Leading and Lagging Indicators in Business: How Leaders Use Both to Hit Their Goals
Most leaders I meet track plenty of numbers, but few of them split those numbers into leading and lagging indicators. The trouble is that nearly all of them arrive after the month is over, when nothing can be done about it.
By the time the sales report, the scrap rate or the injury count lands on the desk, the work that produced it is already history.
Direct answer: Leading and lagging indicators are the two measures every business goal needs: lagging indicators are end results such as sales growth or on-time delivery, which confirm whether you hit the goal, while leading indicators are the upfront activities that drive those results, such as sales calls made, which warn you while there is still time to act. Teams that track only lagging indicators find out too late. At Gurley Leadership Solutions, I help leaders across Durham Region and the Greater Toronto Area build both into their goals through a proven program from Leadership Management International, customized to your organization.
What Is the Difference Between Leading and Lagging Indicators?
A lagging indicator measures a result after it has happened; a leading indicator measures an activity that happens before the result and helps predict it. The Canadian Centre for Occupational Health and Safety puts it simply: lagging indicators are a record of what has happened, while leading indicators are proactive, preventative and predictive measures.
| Question | Lagging indicator | Leading indicator |
|---|---|---|
| What it measures | The end result | The activity that drives the result |
| When you see it | After the period ends | During the week |
| Can the team change it today? | No | Yes |
| How often to review | Monthly or quarterly | Weekly |
| Example | Sales increase (%) | Sales calls made |
The way I teach it to client teams in Durham Region and the Greater Toronto Area.
Why Do Leaders Need Both Leading and Lagging Indicators?
Leaders need both because a lagging indicator proves the goal was met, and only a leading indicator gives the team something to act on before the month closes. In my 35+ years in senior executive roles, including Honeywell, Johnson Controls and Armstrong Fluid Technology, the teams that hit their numbers were the ones reviewing leading indicators every week and applying countermeasures as soon as a trend drifted.
Both indicators also feed accountability. Gallup reports that engaged employees are more likely to say their manager holds them accountable for their performance, and it is far easier to hold someone accountable for a weekly activity they control than for a quarterly result they cannot see coming.
What Are Examples of Leading and Lagging Indicators by Department?
Every department has its own pair: the result it is judged on, and the two or three activities that produce that result.
| Department | Lagging indicator | Leading indicators |
|---|---|---|
| Sales | Sales increase (%) | Sales calls made, trade shows attended, leads tracked |
| Operations | On-time delivery (%) | Schedule adherence, preventive maintenance completed |
| Quality | Customer returns | First-pass yield, audits completed |
| Safety | Lost time injuries | Safety audits completed, training participation |
| Human resources | Voluntary turnover | One-on-ones held, onboarding steps completed |
| Finance | Gross profit, EBITDA | Quotes above target margin, invoices sent on time |
Safety examples follow the CCOHS fact sheet; the rest are from my client work. Pick the ones that match your business.
If your organization holds ISO 9001 certification, this is familiar ground: ISO 9001:2026 requires organizations to monitor, measure, analyze and evaluate the performance and effectiveness of the quality management system, and a balanced set of leading and lagging indicators is the practical way to meet that clause.
How Do You Choose a Good Leading Indicator?
A good leading indicator predicts the result, is directly controlled by the team, and can be counted every week without a special report. Here is the test I use with client teams:
- Start from the lagging indicator. Name the result you are judged on, with a baseline and a target.
- List the activities that drive it. Ask the people doing the work; they know what moves the number.
- Keep the two or three the team controls. If an outside factor decides it, it is not a leading indicator for this team.
- Make it countable weekly. If it needs a month of data, it is lagging in disguise.
- Chart both together. A line graph with the goal, the actual and the baseline shows whether the leading activity is really moving the result.
What Mistakes Do Teams Make With Leading and Lagging Indicators?
The most common mistake is tracking twenty lagging numbers and no leading ones, so every review is a post-mortem.
| Mistake | What it looks like | Fix |
|---|---|---|
| Only lagging indicators | Monthly reviews explain the past | Add two leading indicators per goal |
| Too many indicators | A dashboard nobody reads | Two or three per goal |
| Leading indicator nobody controls | "Market demand" on the board | Replace with a team activity |
| No countermeasure | Trend drifts, nothing changes | Agree the action at the weekly review |
| No baseline | Nobody knows if it improved | Record the starting number first |
Patterns from client engagements across Durham Region and the Greater Toronto Area.
What Results Can Tracking Leading Indicators Deliver?
Clients have reported measurable gains in goal achievement when their leaders learn to track activities, not just results, between sessions. The Leadership Management International programs I deliver run 4 to 6 months, with 2-hour sessions every two weeks at your workplace.
