Design thinking resource

Leading and Lagging Indicators

Measures used to monitor performance, anticipate future outcomes and evaluate achieved results.

Leading indicators provide early signals

Leading indicators are measures that suggest what may happen in the future. They act as early warning systems and help organisations identify emerging opportunities and risks.

Examples might include customer engagement levels, training participation, prototype usage, employee capability development or stakeholder involvement. While these measures do not guarantee future outcomes, they often provide useful clues about likely performance.

Monitoring leading indicators enables organisations to act proactively rather than waiting for results to appear.

Lagging indicators measure achieved outcomes

Lagging indicators assess performance after activities have occurred. They help organisations understand whether objectives were achieved and whether desired outcomes have been realised.

Examples may include revenue growth, customer retention, implementation success rates, social impact outcomes or environmental performance measures.

These indicators are valuable because they provide evidence of actual results rather than predictions. However, because they are retrospective, they may not provide sufficient warning when performance begins to decline.

Both measures are needed

Leading and lagging indicators serve different purposes. Leading indicators help organisations influence future outcomes, while lagging indicators help assess performance after results occur.

Using both types of measures creates a more complete understanding of progress and performance. This balanced approach helps teams identify issues earlier, respond more effectively and make more informed decisions.

Together, leading and lagging indicators strengthen monitoring, evaluation and strategic management.

Put the method to work

Put Leading and Lagging Indicators into practice

Define strategic objectives

Clarify what success looks like and identify desired outcomes.

Select leading indicators

Choose measures that provide early signals about future performance.

Select lagging indicators

Identify metrics that evaluate achieved outcomes and results.

Review performance regularly

Monitor trends, analyse findings and adjust actions where necessary.

Why it matters

What Leading and Lagging Indicators make possible

Improves performance visibility

Teams gain a clearer understanding of current progress and future risks.

Supports proactive action

Leading indicators help organisations respond before issues become significant problems.

Strengthens evaluation

Lagging indicators provide evidence about the outcomes that have been achieved.

Enhances strategic decision-making

Combining both measures creates a richer and more balanced understanding of performance.

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