Lead and Lag Indicators

Lead indicators and lag indicators are two types of performance metrics that organizations use
to track progress towards their goals.

Lead indicators are metrics that provide information on future performance. They are
predictive in nature and provide insight into the likelihood of achieving future goals. Examples
of lead indicators include customer satisfaction ratings, employee engagement scores, and sales
pipeline metrics. These indicators help organizations identify potential challenges and
opportunities that may arise in the future.

Lag indicators, on the other hand, are metrics that provide information on past performance.
They are retrospective in nature and provide insight into the success or failure of past efforts.
Examples of lag indicators include revenue, profit, and customer retention rates. These
indicators help organizations assess the effectiveness of past strategies and tactics.

Both lead and lag indicators are important for organizations to track. Lead indicators help
organizations anticipate and prepare for the future, while lag indicators provide insight into the
effectiveness of past efforts. By monitoring both types of metrics, organizations can make
informed decisions that drive future success.