Lagging and leading indicators
I've confusion about the concept of lagging and leading regarding indicators. I know Cycle time is a lagging indicator, it's known when the element is ended. Work item age is leading indicator, you can know how is respect the average of the cycle.
Is it WIP leading indicator similar to work item age?, but Are throughtput and service level expectation lagging indicator as Cycle Time?
There's a good explanation of these within the EBM Guide if you'd like to check that out.
Throughput could fall under a leading / lagging depending on how often you're measuring it and what you're using the data for. If I'm looking backwards to determine my average throughput it becomes a lagging indicator. If I'm looking at my throughput each day it becomes a leading.
I wouldn't have typically thought of an SLE as an indicator in and of itself. Perhaps the ratio in which you meet a given SLE could become leading or lagging.
Is it WIP leading indicator similar to work item age?
How do you measure it? If you can see inside to count WIP, it will be a leading indicator, since there is no delay. If you have to apply Little’s Law then the measurement will lag.
Thanks Tony and Ian. I¡ve got some ideas from your comments.
Indicators always relate to some event.
Being a Leading or Lagging will depend on the event that it indicates.
- So, if we measure something that indicates an event that will occur in the future, We call this measure a Leading Indicator.
- On the other hand, if that measure confirms something that already happened in the past, we will call it a Lagging Indicator.
That's the reason the same measure, can be classified as a Leading Indicator for one thing and a Lagging Indicator for another thing.
Still confused. I agree with Mauricio. An indicator is a measurement of something happened in the past. Some indicators set expectations for the (near) future. Only those are leading indicators.
In other words, you may say, “Some results from the past set expectations for the future”. In investment context, the saying goes, “Past performance is no guarantee of future results.” With leading indicators you may say, “Past performance can set expectations for future results.”
This is why I consider (average) cycle time a leading indicator: if items take 5 days on average to travel from start to finish, my guess is that near future items will also take 5 days on average, right?
Am I missing something?
Hello everyone, very interesting discussion, however I would like to add an additional aspect to it, and it is about the usefulness of knowing if an indicator is "leading indicator" or "lagging indicator", I think that the very discussion of it, already means a waste; something similar happens to me with BPM approaches, we talk about performance indicators, activity indicators, etc.; however in practical terms, what value brings us the classification of indicators, or adjust to some pre-established terminology?
I will appreciate your answers,
Thanks in advance