How to distinguish leading and lagging indicators?

Leading and lagging indicators are metrics that help assess the state and forecast the development of processes.

• Leading indicators predict future changes. They change before the result occurs and help make preventive decisions. For example, the number of new user registrations can be a leading indicator of revenue growth.

• Lagging indicators reflect events and results that have already occurred. They show the outcome but do not provide information about what will happen next. For example, revenue for the past month is a lagging indicator.

How to distinguish:

• If a metric changes before the key result and can serve as a signal for action — it is leading.
• If a metric reflects the outcome after the event — it is lagging.

Example:

• Leading: the number of calls to support (can predict an increase in problems).
• Lagging: customer satisfaction level after the problem is resolved.