What Are Leading and Lagging KPIs?

Leading KPIs (Key Performance Indicators) are measurable factors that indicate a business may start to follow a certain trend. Analysts use leading KPIs to predict future trends or patterns. An example for a leading KPI would be sales pipeline growth, which is usually considered to be a KPI of sales. Leading KPIs are not considered reliable, because the predicted outcome usually depends on more than one factor.

Lagging KPIs are past measurements that are used to record the performance of a company. They include annual sales, annual sales growth, annual net income, annual net income growth, gross margin, etc. Lagging KPIs are true indicators of the state of the company because they are based on measurable performance.