Leading vs lagging indicators in operations

Revenue, churn, completed orders — these are lagging indicators. They're real and important, but by the time they move, the cause is weeks in the past. Tracking only lagging metrics is like driving by looking in the mirror.

Leading indicators are levers

A leading indicator is something that moves before the outcome and that you can actually influence today: pipeline created, response times, queue depth, activation steps completed. Watch these and you can act early, while there's still time to change the result.

Balance the two

• Use lagging metrics to know if you're winning.
• Use leading metrics to do something about it before it's too late.
• For every outcome you care about, find the leading signal that predicts it.
• Don't bury the few predictive metrics under dozens of historical ones.

Lagging metrics grade the past. Leading metrics let you change the future. Track enough of the second to act in time.