Two kinds of signal

A lagging indicator reports what already happened: "revenue fell last quarter." A leading indicator is an earlier, operational signal that predicts a lagging one before it shows up in the headline number: declining product usage per account, slower support-ticket response times, a rising rate of "at risk" flags from an account-health score (Meridian's own Lesson 26 initiative, in fact), each of these tends to move before revenue or NRR does, not after.

"Revenue fell." → "These operational signals suggest revenue may fall in six months."

Why this matters for a Data & AI role

This is one of the strongest lessons in the whole course for a Data & AI role specifically, because building the systems that surface leading indicators, rather than waiting for the lagging number to confirm a problem that's already happened, is exactly the kind of infrastructure work a Data & AI function is positioned to own inside a portfolio company.

Illustrative, indexed to 100 at month 1. The shape, not the exact values, is the point: one line inflects, then the other follows.

Checkpoint

  • Lagging indicator: reports an outcome that's already happened.
  • Leading indicator: an earlier operational signal that predicts the lagging one before it shows up.
  • Shifting monitoring from lagging to leading: is a direct, ownable Data & AI contribution inside a portfolio company.

If anything here still feels unclear, ask before moving to Lesson 32.