Analysis
Leading indicator
Also called early signal.
Leading indicator is a measure that moves before the outcome you care about. It gives you a window to act while there is still time.
How it is measured
You find one by looking back over history for an early metric whose changes preceded the outcome by a consistent lag. Examples include trial activations before paid plans, or quote requests before closed jobs.
Test it against a few past periods and check that the order and lag hold. A signal that sometimes leads and sometimes trails is noise.
Worked example
A solar installer notices that 'roof-size calculator completions' rise about three weeks before signed contracts. In June the calculator completions fall from 210 a week to 140.
The team adds a follow-up call script and spends a week fixing a broken map widget. Contracts in early July slip only 8 percent instead of the 33 percent the old ratio would have predicted.
How it differs
A leading indicator gives early warning. A lagging indicator confirms results. The first can mislead if the link breaks; the second cannot, but arrives too late to change things.
Common errors
Assuming a link without testing it. Choosing a signal that is easy to move but not tied to the result. Using a long lag as if it were short. Acting on one week. Ignoring that the link shifts with seasons.
In practice
Choose one early signal for your main outcome and confirm the lag from at least six months of data. Put both on the same chart and review them together.