What is the difference between lead and lag indicators? Lag measures are what you want to achieve, the thing you want to improve or increase. It could be sales, leads, newsletter subscribers, or website visits. They’re called lag measures because all events have already happened when you reach that number. The lag measure is the result.
On the other hand, lead measures are the drivers that affect the result in one way or another. Lead measures occur during the sales process, and changing how you approach them will alter your bottom line. By improving your lead measures, you will ultimately enhance your lag measures.
Chris McChesney and Sean Covey illustrate this concept in their book, “The 4 Disciplines of Execution.” Their example is this: while you can’t control whether your car breaks down on the side of the road (a lag measure), you can control the lead measure, which is how often your vehicle receives routine maintenance.
As you can see, there is more to driving sales than just measuring the result. The trick is finding and tracking the lead measures that mean the most to your business. It is easy to fall into a rabbit hole and track so much data that you feel too paralyzed to make decisions. However, focusing on a few key metrics will help you take action.
Lead and lag measures work together to give you the information to succeed. Here are some real-life leading and lagging indicators to help you understand what this might look like for your business. The lead measure is listed first, and the lag is second.
Lead vs. Lag
You can see how lead measures can help you take a more predictive approach to your business while only looking at lag measures is more of a reactive approach. Here are a few other good examples of lead measures to consider for your business:
Changing your lead measures can ensure a better outcome for your lag measures.
It can take time to establish which lead and lag measures to focus on. However, an experienced professional business coach can help. So please fill out my contact form and determine the perfect lead and lag measures for your business.
Coach Dave
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