It's natural to equate success with outcomes: we celebrate when our team scores a goal, when we receive a diploma at the end of our studies, and when our bank balance gets bigger.
Obviously outputs matter, but fixating on them distracts us from the key inputs that influence where we end up. This is particularly relevant in business, where obsessing over the numbers on a financial statement can blind us to how those numbers got there in the first place.
You can't scale a thriving business (or turn around a hot mess) if you don't understand the root causes. This ought to be self-evident, yet many business owners only track lagging indicators of success (e.g. sales, revenue, net profit) with scant regard for the leading ones.
One simple tactic for getting to the bottom of your success (or lack thereof) is by asking a series of nested "why" questions. As you peel away the layers, you'll likely uncover hidden catalysts shrouded by blind spots.
For example, imagine a business grows its revenue from R1 million to R10 million over the course of several months. What's responsible for this success?
Let's start with the first and most obvious "why": why did their revenue increase so sharply? Perhaps the primary cause was the launch of a new product line that their existing customers snapped up like hot cakes.
Why did they introduce this new product line? Let's assume the sales manager insisted that they do so.
Why was the sales manager so insistent? Presumably he believed that their customers would love it.
Why did he believe this? Maybe he had a hunch based on his market experience, which was validated when someone inquired about the product on the company's Facebook page and a few dozen people seconded the request shortly afterwards.
The obvious conclusion is that customer feedback is a leading indicator for sales. Hardly ground-breaking insight, but it has profound implications if this fictional business (like many actual companies) allocates substantially more time, effort, money and other resources to growing sales (a lagging indicator) than soliciting customer feedback (a key leading indicator).
It usually only takes four or five "why" questions to uncover a key leading indicator. When you do, treat it with the same reverence as your output priorities: set targets, plan how to achieve them, and track your progress.