Leading vs Lagging Project KPIs

𝗔𝗿𝗲 𝗬𝗼𝘂 𝗠𝗮𝗻𝗮𝗴𝗶𝗻𝗴 𝗧𝗵𝗿𝗼𝘂𝗴𝗵 𝘁𝗵𝗲 𝗥𝗲𝗮𝗿𝘃𝗶𝗲𝘄 𝗠𝗶𝗿𝗿𝗼𝗿? 𝗧𝗵𝗲 𝗣𝗼𝘄𝗲𝗿 𝗼𝗳 𝗟𝗲𝗮𝗱𝗶𝗻𝗴 𝗜𝗻𝗱𝗶𝗰𝗮𝘁𝗼𝗿𝘀 A plant manager once told me, “𝗪𝗲 𝘁𝗿𝗮𝗰𝗸 𝗲𝘃𝗲𝗿𝘆𝘁𝗵𝗶𝗻𝗴, 𝘀𝗰𝗿𝗮𝗽, 𝗢𝗘𝗘, 𝗱𝗲𝗹𝗶𝘃𝗲𝗿𝘆. 𝗜𝗳 𝘁𝗵𝗲 𝗻𝘂𝗺𝗯𝗲𝗿𝘀 𝗱𝗿𝗼𝗽, 𝘄𝗲 𝗳𝗶𝘅 𝘁𝗵𝗲 𝗽𝗿𝗼𝗯𝗹𝗲𝗺.” I asked, “𝗙𝗶𝘅 𝗵𝗼𝘄?” He hesitated. “𝗪𝗲𝗹𝗹... 𝘄𝗲 𝗶𝗻𝘃𝗲𝘀𝘁𝗶𝗴𝗮𝘁𝗲. 𝗪𝗲 𝗵𝗼𝗹𝗱 𝗽𝗲𝗼𝗽𝗹𝗲 𝗮𝗰𝗰𝗼𝘂𝗻𝘁𝗮𝗯𝗹𝗲.” That’s the problem, you can’t 𝗺𝗮𝗻𝗮𝗴𝗲 𝗮 𝗽𝗿𝗼𝗰𝗲𝘀𝘀 𝗯𝘆 𝗰𝗵𝗮𝘀𝗶𝗻𝗴 𝗿𝗲𝘀𝘂𝗹𝘁𝘀. That’s like driving while staring in the rearview mirror. 𝗟𝗮𝗴𝗴𝗶𝗻𝗴 𝗜𝗻𝗱𝗶𝗰𝗮𝘁𝗼𝗿𝘀: 𝗧𝗼𝗼 𝗟𝗮𝘁𝗲 𝘁𝗼 𝗙𝗶𝘅 𝗔𝗻𝘆𝘁𝗵𝗶𝗻𝗴 Most manufacturers track scrap, OEE, and delivery, but these only tell you 𝘄𝗵𝗮𝘁 𝗵𝗮𝗽𝗽𝗲𝗻𝗲𝗱, 𝗻𝗼𝘁 𝘄𝗵𝘆. 🔹 Scrap rate spikes, bad material or process issue? 🔹 OEE drops, machine breakdowns or slow changeovers? 🔹 Late deliveries, missing parts or downtime? By the time these numbers appear, 𝙩𝙝𝙚 𝙙𝙖𝙢𝙖𝙜𝙚 𝙞𝙨 𝙙𝙤𝙣𝙚. 𝗟𝗲𝗮𝗱𝗶𝗻𝗴 𝗜𝗻𝗱𝗶𝗰𝗮𝘁𝗼𝗿𝘀: 𝗠𝗮𝗻𝗮𝗴𝗶𝗻𝗴 𝗖𝗮𝘂𝘀𝗲, 𝗡𝗼𝘁 𝗘𝗳𝗳𝗲𝗰𝘁 Want better results? Focus on the 𝗽𝗿𝗼𝗰𝗲𝘀𝘀, 𝗻𝗼𝘁 𝗷𝘂𝘀𝘁 𝘁𝗵𝗲 𝗼𝘂𝘁𝗰𝗼𝗺𝗲. ✅ First-pass yield (FPY) → 10% FPY improvement = 𝟯𝟬% 𝗹𝗼𝘄𝗲𝗿 𝘀𝗰𝗿𝗮𝗽 ✅ Standard work adherence → 𝟰𝟬% 𝗳𝗲𝘄𝗲𝗿 𝗱𝗲𝗳𝗲𝗰𝘁𝘀 ✅ Preventive maintenance → 𝟭𝟬-𝟮𝟬% 𝗢𝗘𝗘 𝗯𝗼𝗼𝘀𝘁 ✅ Changeover time tracking → 𝟯𝟬% 𝗵𝗶𝗴𝗵𝗲𝗿 𝗼𝘂𝘁𝗽𝘂𝘁 What do these have in common? They measure the 𝗾𝘂𝗮𝗹𝗶𝘁𝘆 𝗼𝗳 𝘄𝗼𝗿𝗸 being done now, 𝗻𝗼𝘁 𝗷𝘂𝘀𝘁 𝘁𝗵𝗲 𝗿𝗲𝘀𝘂𝗹𝘁𝘀. 𝗧𝗵𝗲 𝗦𝗵𝗶𝗳𝘁: 𝗙𝗿𝗼𝗺 𝗥𝗲𝗽𝗼𝗿𝘁𝗶𝗻𝗴 𝘁𝗼 𝗟𝗲𝗮𝗿𝗻𝗶𝗻𝗴 One company I worked with spent every KPI meeting debating scrap and OEE. Every week, a different reason. We flipped the focus: Track leading indicators. Go to the floor. Ask real questions. 🔹 Are operators 𝘧𝘰𝘭𝘭𝘰𝘸𝘪𝘯𝘨 𝘴𝘵𝘢𝘯𝘥𝘢𝘳𝘥 𝘸𝘰𝘳𝘬? 🔹 Are problem-solving 𝘳𝘰𝘶𝘵𝘪𝘯𝘦𝘴 𝘪𝘯 𝘱𝘭𝘢𝘤𝘦? 🔹 Is preventive maintenance 𝘢𝘤𝘵𝘶𝘢𝘭𝘭𝘺 𝘥𝘰𝘯𝘦? Within six months: ✅ Scrap dropped 𝟮𝟱% ✅ OEE increased 𝟭𝟮% ✅ On-time delivery improved 𝟭𝟱% 𝗧𝗵𝗲 𝗥𝗲𝗮𝗹 𝗟𝗲𝘀𝘀𝗼𝗻? 