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Understanding indicators: Leading and Lagging

Ana Aranda Diaz

Ana Aranda Diaz

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Project management in the Information Technology (IT) industry requires careful monitoring and evaluation of project progress and performance. Leading (“Anticipated”) and Lagging (also known as “Stragglers”, or “Retrospective”) indicators are two types of key performance indicators (KPIs) that play a crucial role in assessing project success. In this article, we will explore these concepts, trying to provide practical examples of each, highlighting the benefits of using each type in IT projects.

As Peter Drucker said “Measurement is the key to making informed decisions. Without relevant quantitative data and metrics, decisions are just guesswork.” The intention of this article is to shed some light on this topic, and create awareness on the importance of using KPIs, determining at each moment which type of indicator is more appropriate and how to use them.

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Understanding indicators: Leading and Lagging | Illustration by Andy Baraja

What are the Leading Indicators?

Leading indicators are proactive measures that provide early information on the progress and potential results of a project. They are predictive in nature, allowing project managers and the team to anticipate future success, or risks. These indicators typically focus on activities and inputs that measure how well projects are progressing. By monitoring these metrics, the team can forecast results, anticipate outcomes, and take data-driven corrective actions that promote project success

Examples of Leading Indicators in IT Projects:

  1. Requirements Coverage: Percentage of documented and validated project requirements.
  2. Team Velocity: Average number of story points or tasks completed by the development team per iteration. In the early stages of a project, a steady increase in delivery velocity may indicate an improvement in the team’s efficiency and ability to meet deadlines. But over time, the team’s velocity tends to plateau and we must watch for a decline. It is important to have in mind that the speed is very linked to the stability of the equipment.
  3. Stakeholder satisfaction: Feedback and satisfaction levels of all stakeholders involved in meeting project milestones. Measuring the degree to which the project is meeting the established milestones (which may be related to specific milestones, key deliverables, or fulfillment of important requirements) will provide useful information on the progress of the project.
  4. Resource Utilization: Measurement of resource allocation and use in project activities.
  5. Risk Mitigation Activities: Progress made in implementing risk mitigation plans and actions.
  6. Staff Turnover Rate: Measures the rate of staff turnover in the project team. High turnover may be a sign of leadership problems, negative work climate or lack of motivation.
  7. Team workload level: In Kanban, for example, the board allows you to quickly see the amount of work in progress. The greater the number of tasks, the greater the dispersion of the team’s attention and the greater the context switching. We must limit the workload of the team to reduce delivery times and ensure a high level of quality.

What are the benefits of Leading Indicators?

1. Early Identification of Problems:

These indicators allow early detection of potential problems or risks, which helps project managers to take proactive measures to mitigate them before they affect project results.

2. Correction of the course of a project in real time:

By monitoring the leading indicators, the team can make timely adjustments to plans, resource allocation and specific activities to support project success.

3. Better Decision Making:

They provide valuable information about the future trajectory of the project, enabling project managers to make data-driven decisions that optimize results.

4. Improved Stakeholder Engagement:

These indicators facilitate better communication with stakeholders by providing visibility into project progress, ensuring that their needs and expectations are met.

What are Lagging Indicators?

These are retrospective measures that assess the results and achievements of completed project activities. They provide a snapshot of past performance, focusing on the deliverables and objectives achieved. These indicators help evaluate the overall success of a project and identify areas for improvement in future projects.

indicators
Understanding indicators: Leading and Lagging | Illustration by Andy Baraja

Examples of Lagging Indicators in IT Projects:

  1. Schedule variance: Actual project completion time compared to the planned schedule.
  2. Budget Variance: Actual project costs compared to the allocated budget.
  3. Quality Metrics: Evaluation of the quality of the delivered product based on predefined criteria and customer feedback (number of reported issues, software quality metrics, etc.).
  4. Customer Satisfaction: Post-project surveys or feedback from end users on their satisfaction with the final product. A low level of customer satisfaction may indicate that there were problems in the quality, functionality or compliance with product requirements. The Net Promoter Score (NPS) is an example, and allows us to measure customer loyalty.
  5. Delivery of value to customers and users: Evaluation of the project’s impact on the organization’s strategic objectives and return on investment.

Benefits of the Lagging Indicators:

1. Post-Project Evaluation:

Lagging indicators help to evaluate the overall success of completed projects, allowing the identification of strengths, weaknesses and areas for improvement.

2. Performance Measurement:

These indicators provide tangible metrics to assess project performance against predefined objectives, facilitating accountability and increasing transparen

3. References and Lessons Learned:

These types of indicators serve as a reference for future projects, allowing project managers to identify best practices and lessons learned to optimize future projects.

4. Reports to interested parties:

Lagging indicators provide meaningful data to report project status to stakeholders, demonstrating the results achieved and showing the success of the project.

indicators
Understanding indicators: Leading and Lagging | Illustration by Andy Baraja

Either of these indicators, Leading and Lagging, are essential tools in project management, providing valuable information on progress and results.

By leveraging Leading indicators, project managers and the team can proactively monitor and manage project activities to ensure success. Lagging indicators, on the other hand, provide a retrospective assessment of project performance and serve as a basis for continuous improvement.

We cannot determine whether Lagging is better than Leading, and vice versa, for a good management of our projects we need to understand and use both.

To conclude, I leave you with a reflection by William Edwards Deming: 

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Good luck in your projects!

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About the Author

Ana Aranda Diaz

Ana Aranda Diaz

Ana Aranda, PMP®, PMI-ACP®, SAFe® SPC, AgilePM® and PRINCE2® Instructor, is a Lead Expert and Operations Manager for Netmind's US office. With more than 25 years' experience in Product Management, Project Management, and business development , she is comfortable helping others overcome challenges and manage cultural diversity. Ana has worked as a business consultant as well as an instructor in various multinational companies across the globe. She is passionate about fostering an organization's Project Management culture and improving their human skills aspect. Ana telecommunication engineer with an executive Master's Degree in Human Resources Management. She has strong business and technical background that allows fast learning and enables immediate value generation. Connect with Ana on LinkedIn.

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