Analysis
Lagging indicator
Also called outcome metric.
Lagging indicator is a measure that confirms what has already happened, such as revenue or cancellations. It is reliable and late.
How it is measured
Lagging indicators are usually outcomes with a delay built in: money received, accounts closed, or refunds. They are counted after the event, so the value reflects decisions made weeks earlier.
Measure the lag explicitly. Note how long after a change you can expect the outcome to show up, and plan reviews around that delay.
Worked example
A furniture maker watches monthly revenue. A faulty checkout step ships on August 4 and cuts completed orders by a fifth. August revenue still looks acceptable because of old backorders.
September revenue falls 19 percent and September 12 is the first day anyone checks. If the maker had also watched daily checkout starts, the problem would have shown in the first week.
How it differs
A lagging indicator reports outcomes after they occur. A leading indicator moves ahead of them. Lagging figures settle disputes; leading ones give you time to act.
Common errors
Steering by revenue alone. Reacting to one month. Blaming the most recent change for an old problem. Expecting weekly movement from a quarterly metric. Ignoring refunds.
In practice
For each outcome you track, list one earlier signal and the delay between them. Review the outcome monthly. Do not change course on a single lagging reading.