We will explain in a way that is accessible to everyone, simple and quick, the difference between Leading and Lagging indicators. In just 5 minutes of reading, you will understand these concepts thanks to concrete and easily understandable examples, even if you are not in IT. This article will also be useful if you wish to pass the Professional Scrum With Kanban 1 certification from scrum.org
What is a “Leading” indicator?
Leading indicators, translated as “advanced” indicators, reveal ongoing progress and performance. They are used to guide and adapt daily initiatives. In other words, they “guide us, influence us”. (I like to go back to the principle of “leader”, a leader must guide us, influence us collectively to achieve our goals, it is the same for our metrics and indicators).
A daily example(fitness):
- Your daily step count: If your goal is to lose weight or improve your fitness, the number of steps you take each day can be a good indicator of your progress towards this goal: If you ever check your pedometer or app, and you are at 9000 steps instead of 10000. At this point, you will go outside to continue walking and reach your goal, this number guided you to the success of your goal!
- Your total step count per week: The total number of steps per week can be another guide for you (if one day you have taken 8000 steps, but the other you have taken 12000, then you are still on track towards the goal… Exceeding the goal can also be an additional motivation)
A non-IT example (in the restaurant business):
- The number of reservations you have for the coming week: This figure could help you estimate/plan the necessary staff, adapt the schedule, as well as the quantity of food to order, etc.
What is a “Lagging” indicator?
Lagging indicators, translated as “lagging” indicators, on the contrary, confirm an event that has already occurred. This therefore allows for empirical analysis, “evaluate to adapt”.
A daily example(fitness):
- The weight: If your goal is to lose weight, your current weight is a Lagging indicator. If you take 10,000 steps a day, and you haven’t lost a gram, then maybe your diet is not following, that you simply gained muscle, or there is another underlying problem (lack of sleep, excess stress…).
- Your total step count per week: Did I achieve my goal of 70,000 steps per week? Did I really achieve my average of 10,000 steps per day? Why? Organization problem, lack of time, unforeseen events…?
A non-IT example (in the restaurant business):
- The number of reservations honored over the past week: This figure can help you better manage your estimation and planning of necessary staff, the quantity of food to order, etc. In summary, you could estimate a “margin of error” in order to be sure to be able to serve enough people, reduce waste related to over-ordering of stock, or on the contrary plan more stock to be able to serve the right number of people.
Example in Scrum With Kanban context
Metrics addressed:
- The WIP (Work In Progress) which corresponds to the number of work items in progress.
- The WIA (Work Item Age) which represents the elapsed time since the start of a work item.
- The CT (Cycle Time) is the total time needed to complete a work item from the time it starts to its completion.
- The Throughput, which is the quantity of work items completed in a given time span.
Leading Indicators
You follow the WIP, every day during the Daily Scrum, it helps you adjust and improve your process in real-time, by guiding your analysis and decisions.
For example, if we notice that we are handling too many tickets at the same time, then it is time to refocus and avoid spreading ourselves thin, otherwise we risk not achieving the sprint goal!
The Work Item Age is an excellent indicator to identify work items that may be blocked or require special attention, so, thanks to this one, we can become aware and take the necessary measures (for example, propose technical reinforcement on the ticket).
Lagging Indicators
Using Throughput, we can evaluate and share the team’s performance for the current Sprint. It’s an indicator that allows us to look back, to reflect on the past.
If the indicator drops, we discuss the reasons for this drop and implement measures to improve our performance and reduce negative impacts.
If, on the other hand, the indicator increases, we seek to understand why and how we can capitalize on these improvements.
We can also use the Cycle Time, this will help to evaluate the effectiveness of the work process, the impact of new measures and identify potential areas for improvement.
I go into more detail on the metrics and their uses in the following article:
Conclusion: The balance between Leading and Lagging
These indicators are always there to inspect and adapt. The important thing is to find a balance between Leading and Lagging indicators to have a complete, complementary and accurate view of your performance.
Lagging refers to the past, while Leading focuses on the current and the future.
Think of these indicators as the two sides of the same coin. On one side, Leading indicators, help you adjust and improve your actions in real-time. They are like indicators and warning signals that allow you to adapt your trajectory to achieve your goals.
On the other hand, Lagging indicators allow you to evaluate and adapt your past performance, these are the “performance measures”
If you know your daily and weekly number, but not your weight, it is difficult to judge if the action has an impact on your goal!