Leading indicator
A leading indicator is intended to signal conditions or actions influencing later outcomes, such as training effectiveness, order pipeline or preventive maintenance. Its value depends on a credible relationship with the desired result and on the opportunity to act in time. It may be financial or non-financial and is not a guaranteed predictor. Check whether the relationship remains valid when business conditions or incentives change.
Worked example
First-time-right production may indicate future warranty cost and customer retention, but the link should be tested rather than assumed.
Common mistake
Calling a measure leading does not prove causation. Activity that is easy to count, such as training hours, may not represent useful capability.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | APM | Direct | September 2026–June 2027 |
| ACCA | PM | Supporting | September 2026–June 2027 |