There is an enormous importance to assessing whether a metric is a leading indicator or a lagging indicator.
Leading indicators are quantitative measures that occur before the event occurs. Lagging indicators are quantitative measure that occur after the event occurs.
lagging indicators are the source of oscillations from information delays. If you spend your time focused on the lagging indicators, you will constantly be playing catch up instead of getting ahead. If you instead focus on leading indicators which are factors correlated with results before the event occurs, you’ll always be much better off in the long run.
The best example I can think of for this is in FPL. The age old discussion of Form vs. Fixtures. Or, better put, Statistics vs. Fixtures.
It’s not to say that stats are not important. Stats are a really good tool to determine if someone is a good player or not. Or as a tool to assess how lucky they’ve been. But they aren’t a good tool, especially if used in a bubble, for predicting future results because they are a lagging indicator.
Simply, we can only see if someone has done well, after they’ve done well.
Fixtures on the other hand are leading indicators. If we use stats to assess which fixtures are good and which are bad, and then make decision based on the upcoming fixtures, with a bit of luck, we will be ahead of the curve every time. We will be making proactive decisions vs. reactive decisions.
From a more serious perspective, this concept is particularly important for goal setting. My goal setting method involves filtering my goals down to weekly targets. When setting these targets though, it’s best to take time to consider if the target is a leading indicator or a lagging indicator.
Quote
“In other words, lead measures turn your attention to improving the behaviors you directly control in the near future that will then have a positive impact on your long-term goals.” “I used to focus on lag measures, such as papers published per year. These measures, however, lacked influence on my day-to-day behavior because there was nothing I could do in the short term that could immediately generate a noticeable change to this long-term metric.”
Connections
Progressive Overload Is A Law of Human Improvement
Reference
Book: Deep Work Author: Cal Newport Location: 1544 & 1548