Lagging and Leading KPIs: Are You Tracking Both?

Lagging and leading KPIs work hand in hand to deliver insights on business performance

Analytics can be a powerful tool for improving and growing any business. However, it’s important to remember that not all data is created equal when it comes to the potential for delivering actionable insights for your operation. If you want to get the most from your analytics activities, first and foremost you need to be tracking the right data points. The “right” data will vary from business to business, but you should definitely make sure you are tracking both lagging and leading KPIs.

What is a KPI?

KPI stands for Key Performance Indicator. KPIs can measure anything related to a company’s specific business objectives or organizational goals. This includes the functions and processes necessary to achieving those goals—no matter how far removed they may be from the final measurable result.

Lagging KPIs

The easiest type of KPIs to measure and interpret are lagging performance indicators. These indicators are basically just historic data. They measure the results of past programs, campaigns, and activities and tell you how you’ve performed. Financial indicators like gross revenue, number of transactions, dollars per transaction, etc. are classic examples of lagging KPIs. Other examples of lagging KPIs might include number of customers served, average time to fill a food service order, number of returns in a retail store, etc. While these kinds of lagging KPIs are important to track, unfortunately they do not tell you anything in and of themselves about WHY you’ve gotten a given result. And they cannot predict future performance.

Leading KPIs

In order to figure out how to improve on your lagging KPIs, you need to track leading KPIs. Leading KPIs measure things that are likely to influence your future performance. While identifying leading KPIs can be difficult, tracking them is very rewarding. This activity is where your actionable insights are really going to come from. For example, say you’re in the hospitality industry. Rather than waiting to see how your revenue looks at the end of the quarter, you can track leading KPIs on a daily basis. This might include indicators like percentage of reservations canceled, percentage of rooms with maintenance issues, number of guest complaints about staff or cleanliness, and even employee engagement. You may find that by identifying problems in these areas and making improvements, you can increase your overall performance.

Track Your KPIs with MyFieldAudits

With MyFieldAudits, tracking KPIs doesn’t have to be complicated. Our cloud-based mobile software is easy for retail, restaurant, hospitality, and franchise businesses to use, especially for tracking KPIs observable on location visits. You can start small and gradually add new leading KPIs as you identify them. To learn more about how MyFieldAudits can help you generate actionable insights for your business, please contact us at info@MyFieldAudits.com today.