A lagging indicator measures a result that has already occurred, such as the number of customer complaints, the on-time delivery rate or scrap cost. A leading indicator measures the in-process behaviour that influences the result, such as the completion rate of planned maintenance, first-piece approval time or training completion rate.
Management that monitors only lagging indicators always intervenes late, because what it measures has already happened. Leading indicators bring the window for intervention forward.
A healthy indicator set balances the two: lagging indicators track the target, leading indicators track the path to that target.
Related terms: Key Performance Indicator (KPI) · Process Owner
Related training: Process Management, Process Mapping and KPI Design