(Originally published on Coventry University School of Management Blog but it’s no longer available there, so updated and re-released)
When times are good, when the economy is growing when growing sales is easy, it’s very easy to get complacent. But when times are hard, when economies are flatlining and sales are shrinking, the need to understand a business’s key metrics becomes very apparent.
But so often businesses focus on the wrong metrics.
The focus is on:
- What’s easy to track rather than what’s right.
- Vanity rather than sanity.
So how do you make sure you don’t fall into that trap?
Ask the question, “Is this an indicator metric or a brake light?”
What do I mean by that?
One of the key lessons I was taught by my driving instructor was “mirror, signal, manoeuvre (eg. braking)”. When driving, we signal our intention first and then our brake lights come on to show what’s happening. Indicators should be flashing well before the brake lights glow, if I’m the following driver by responding to the indicators I give myself plenty of time to make adjustments to my driving before the car in front’s speed reduces ensuring I don’t go into the back of them!
But often, when I review a business’s business dashboard, the metrics are filled with “brake lights” showing that the business is already stopping rather than “indicators” showing that there might be problems ahead with time to make adjustments to avoid it.
For example, the business dashboard might include sales figures. But if sales are dipping it’s too late to correct, the stopping is already happening. Whereas lead generation is an indicator, if lead flow is slowing then there is time to review lead generation activity before the sales start to drop.
But often these indicators are less easy to track and don’t have the board room table kudos. My finance software can easily generate a sales report but even many CRM systems are far less capable at generating accurate lead analysis reports, but just because it’s easy to generate a report doesn’t mean it’s the right one.
So, as you plan your business dashboard for 2026, make sure you focus on indicators and not brake lights so that you can drive your business to success!