𝗡𝘂𝗺𝗯𝗲𝗿𝘀 𝗱𝗼𝗻’𝘁 𝗶𝗺𝗽𝗿𝗼𝘃𝗲 𝘁𝗵𝗲 𝘄𝗼𝗿𝗸. 𝗙𝗶𝘅 𝘁𝗵𝗲 𝘄𝗼𝗿𝗸, 𝗮𝗻𝗱 𝘁𝗵𝗲 𝗻𝘂𝗺𝗯𝗲𝗿𝘀 𝘄𝗶𝗹𝗹 𝗳𝗼𝗹𝗹𝗼𝘄. If your team spends more time 𝗮𝗻𝗮𝗹𝘆𝘇𝗶𝗻𝗴 𝗿𝗲𝗽𝗼𝗿𝘁𝘀 than improving the process, you’re already 𝘁𝗼𝗼 𝗹𝗮𝘁𝗲. Want better performance? 𝗦𝘁𝗼𝗽 𝗺𝗮𝗻𝗮𝗴𝗶𝗻𝗴 𝘁𝗵𝗿𝗼𝘂𝗴𝗵 𝘁𝗵𝗲 𝗿𝗲𝗮𝗿𝘃𝗶𝗲𝘄 𝗺𝗶𝗿𝗿𝗼𝗿, focus on what’s ahead. What leading indicators have made the biggest difference for you? Let’s discuss. 👇 What leading indicators have made the biggest difference for you? Let’s discuss. #lean #manufacturing #leadership #kpi

I lost $243,000 to due tracking the wrong metrics as COO of an 8-figure agency. Here's why... I was focused on the “typical” lagging metrics: - Revenue - Profit - Churn These are important, but tell you what already happened - by then it's too late to fix anything. It's like driving your car while only looking in the rearview mirror… Here's what smart agency owners track instead: Performance KPIs (1-2): - % of Revenue To Target Process KPIs (3-4): - % On Time Delivery - % Revision Rates - % Error Rates - % On Brand Why this works: → Tracking Leading Metrics shows if you'll hit targets BEFORE you miss them → Early detection stops small issues from becoming big issues → Team aligns around metrics that actually drive results How to track: - Daily meetings: Review deliverables, revisions, and errors - Weekly meetings: Daily meeting metrics + performance trends - Monthly reviews: Weekly meeting metrics + traditional lagging metrics The secret? Stop focusing on what already happened. Start measuring what drives future success. This isn't just about better numbers - it's about building an agency that runs like clockwork. What metrics do you think are important to track?

