Key Drivers: What Actually Moves Business Performance (And Why Most Founders Miss Them)
Articles
January 05, 2026
Written by
Nikunj Mody
Author
Table of Contents
As a founder, you probably know your business deeply.
You can explain your product, customers, pricing logic, supply chain, and team structure without looking at a dashboard.
Yet when someone asks why profits moved last quarter, why cash felt tighter than expected, or what exactly to fix next – the answer often feels less certain.
That gap isn’t about intelligence or effort.
It usually comes down to one thing: confusing outcomes with drivers.
Revenue, profit, and cash tell you what happened.
They rarely tell you what to change.
And as businesses grow, that distinction starts to matter a lot more.
Why Founders Struggle With This as the Business Scales
In early stages, founders are close to everything.
Actions and outcomes feel tightly connected.
But as scale increases:
- More people execute decisions
- More variables influence results
- Delays between action and outcome grow
- Noise increases faster than clarity
Most founders respond by tracking more numbers.
More MIS.
More dashboards.
More reports.
Ironically, this often creates the opposite effect.
Instead of clarity, you get:
- Too many metrics with no clear priorities
- Meetings focused on explaining the past
- Decisions driven by instinct rather than conviction
The real issue isn’t lack of data.
It’s lack of driver clarity.
A Better Way to Think About Performance: Outcomes, Drivers, Actions
A simple mental model helps cut through this.
Think of business performance in three layers:
1. Outcomes (What you want)
- Revenue
- Profit
- Cash flow
These are results. Important – but backward-looking.
2. Drivers (What influences outcomes)
- Pricing and discounting behaviour
- Volumes and mix
- Contribution margins
- Customer acquisition cost vs lifetime value
- Inventory days or receivable cycles
Drivers sit between effort and results.
If a driver moves, outcomes move – predictably.
3. Actions (What teams do daily)
- Sales focus
- Hiring pace
- Procurement decisions
- Inventory planning
- Credit terms
Actions affect drivers.
Drivers affect outcomes.
When founders skip the middle layer, decisions feel fuzzy.
A good test:
“If we improve this, can I clearly explain which outcome will change – and how?”
If not, it’s probably not a real driver.
How This Shows Up in Real Businesses
Consider two common scenarios:
Scenario 1: Revenue is growing, but profits aren’t.
Most discussions stay at the outcome level:
- “Sales is growing but margins are under pressure.”
A driver-level view reframes it:
- Is discounting increasing?
- Is product mix shifting?
- Are variable costs creeping up per unit?
Now the conversation becomes actionable.
Scenario 2: Cash feels tight despite reported profits.
Outcome-level reaction:
- “We need more funding or tighter cost control.”
Driver-level clarity asks:
- Are receivables stretching?
- Is inventory building faster than sales?
- Are payables terms changing?
Suddenly, the issue isn’t profitability – it’s working capital behaviour.
What Founders Should Actually Focus On
Founders don’t need dozens of drivers.
They need a few that matter right now.
Some practical principles:
1. Pick one primary outcome to optimise at a time
(profitability, cash stability, or controlled growth)
2. Identify 5–7 drivers that:
- Directly influence that outcome
- Are controllable by the business
- Respond meaningfully to action
3. Review drivers more frequently than outcomes
- Weekly for early signals
- Monthly for learning
- Quarterly for recalibration
Outcomes tell you what happened.
Drivers tell you what will happen next.
Leadership & Mindset: Where Founders Make the Biggest Difference
Driver-based thinking is not a finance exercise.
It’s a leadership discipline.
A few mindset shifts matter:
- Simplicity beats sophistication
Five well-understood drivers reviewed consistently outperform complex dashboards.
- Ownership matters more than reporting
Every driver needs a clear owner and a known response when it moves off track.
- The goal isn’t control – it’s clarity
Drivers help teams understand where to intervene, not just what went wrong.
A mature founder question isn’t:
“Why did profit drop?”
It’s:
“Which driver shifted – and why?”
From Information to Better Decisions
When founders get clear on key drivers:
- Decisions feel calmer and more confident
- Teams align faster around priorities
- Finance shifts from reporting history to supporting decisions
- Performance becomes explainable, not surprising
That’s when finance stops being about numbers – and starts becoming a real leadership tool.
If this perspective is useful, you may also want to explore the shorter 2-page note or the infographic version for a quick refresh.
Sometimes, clarity doesn’t come from more data – it comes from looking at the right levers.
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