Leading indicators are forward-looking Metrics that predict future conditions, giving organisations a glimpse of potential outcomes. In contrast, lagging indicators are retrospective, providing insights into the current state of a product or business by analysing past performance. Essentially, leading indicators act as predictors, while lagging indicators serve as confirmations.
An easy way to conceptualise the difference is by imagining your product as a car. Looking out the windscreen represents leading indicators, as they show what’s ahead. On the other hand, looking in the rearview mirror signifies lagging indicators, reflecting the road already travelled. This analogy helps highlight how each type of indicator serves a different purpose in assessing and predicting business performance.
