Lead and Lag Indicators

To go on further with the output discussion, we need to make sure we have an understanding of indicators.  Indicators inform us what is going on. My stomach growling is a pretty good indicator that I am hungry, and sweating while mowing the lawn is a good indicator I will need a refreshing beverage upon completion.  Similar mechanisms should be used to understand the state of the product development system.  To determine the indicators, we must understand the system.

Lead indicators, are those metrics that allow us to predict with some confidence – what is going to happen next.  For example, when we test the product “appropriately”, we learn something about the products ability prior to the launch.  The failures we witness during our testing provide a glimpse of what we can expect see in the field. Thus it is a leading indicator – we are able to make some prediction on the final output based upon this earlier variable.  Some examples of these leading indicators:

  • Defect arrival rate
  • Defect closure rates
  • Distribution of severity (minor blemish or safety issue)
  • Distribution of faults found through the development cycle (development iterations)
  • Percent coverage or ratio of test cases conducted to total test scope

Lag indicators, on the other hand, do not allow you to predict in advance.  Lag indicators are measurements that do not offer this p

In our testing example above, the lag indicator would be:

  • Rate of failure in the field
  • Type of failures in the field
  • Cost of quality

With some planning and identification of key metrics, we can be in a position to predict and not just react to the situations we find ourselves.  Some systematic thinking up front can save you greatly in the end.

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