A lagging indicator reports a result after it has already happened: EBITDA, benefits realized, revenue booked. It is an authoritative record of what occurred, and for that reason it is often the number an organization is ultimately judged by.
The danger is managing by lagging indicators alone. Because they confirm an outcome only once it is too late to change it, relying on them exclusively leaves no room to intervene. Effective measurement pairs lagging indicators of realized value with leading indicators that predict them early enough to act.