Observation: Most businesses only look at what’s happened. The best ones can predict what’s next. Yes, lagging indicators like revenue, profit, retention, traffic, and churn matter. But to drive growth and efficiency, it's also important to pay attention to leading indicators. They may be harder to define or measure, but often show trends or behaviors before they result in measurable outcomes. For example: → User engagement: How often are users logging in or using your product? High engagement today often signals better retention.  → Sales pipeline metrics: Metrics like the number of qualified leads or meetings booked are often good predictors of future revenue.  → Employee satisfaction: Engaged employees today lead to higher productivity and lower turnover tomorrow, which drive better outcomes. How to do leading indicators?  1. Define clear goals: Link every metric to the business outcomes you want to achieve. Leading indicators signal you’re on track and give you time to adjust course. 2. Identify actionable metrics: Focus only on metrics your team can directly influence through immediate action and intervention. 3. Regularly reassess: Market dynamics can make yesterday's metrics irrelevant. Set a quarterly cadence to evaluate if your leading indicators are still relevant. It's not one or the other- it's a balancing act. Together, they provide a robust performance framework, enabling both reactive (lagging) and proactive (leading) decision-making.

📌 How to Select the Right Dashboard KPIs (What you need to know) In today’s digital age, data has become the lifeblood of business strategy. From SMBs to Fortune 500s, companies are rushing to capitalize on their collected data. Boards and investors are pushing for data-driven approaches to stay competitive in rapidly evolving markets. Business intelligence is no longer optional and dashboards are more critical than ever. We’re talking about tracking Key Performance Indicators (KPIs) to make better decisions. But the truth is… Most dashboards fail before they even get built. Why? Because they’re tracking the wrong KPIs. Let’s break this down: Anyone can Google “Top 10 KPIs for marketing” or “Sales dashboard metrics” But effective KPIs are not copied and pasted. They’re designed based on your business model, decision points, and goals. This is something closely tied to your business context. So how do you actually choose KPIs that drive impact? Here’s a 4-step framework: 1️⃣ 𝐒𝐭𝐚𝐫𝐭 𝐟𝐫𝐨𝐦 𝐭𝐡𝐞 𝐃𝐞𝐜𝐢𝐬𝐢𝐨𝐧, 𝐍𝐨𝐭 𝐭𝐡𝐞 𝐃𝐚𝐭𝐚 Before looking at any numbers, ask: → What decisions do we need to make faster? → What outcomes are we trying to improve? KPIs are not about monitoring everything. They’re about enabling better decisions. If you’re not clear on the decision, the KPI is just noise. 2️⃣ 𝐌𝐚𝐩 𝐊𝐏𝐈𝐬 𝐭𝐨 𝐁𝐮𝐬𝐢𝐧𝐞𝐬𝐬 𝐎𝐛𝐣𝐞𝐜𝐭𝐢𝐯𝐞𝐬 Each KPI should directly tie to a strategic goal. Examples: → Sales conversion rate → revenue growth → Customer retention rate → long-term profitability → Cost per lead → marketing efficiency Ask yourself: If this metric improves, will the business benefit? If the answer is no, it’s not a key performance indicator. It’s just a metric. 