What Lead & Lag Indicators Are + How They Improve Your Goals

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I’ve been setting goals for over 17 years, but in the last couple of years I’ve discovered something that’s skyrocketed my success rate with achieving goals. They’re called lead and lag indicators, and today we’re going over what they are and how they make goal setting so much easier. 

Lead and lag indicators are ways to measure your goals. A lead indicator is any action you take to accomplish your goals. Going for a run, making sales calls, and tracking meals are all examples of lead indicators. Lag indicators are the results that lag behind your efforts. These are the outcomes of your efforts like the amount of weight you’ve lost or the money you’ve made.

We’re about to dive into these two simple tools for goal-setting that will make you a master at setting goals. But first, let’s get a deeper understanding of them with some word math.

Word Math

From our Google definitions for our key terms here we have:

Lead: cause (a person or animal) to go with one by holding them by the hand, a halter, a rope, etc. while moving forward.

Lag: a period of time between one event or phenomenon and another.

Indicators: a thing, especially a trend or fact, that indicates the state or level of something, a gauge or meter.

So for Lead Indicators, we get:

A gauge or meter, especially a trend or fact, that indicates the state or level of the cause of something moving forward.

And to simplify that for better understanding by re-writing it:

Gauging the trends and levels of what moves you forward toward your goals.

And now for Lag Indicators, with some words I’ve added for clarity we get:

A gauge or meter, especially a trend or fact, that indicates the progress of something after a period of time between one event or phenomenon and another.

And to simplify that for even better understanding by re-writing it:

Gauging the progress of something after a period of time since actions to make that thing happen have been performed.

In other words, lead indicators gauge the status of your efforts to move forward, or your actions. Lag indicators, on the other hand, gauge the progress you’ve made after you’ve completed those actions.

What Are Lag Indicators?

When you set a goal, it’s most often something like “I want to run three times a week.” But did you ever stop to consider why you want to do this?

Let alone the fact that running might not be the best health goal to set, you also haven’t even identified the deeper purpose behind your exercise goal.

Do you want to lose weight or body fat? Or just stay healthy? Take a few moments to write about why you want to complete your initial goal and you can easily discover the answer.

Once you have it, you can use that answer to begin formulating your lag indicator. In most cases, you can tie a number to it. The easiest example is weight loss, like the goal of losing 12 pounds that I have right now. 

I cannot go out and perform the action of “losing a pound.” That’s because losing weight is not an action but a result of other actions that affect its outcome. 

The best time to track lag indicators is weekly. If I want to lose 12 pounds, for example, my weekly lag indicator will be losing just one pound. If I do that each week, I’ll hit my goal of losing 12 pounds in total.

Here are some examples of lag indicators that I’ve used:

  • Did my family time bring us closer?
  • How has the traffic to my website improved?
  • Did I get a new client?
  • Did I lose 1 pound?

As you can see, some of your indicators will be difficult to tie a number to, like how close you’re becoming with your family. These are still important to track, however.

Now that you’ve got your lag indicator figured out, it’s time to get to know lead indicators better and how they’ll help you accomplish your goals.

What Are Lead Indicators?

“Ultimately, you have greater control over your actions than over your results. Your results are created by your actions. An execution measure indicates whether you did the things you said were most important to achieving your goals.”

– Brain Moran and Michael Lennington, The 12 Week Year

Many times, you set goals that are already lag indicators and simply need to find the lead indicators, or action steps, that will get you that outcome. 

One of the most common goals is to lose weight. Setting a target amount to lose is a lag indicator, but you still need to plan what you’ll do to accomplish that goal. Like we’ve already identified, “losing a pound” is not an action.

I’m trying to lose weight right now in an effort to get to more important goals, and here are my lead indicators to help me get there:

  • Track all meals in MyFitnessPal
  • Run, rollerblade, or bike every day for 30 minutes
  • Get to bed at 10:30 pm and wake up at 6:30 am

These are the actions I will focus on and track because I know that they will lead to me accomplishing my objectives. 

At the end of each day and week, I can see whether or not I did them. And knowing the answer to that question each day tells me how likely I am to lose weight or not. 

This feedback you get is just one reason why lead and lag indicators are so powerful. You can see where you’ve failed to execute and adjust accordingly. 

Think of your lag indicators as your actual goals and your lead indicators as your plan of what you’re going to do each day to reach them.

Using Lead and Lag Indicators to set SMART Goals

Now that we know the difference between these two, we can see what they have to do with making your goals SMART. Here’s what SMART stands for:

  • Specific
  • Measurable
  • Attainable
  • Realistic
  • Time-Bound

Trying to make your goals all five of these things from the start feels overwhelming, right? But if you understand how to use lead and lag indicators, you can set SMART goals with less than half the effort!

It takes only two steps to establish a good lead indicator and a good lag indicator if you use this system from the start. If you only try to use the SMART method, that’s five steps and more than double the work!

Using our weight loss example from above, you set the goal, or lag indicator, of losing 12 pounds in 12 weeks and thus losing one pound a week. Then say your daily lead indicator is just exercising for 30 minutes.

Here’s where the magic begins. Let’s see how many of the five components of SMART goals we check off with this simple system:

  • Specific: you’re losing one pound a week by doing 30 minutes of exercise per day. You can’t get any more specific than that.
  • Measurable: Did you exercise 30 minutes a day? Did you lose one pound a week? This seems perfectly measurable to me!
  • Attainable: By tracking this goal with lead and lag indicators,  you’ll get data on whether or not it’s too much for you. Then, you can update your weekly and quarterly goal to be more attainable.
  • Realistic: Do you have the means to exercise 30 minutes a day? Is losing one pound a week unhealthy? These are both very realistic objectives.
  • Time-Bound: The terms “week” and “30 minutes” indicate this goal is indeed, time-bound!

Let’s Wrap Up

“Our goals should serve as markers, measurements of the progress we make in pursuit of something greater than ourselves.”

– Simon Sinek, author of Start With Why

By asking yourself these two simple questions, you can make your goal SMART with half the effort:

  • What is my actual goal, the result I want to achieve?
  • What are the most important actions that will get me that result?

I’ve been setting goals for over 15 years but only using lead and lag indicators for the last year and I can tell you from experience that there is a dramatic difference between goals without this method and those that do implement it. 

By using this system I’ve become more likely to accomplish my goals, better at identifying when I need to change a goal, and feel confident that I can change anything I want to about myself.

And I’m certain that by following this same pattern, you will have these same benefits as well.

If you want a template of the system I use to create and track my own, get the Goal Engineering Starter Kit below!