Thursday, September 21, 2023

Confusion Around Leading and Lagging Metrics


The confusion with leading and lagging metrics stems from the fact that we cannot truly make a list of metrics that fall into each category. Some people think you can but it depends on your perspective. What is leading Key Performance Indicator (KPI) to one level of the organization can be lagging KPI to another. Thats right, many metrics or KPIs are actually both leading and lagging. As an example, in the operations and maintenance world, preventative maintenance (PM) completion (which measures the percent of scheduled PM task done when scheduled) is a good example of this confusing element. If you are an operations leader you might call it a leading indicator of equipment reliability. In other words, if I am doing my PMs on time then I should expect reliable equipment. ...But if I am a Maintenace Supervisor then it is a lagging metric or KPI that shows that we did the work that was scheduled. 

As you are selecting metrics another way you can look at them is by using "Behavior and Result." Does this metric drive a behavior, or does it measure a result? My opinion is if you want to drive behavioral change you want to measure things that drive that specific change. You may find that you measure them often maybe even daily or weekly whereas results type metrics you measure monthly or less often to make sure you are getting what you want from the process. 

What are your thoughts?