Leading and Lagging Indicators

Lagging Indicators are typically output-oriented—easy to measure but hard to improve or influence. Leading Indicators, on the other hand, are typically input-oriented—hard to measure but easy to influence.

Let us illustrate this with a simple example:

For many of us, a personal goal is weight loss. Your weight is a clear Lagging Indicator that is easy to measure. You step on a scale and you have your answer, but how do you actually reach your goal? For weight loss, there are two Leading Indicators:

• Calories consumed
• Calories burned

These two indicators are easy to influence—you just need to eat less and move more. However, they’re challenging to measure. When you order lunch in a restaurant, the number of calories may not be listed on the menu. Even if you can secure a calorie count for everything you eat, accurate figures will require precise measurements—a digital food scale, measuring cups...