Lagging vs. Leading

Note to future self…

I am always looking for good questions to sharpen my thinking. Today I think I came across a good one:

Is this factor a lagging or a leading indicator of what I want to accomplish?

I feel that a lot of times we optimize for the wrong things. In my opinion one of the reasons that we do this is because we see others optimizing for variables and we think that if we can accomplish that we will succeed. This might be true but it might lead us to optimize the wrong thing.

This is sounding too abstract so let me give you an example. I apologize ahead of time because this example is about startups (surprise surprise). So, I see a lot of peers around my age that are starting companies optimizing for getting funded. This is all well and good because you need to eat until your company is profitable. Nevertheless, I’ve noticed that a lot of my peers prioritize funding over understanding the fundamentals of their company, market, growth, etc. In this case, I think funding should be a lagging and not a leading indicator of the success of your venture.

Now in what other areas of your life can you see this distinction between lagging vs. leading indicator of success? Here are some quick thoughts:

  1. Clout: people seem to think that having more followers/engagement means that you must be successful. In this case, followers are perceived as leading indicator. I believe that it should probably be the opposite. You’re successful doing something and then that leads you to have gain those followers. I might putting my own opinion/bias into this so yeah ¯\(ツ)
  2. Wealth: people assume that displays of wealth are a sign that you’re doing well financially (a leading indicator that might signal where you’re heading). I think displays of wealth can be the byproduct of having too much discretionary income that’s not being redeployed for other purposes (a lagging indicator of what you have accomplished in the past). This one might be less clear so I will try to hash it out in a future post.

In any case, I think that this is question worth thinking about when it comes to evaluating signals that we pick up from others and defining our own objectives. That’s it.

Now back to work…