Lagging Indicator

A Lagging Indicator is a metric that measures outcomes that have already happened. Unlike leading indicators (which predict future results), lagging indicators confirm whether past efforts were successful. They're the "bottom line" metrics that ultimately matter.

In OKR practice, most Key Results are lagging indicators: "Revenue grew by 20%," "Customer retention increased to 95%," "Reduced churn from 3% to 2%." These outcomes are the result of many contributing actions and factors. You can't directly make revenue grow — you can only do things (improve product, reach more customers, increase prices) that you believe will lead to revenue growth.

The challenge with lagging indicators is that by the time they move, it may be too late to change course for the current cycle. This is why pairing lagging indicators with leading indicators is powerful. Monitor your leading indicators (daily actions, inputs you control) and check your lagging indicators at each check-in to see if the inputs are producing the expected outputs. If leading indicators are strong but lagging indicators aren't moving, it's time to revisit your assumptions about what drives the outcome.