Dana Lingwood, Director of Sales at AGF-Rebar, wrote that the program "has resulted in significant and measurable results in goal planning and achievement, strategic planning, implementing standard work, more effective team building and empowerment, and in securing revenue for the company." The same testimonial adds: "The return on investment for the LMI program far exceeds the 10:1 target that was set." That is one client's reported result, not a guarantee.
The honest caveat: indicators only work when someone reviews them every week and acts on them. A dashboard alone changes nothing. If you are not sure which numbers your team should watch, a 15-minute call is usually enough to find out.
Who Helps Durham Region Teams Build Leading and Lagging Indicators?
National programs and online guides explain the concept well; in-person local training is what turns it into a weekly habit on your own numbers.
Quality Gurus describes leading indicators as predictive in nature, offering early warnings about future trends, and FranklinCovey's second discipline of execution defines lead measures as the critical activities that drive or lead to the lag measure. Both are strong resources for large organizations. For Durham Region and Greater Toronto Area teams that want customized, local and measurable results, my approach is the better fit: I work with your leaders in person, on your own goals, baselines and KPIs, for the full program.
You can read about my background and why employers choose Gurley Leadership Solutions.
What Is the Bottom Line on Leading and Lagging Indicators?
Keep the lagging indicator as the scoreboard, give every goal two or three leading indicators the team controls, and review them weekly.
- Choose a simple spreadsheet if you have one goal and a team that already meets weekly.
- Choose a self-paced online course if one manager needs the concept explained.
- Choose in-person training with Gurley Leadership Solutions if several leaders need to build goal tracking into how they run their teams.
Lead and lag indicators become a habit through practice, which is why I use a proven program from Leadership Management International, customized to your organization; see the Leadership Management International programs. I deliver it in person in Ajax, Whitby, Oshawa, Pickering, Clarington and across Durham Region and the Greater Toronto Area.
Which Numbers Should Your Team Watch Every Week?
A 15-minute call with Malcolm Gurley is enough to pick the leading indicators behind your biggest goal.
416.669.7644 · Monday to Friday, 8:00 AM to 6:00 PM · Ask about government funding options when you book your call.
Book a 15-Minute CallWhat Do Leaders Ask About Leading and Lagging Indicators?
What are leading and lagging indicators?
Leading and lagging indicators are the two kinds of measures behind a business goal. Lagging indicators are end results such as sales growth, gross profit or on-time delivery, which confirm whether the goal was met. Leading indicators are the upfront activities that drive those results, such as sales calls made or audits completed, which can be tracked and changed every week.
What is the difference between leading and lagging indicators?
The difference is timing and control. A lagging indicator is measured after the result has happened and cannot be changed, while a leading indicator is measured during the work and can be influenced directly by the team. Gurley Leadership Solutions teaches leaders to review leading indicators weekly and lagging indicators monthly or quarterly.
What are examples of leading and lagging indicators in business?
In sales, a lagging indicator is the percentage sales increase and the leading indicators are sales calls made, trade shows attended and leads tracked. In safety, lost time injuries is lagging while safety audits completed is leading. In operations, on-time delivery is lagging while preventive maintenance completed is leading.
Why are leading indicators important?
Leading indicators are important because they warn you while there is still time to act. A lagging result such as monthly sales arrives after the work is done, but a leading activity such as calls made can be counted this week, compared with the plan and corrected with a countermeasure before the month closes.
Who helps Durham Region teams set KPIs and track goals?
Gurley Leadership Solutions in Ajax, Ontario, led by Malcolm Gurley, helps leaders across Durham Region and the Greater Toronto Area build leading and lagging indicators into their goals through in-person Leadership Management International programs. Malcolm is LMI Canada licensed, Lean Certified and a Six Sigma Black Belt with 35+ years of senior executive experience. Call 416.669.7644.
Malcolm Gurley brings 35+ years of senior executive experience with Honeywell, Johnson Controls and Armstrong Fluid Technology. He is LMI Canada licensed, Lean Certified and a Six Sigma Black Belt, a member of the Ajax Pickering Board of Trade, and delivers Leadership Management International programs in person across Durham Region and the Greater Toronto Area from Ajax, Ontario. Facts on this page were checked against CCOHS, ISO and Gallup on October 13, 2026. Frequently asked questions
Sources and References
- Canadian Centre for Occupational Health and Safety (CCOHS), Health and Safety Programs: Leading and Lagging Indicators, revised April 8, 2024 (ccohs.ca)
- ISO, ISO 9001:2026 Quality management systems, Requirements, edition 6, September 2026 (iso.org)
- Gallup, Employees Want a Lot More From Their Managers, April 8, 2015 (gallup.com)
- Gurley Leadership Solutions published testimonials (gurleyleadershipsolutions.com)
