Turning Lagging Indicators into Learning Indicators: Rethinking Performance Metrics for Agile Decision-Making

One of the most powerful insights I've discovered over the years is the importance of aligning your business goals with clear, valuation-driving metrics. Too often, business owners chase growth without realizing they're actually moving away from long-term value.

Let me share a quick story about a client (we'll call him Bob). Bob built an impressive company that hit every revenue goal he set. But when it came time to sell, he discovered a painful truth: his business wasn't as valuable as he thought. He'd unknowingly created risk by relying heavily on a single customer, leading to a massive $35 million valuation shortfall.

Bob's experience taught me a valuable lesson: growth is great, but it must be balanced with metrics that genuinely drive value. That's why I champion the Valuation-First methodology with all my clients. It ensures every decision, every strategy, and every dollar spent aligns directly with the metrics that matter most.

What are these metrics? They're simple but powerful: concentration of revenue, churn rate, EBITDA/burn rate, pipeline strength, employee engagement, and employee churn. By tracking and optimizing these six core metrics, you're not just building revenue—you're building lasting value.

Imagine having clarity on exactly what drives your business valuation. Imagine confidently making decisions, knowing each one is strategically aligned to enhance your company's worth. That's the power of focusing on valuation-driving metrics.

The next time you're setting your goals or planning your next move, pause and ask yourself: "Will this increase my company's long-term value, or just short-term revenue?" Make valuation your compass, and you'll never lose your way.