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Leading and Lagging Indicators Print

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Two kinds of measure.

LAGGING INDICATORS

Results after the fact: revenue, profit, customers lost.

They tell you what happened.

LEADING INDICATORS

Things that predict results: enquiries, quotes issued, pipeline, response times.

They tell you what is coming.

WHY BOTH MATTER

Lagging figures confirm. Leading figures give you time to react.

WHAT MOST BUSINESSES TRACK

Lagging only.

By the time revenue falls, the cause is months old.

EXAMPLES OF USEFUL LEADING INDICATORS

Enquiries this week Quotes outstanding Bookings for next month Customers who have not bought recently Stock approaching depletion

WHAT TO DO WITH THEM

Review weekly, not monthly.

WHAT THAT ENABLES

Acting before the result arrives.

WHAT TO ESTABLISH

Which leading indicators actually predict your results.

HOW

Compare them against results over several periods.

WHAT TO DROP

Leading indicators that predict nothing.


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