Leading and Lagging Indicators

A lagging indicator is a result. Bookings, quota attainment, win rate, churn. By the time you can read it, the work that produced it is finished, and so is your chance to change it. A leading indicator is something that happens earlier and predicts the lagging one. Economic Buyer meetings held. Champions who have passed the test. Metrics agreed in the customer’s words. Discovery calls where the consequence of doing nothing was named. Pipeline created from accounts you chose rather than accounts that found you.

The question they answer: what should I be looking at today to know what the quarter will look like in ninety days?

The mistake is running the team on the lagging number. Every sales leader has a dashboard with attainment at the top, and most coaching conversations start there. “You are at 40%.” The rep already knew. You cannot coach a lagging indicator. The number is a verdict on decisions made two months ago, and no amount of talking about it changes a single one of them. Leaders who manage this way end up shouting at the scoreboard.

How I use it. I pick a small number of leading indicators that I know produce the result, and I inspect those relentlessly. For most teams I have led, that meant the quality of MEDDPICC on the top deals, the number of Economic Buyer conversations in a month, and how much new pipeline carried a real Champion. Coach those and the lagging number follows, with a lag you can predict. Ignore them and the quarter will tell you how it went, long after you could have done anything about it.