Consider a measurement continuum. At one end are lagging indicators. These are the results of your team’s past performance. They enable you to see if your activities produced the desired outcomes.
At the other end of the continuum are leading indicators. These are the drivers of your team’s future performance. They provide early warning signs of problems that might appear on the horizon. This continuum illustrates how leadership acts as the most crucial leading indicator of sustained, healthy growth:
Economic and competitive pressures compel many leaders to focus on lagging indicators, typically financial ones. Of course, it’s important to consider lagging indicators to know how well you have performed in the past. However, you must be careful not to neglect leading indicators, since you want to be able to predict how your organization will perform six, nine, or twelve months from now.
A singular focus on lagging indicators gives you little opportunity for corrective action if your team drifts off course. Healthy leaders look at both lagging and leading indicators, which allows them to connect the past and the future and to paint a more complete picture of team health.