What are 'leading' and 'lagging' indicators in process performance?

Leading indicators are metrics that help in predicting future performance, by providing insights that allow for proactive measures to be taken. These indicators often consist of activities or processes that can influence the outcomes you wish to achieve, enabling organizations to make informed decisions and adjustments before an outcome is finalized.

In contrast, lagging indicators measure past performance and reflect how well a process has performed based on historical data. They help organizations understand the results of previous actions but do not offer guidance on future performance.

This distinction is crucial for effective process management and continuous improvement, as leading indicators can guide initiatives towards achieving desired outcomes, while lagging indicators serve to assess the effectiveness of those initiatives after the fact. Thus, the correct answer highlights the predictive quality of leading indicators and the retrospective nature of lagging indicators, underscoring their roles in a performance measurement framework.