Stop Flying Blind: The Proxy Measures Guide That Actually Works
- Finaxios LLC
- May 29
- 4 min read
Every executive has been in that boardroom moment: "We've spent millions on digital transformation—what exactly are we getting for it?"
The usual answer? "Trust me, it's working." That doesn't fly anymore.
Here's the reality: traditional metrics are broken for digital transformation. Revenue takes months to move. Cost savings stay theoretical. Customer satisfaction surveys come out quarterly if you're lucky.
Meanwhile, your transformation is either succeeding or failing right now, and nobody can tell which.
What Actually Are Proxy Measures?
Forget the fancy definitions. Proxy measures are your early warning system. They predict what's coming before your regular metrics catch up.
Real example: A manufacturing company invested heavily in self-service tools. Revenue didn't budge for months. But something interesting happened—customers used the new portal 3x more frequently, support calls dropped 40%, and satisfaction ratings for digital interactions jumped immediately.Those were their proxy measures. They showed the transformation was working months before it appeared in the P&L.
Another company tracks mobile app usage in the first 30 days. Turns out, customers who use their app more than 3 times in month one stick around 60% longer. That's gold—they can spot retention issues and fix them before customers actually leave.
Why This Matters More Than Ever
Let's be honest about what we're dealing with:
The Time Problem: Your CEO wants answers now. Traditional ROI calculations take 6-12 months minimum. That's not fast enough for anyone making real decisions.
The Complexity Problem: Modern transformations touch everything. One metric can't capture what's actually happening across systems, teams, and processes.
The Confidence Problem: When you can't show progress for months, people lose faith. Transformations get killed not because they weren't working, but because nobody could prove they were.
Here's a stat that'll hurt: 74% of companies are running critical operations on legacy systems that eat up 70% of their IT budget just for maintenance. Meanwhile, 76% of executives claim they've already implemented "advanced technology" somewhere. The disconnect is real.
How to Actually Do This (The Real Process)
Start With Your Own Data
Don't overthink this. Look at what you already have. Most companies are sitting on patterns they've never connected.
Folks in operations know these patterns well! For example, “You can tell if transformation is working just by watching help desk tickets. When they shift from 'how do I do this' to 'can you add this feature,' you know you're winning.”
That's a proxy measure. It predicts customer adoption before usage analytics catch up.
Talk to the People Who Actually Know
Skip the executive strategy sessions initially. Go talk to:
Customer service reps who hear complaints first
Operations folks who see bottlenecks daily
IT support who know when systems are struggling
Salespeople who feel market changes immediately
They'll tell you what early warning signs actually matter.
Get the Politics Right
This is where most people mess up. Don't present a finished framework and expect buy-in.
Instead, run workshops where each team explains what success looks like to them. Finance wants dollars. Operations wants efficiency. Customer teams want satisfaction scores. IT wants system stability.
Find measures that predict multiple outcomes. That's how you get everyone aligned.
Build Actual Governance
Here's what happens without governance: your measures become meaningless as conditions change, and nobody notices until it's too late.
Set up a monthly review with reps from major functions. Give them real authority to change measures when they stop working. Define clear escalation triggers—what happens when metrics move outside normal ranges?
Most importantly: validate quarterly that your proxies still predict what you think they predict. Markets change. Customer behavior evolves. Your measures need to keep up.
Make It Matter for Decisions
The ultimate test: when budget season comes, will leadership actually use this data?
Too many beautiful dashboards don't influence a single resource allocation decision. Connect your proxy measures to specific business actions. Show how they predicted outcomes before traditional metrics caught them.
Who Should Actually Care
If you're leading transformation: These give you the feedback loop you need to course-correct before problems become expensive disasters.
If you're in finance: Better cash flow planning and investment decisions when you can predict outcomes earlier.
If you run operations: Spot efficiency problems and capacity issues before they hit customer experience.
If you own customer experience: Real-time insights into behavior changes that predict satisfaction trends.
If you're in IT: Finally prove business value of technical improvements with data leadership understands.
If you're the CEO: Get the predictive intelligence you need for confident strategic decisions.
What Actually Works
The companies getting this right share a few things:
They start small. Pick 3-5 measures max. You can always add more.
They involve frontline people from day one. Executives see outcomes. Frontline folks see leading indicators.
They document everything clearly. Vague definitions lead to arguments about results later.
They change measures when they stop working. This isn't failure—it's often a sign your transformation is succeeding and changing the underlying dynamics.
They connect measures to actions. If a metric doesn't drive decisions, it's just interesting data.
The Bottom Line
87% of senior leaders say digital transformation is harder than expected. No surprise there.
But here's what separates the winners: they build capability to predict and optimize value over time. They see opportunities before competitors. They adjust strategy based on real intelligence, not gut feelings.
The goal isn't perfect metrics. It's building an organizational muscle for making better decisions faster.
When your CEO asks about transformation value next quarter, you won't just have numbers. You'll have a story about what's working, what isn't, and what's coming next. More importantly, you'll have the confidence that comes from actually knowing instead of guessing.
That's what proxy measures really give you: the ability to manage forward instead of just reporting backward. And honestly? In today's environment, that might be the competitive advantage that matters most.
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