?

By the time your loyal clients are unhappy, well… that’s not good


There are a whole bunch of different leading indicator options out there. If you don’t know your most important ones yet, I strongly encourage you to figure it out.

Nobody likes surprises.

And nobody is showing up because you have Live Jazz on Thursdays.

If you like this article, please share it


The Best Leadership Newsletter Ever
in your inbox
every Monday morning.