Have you ever wanted to have a million dollars? Or, be able to run a marathon? Or, get a big promotion at work?
These are all examples of lagging indicators. They're results. You see them after you've done the work to get them.
Lagging indicators are usually oriented around an end result. You can't just make a lagging indicator happen.
Instead, you need something that you can pursue regularly (daily, monthly, etc) that may produce the desired results. That's where leading indicators come in.
You can measure a leading indicator at a much finer detail & monitor it frequently. Success in achieving the leading indicator regularly should lead to improvement in the lagging indicator.
For example:
- You want a million dollars? Measure whether you contributed $1,000 to your savings/investments each month.
- You want to be able to run a marathon? Measure the distance you run each day & gradually increase it.
- Want to get a big promotion at work? Measure the week-by-week impact you're having for your team & the company (literally write it down).
When you're thinking about what you'd like to achieve, you can't stop with the lagging indicator - the result. You also need to find a leading indicator that will get you there. Then, measure and try to influence that leading indicator.