Original post was written on Medium
Recently, I read an article in French, which has popped up the question of leading vs lagging indicators.
Most people nod knowingly when you talk about leading indicators, but actually, few understand them.
What Are Leading and Lagging Indicators?
Lagging indicators quantify current conditions. Leading indicators provide insight into the future.
Lagging indicators are typical “output” oriented. They are easy to measure but tough to improve or influence.
A lagging indicator is one that usually follows an event. The importance of a lagging indicator is its ability to confirm that a pattern is occurring.
In about the pandemic, downstream indicators relate to the hospital situation, such as the number of hospitalized patients and those admitted to intensive care. Finally, the publication of the number of deaths constitutes the ultimate clinical marker for monitoring the epidemic.
Leading indicators are a way of measuring things today with a level of confidence that we’re going in the right direction and that our target is still desirable, viable, and feasible. They are in-process measures that we think will correlate to successful outcomes later. In essence, they help us predict the future and therefore focus more on the input.
These indicators are easier to influence but hard(er) to measure. I say harder because you have to put processes and tools in place to measure them. You can use the leading indicators to make changes to your behavior or environment while there is still time.
In the article about COVID-19, they mention upstream indicators, we can group together the earliest markers with viral detection in wastewater and the number of cases detected positive which are published every day.
If you use leading indicators, you can see if you’re tracking in the right direction. You can use the leading indicators to make changes to your behavior or environment while there is still time.
In an Agile development team, your goal is to meet the release commitment you made to your customers.
The outcome is easy to measure, you either finished the items you committed to or not. But how do you impact the outcome? What are the activities you must undertake to achieve the desired outcome?
The number of leading indicators could for example be:
Ensure a decent number of Ready Backlog items to avoid the team to start working on something which is not ready.
Ensure that the capacity of the team is there and not dedicated to other commitments.
Track the velocity deviation against the mean, the number of outstanding bugs, or known blocking issues.
If you are working using Kanban, you could check the Service level expectation, let’s say that you have a swimlane for the incidents, you could decide to resolve critical priority incidents in 48 hours.
So, you could track the number of incidents that have not been tackled after 2h00. The number of incidents that are older than 1 day, the number of re-open items.
Unfortunately, lagging indicators are often prioritized over leading indicators, even when the leading indicators would be much more useful for understanding and improving performance.