3️⃣ 𝐁𝐚𝐥𝐚𝐧𝐜𝐞 𝐋𝐞𝐚𝐝𝐢𝐧𝐠 𝐯𝐬 𝐋𝐚𝐠𝐠𝐢𝐧𝐠 𝐈𝐧𝐝𝐢𝐜𝐚𝐭𝐨𝐫𝐬 Lagging KPIs show outcomes. (e.g. total revenue, churn rate) Leading KPIs show input signals. (e.g. pipeline volume, support tickets opened) You need both. Lagging tells you what happened. Leading helps you influence what will happen. Too many dashboards focus only on the past. 4️⃣ 𝐃𝐨𝐧’𝐭 𝐎𝐯𝐞𝐫𝐥𝐨𝐚𝐝 More KPIs ≠ more insight. It usually leads to analysis paralysis. Focus on the 5–7 metrics that truly matter. Kill vanity metrics. (Yes, that includes “likes” and “bounce rates” if they don’t drive decisions.) If you remember one thing today: A good KPI is… ☑ Actionable: You know what to do if it changes ☑ Owned: Someone is responsible for improving it ☑ Contextual: You can compare it (vs. target, vs. last month, etc.) -- 💡 I shared a few months ago a KPI Handbook to help you speed up your KPI selection. If you still haven’t checked it out, here’s the link: https://lnkd.in/e-TzyAkS #BusinessIntelligence #DataAnalytics #DecisionMaking

Most leaders are driving their business while staring in the rearview mirror. They obsess over revenue, profit margins, and delivery rates. All lagging indicators that tell you what already happened. But here's what changed everything for one of my clients: We identified that 500+ estimates and 600+ orders per month consistently led to $1.5M in revenue. Two weeks into the next month, we noticed they'd only hit 60 estimates per week instead of their usual 125, and 130 orders instead of their usual 150. Red flag. We deployed additional outbound resources immediately. Crisis averted. A month that could have been 60% of plan turned into 93% of plan. That's the difference between leading and lagging indicators. Lagging = what already happened (revenue, profit, delivery rates) Leading = what predicts the future (estimate volume, order mix, complaint rates, defect percentages) You need both. Lagging indicators tell you if you won or lost. Leading indicators tell you if you're about to. Think of it this way: You can't back out of your driveway without a rearview mirror. But you'd never drive through a busy intersection looking backwards. Your business works the same way. What's one leading indicator you could start tracking today that would predict your most important lagging metric?

Leading vs lagging indicators...what on earth are we talking about?? If you are not sure, read this. Most workplaces track what’s easiest to measure: 🔸 revenue 🔸 on-time delivery 🔸 customer complaints etc. Those are 'lagging indicators'. They’re the result of choices already made. 'Leading indicators' are the things that indicate what the results will be like: 🔸 preventative maintenance done on time 🔸 rework / repeat defects 🔸 near misses 🔸 spikes in absence etc. If you mainly manage lagging indicators, you’re managing history. You will notice a lot of time spent in meetings explaining what happened... Leading indicators are where learning starts. When we have them and use them, they trigger really useful conversation like: 💡 What is slipping?” 💡 What is going well and how will we recognize that? 💡 What patterns are we seeing? 💡 What do we need to adjust to get back on track? Essentially, you’re exploring cause and effect while the “cause” is still visible. Take a look at the chart below- it's a construction industry example. Notice how every KPI has a set of leading indicators beside it- I assure you it is entirely possible to find the early-warning, controllable stuff that drives the final result. (BTW, I have indicator charts for other industries I have worked in so feel free to send me a message if you want one for your specific industry) Note that companies don't use ALL these indicators- they choose the ones that are most important for them to work on right now. Are you familiar with leading indicators? Which ones do you use in your company? Share your experience below 🙏