Leading and lagging indicators help enterprise leaders understand business conditions and trends. They are metrics that inform managers that they are on track to meet their organizational goals and objectives.

A leading indicator is a predictive measurement; e.g. the percentage of people wearing hard hats on a building site is a leading safety indicator. A lagging indicator is an output measurement; e.g. the number of accidents on a building site is a lagging safety indicator.

The difference between the two is that a leading indicator can influence change whereas a lagging indicator can only record what has already happened.

The balanced set of Leading and Lagging indicators is essential for the effective monitoring of an organization’s performance.

The set of Lagging indicators is easier because they represent the output of the processes that are usually easy to detect (e.g. number of defective products, number of accidents, etc.). Usually, they cover the monitor and check phase of the processes.

The set of Leading indicators is more complicated as it requires the deep analysis of the processes. Leading indicators may include the development of training programs, the effectiveness of action plans, indexes concerning the consultation and the participation of workers in QHSE issues etc.. They cover the phase of prevention and proactiveness of the processes.

Process Engineering may support efficiently your organization on setting leading and lagging indicators by:

• Analyzing processes.
• Modeling your organization’s processes using adjusted special management tools (e.g. BPMN).
• Assessing Risks – Risk Management.
• Setting the appropriate lagging and leading indicators based on the Analysis of the processes and the Risk Management.
• Developing and prioritizing action plans.
• Integrating the results in the monitoring processes of your Management Systems.

Process Engineering can support you in delivering new Management Systems approaches using up-to-date Management Tools in order to minimize risk, manage growth and support your existing business strategies.

For more information please contact the technical department of Process Engineering.