Why your board is missing “the next miss”

Hi Everyone,

The metrics section of most board decks is heavy on the past – revenue from last quarter, burn from last month, churn from cohorts that signed up a year ago.

That's useful for confirming the past, but it won't help your board see the next miss coming.

Today, we're walking you through how to add one or two leading indicators to your board dashboard and how to pick the ones that fit your business.

The two kinds of metric

Lagging metrics describe what already happened, like revenue, burn, customer count, and churn.

Leading metrics describe what's about to happen if nothing changes, like pipeline created this month, activation rate this week, or employee engagement direction.

McKinsey research on more than 770 board directors found a clear difference between high-impact and low-impact boards. High-impact boards reviewed leading indicators and nonfinancial metrics. Low-impact boards focused on basic reviews of financial metrics and compliance. Boards that only look backward end up reacting to misses they could have caught months earlier.

At least one of the metrics on your board page needs to face forward. Even one good leading indicator changes what your board can do. Your directors can act on a softening pipeline months before it shows up in revenue.

Pick the right leading indicator for your business

Here are four leading indicators worth considering. Most companies need one or two on the board page, not all four. Pick the ones that best predict the lagging metric your board worries about most.

Pipeline created and pipeline coverage: Strongest for businesses with a sales cycle longer than 30 days, whether that's B2B SaaS, agencies, consulting, or financial services. The quarter is in trouble when pipeline coverage drops below 3x, often before anyone in the room notices.

Activation rate: Strongest if your revenue depends on new users reaching a moment of value quickly, common in product-led SaaS and self-serve businesses. A drop in activation usually shows up in revenue three or four months later.

Net revenue retention by cohort: Strongest if expansion and renewals drive most of your revenue. A downward NRR trend means your next renewal quarter will be in trouble before the renewals come due.

Employee engagement and recruiter pipeline: Strongest if your revenue depends on billable people, common in agencies, consulting, and professional services. Falling engagement plus a thin recruiter pipeline are early signs that margins will shrink six months out.

Two rules to keep it honest

1. Keep your lagging metrics on the page. Revenue, burn, and cash runway are what your board uses to track financial health. Add one or two leading indicators alongside them, and your dashboard stays around six to ten metrics.
2. A leading indicator earns space only when you can show it predicts the lagging metric you care about. Pipeline coverage that doesn't accurately predict next quarter's revenue is just a vanity number on the page.

The simplest way to test the link is to look back. Plot your candidate leading indicator and your lagging metric side by side over the past six quarters. The real ones move first; the others move at the same time as the lagging metric, or not at all.

Before your next board meeting

Spend 15 minutes with your current dashboard. Count how many metrics describe the past, and how many describe what's coming. If almost everything is past-tense, pick one or two leading indicators that fit your business and add them to the next deck.

Once they're on the page, run one more test. When a leading indicator moves down, you should know which lagging metric will move next, and roughly when. A metric that doesn't pass that test won't help your board and should come off the page.

When the system works, you spend less time at board meetings explaining what already happened, and more time on what to do about what's coming.

Go deeper

👉 McKinsey: High-performing boards — what's on their agenda? – The research on 770+ directors that found high-impact boards review leading indicators and nonfinancial metrics.

👉 Sequoia: Preparing a Board Deck – Bryan Schreier's case for choosing the fewest correct metrics to put in front of your board, with a clear deck structure.

👉 Tomasz Tunguz: Theory SaaS Startup Key Metrics Template – A worked example of a board-level metric set, with people and customer success leading indicators alongside revenue.

👉 Mark Suster: 6 Things Every Business Leader Should Do Before a Board Meeting – Why you should never build separate metrics for the board that you don't already use to run the company.

Coming up tomorrow

Tomorrow we'll show you how Shopify deleted 12,000 meetings overnight, what Starbucks let grow unchecked, and what your team's defaults are doing right now.

Thanks for reading!

P.S. How many metrics on your last board dashboard described what's coming versus what already happened? Hit reply with the split.