What are Leading and Lagging Indicators, and what are best practices, tools and online templates for teams and organizations?
Definition of Leading and Lagging Indicators
Leading and Lagging Indicators are two types of measurements used when assessing performance in a business or organization. The difference between the two is that a leading indicator can influence change and a lagging indicator records only what has happened in the past. Both types of measures, however, are useful to track and measure overall performance.
Description of Leading and Lagging Indicators
Leading Indicators are a potentially predictive measurement of how a company might perform in the future. They are more easily influenced than lagging indicators, but are harder to predict. For example, a Leading Indicator, if you wanted to increase sales, could be increasing the number of sales calls or developing a stronger marketing plan. Measuring these activities provides a set of Lead Indicators, but it is difficult to measure what exactly was the cause of the increase in sales. They are difficult to assess because they are not straightforward.
Lagging Indicators, on the other hand, are easier to measure because they measure what has happened in the past. For example, a Lagging Indicator for Sales would be measuring the number of sales calls made last month. This kind of information is easy to obtain and measure. Lagging Indicators are a post-event measurement which is essential for charting progress, but not helpful when attempting to influence the future.
When developing a business strategy, a combination of Leading and Lagging Indicators is the best way to measure performance. The reason for this is that a lag indicator without a lead indicator will give no indication as to how a result will be achieved and provide no early warnings about tracking a strategic goal.
Tools & Templates
Most organizations use spreadsheets and online dashboards to track and share their key metrics, as well as presentation software to communicate the current state of the organization to executives, managers and employees.
upBOARD's Online Leading and Lagging Indicators Tools & Templates
Unlike most traditional Leading and Lagging Indicators processes, upBOARD’s online Leading and Lagging Indicators tools allow any team or organization to instantly begin working with our web templates and input forms. Our digital platform goes far beyond other software tools by including progress dashboards, data integration from existing documents or other SaaS software, elegant intuitive designs, and full access on any desktop or mobile device.
Learn more about upBOARD’s portfolio of other operations best practice tools and templates, including:
5 S System, Brainstorming, Business Process Re-engineering, Gemba Walk, House of Lean, House of Quality, Huddle Boards, Just in Time (JIT), Kaizen, Kanban Boards, Key Performance Indicators, Leading and Lagging Indicators, Lean Manufacturing, Objectives & Key Results, Operational Performance Management, Outsourcing Decision-Matrix, Performance-Based Budgeting, QDIP Board, RATER Model, Six Sigma, SQDC Board, SQDCM Board, Supplier Relationship Management (SRM), Theory of Constraints (TOC), Total Quality Management (TQM), Value Stream Mapping, and Zero Defects.