Lagging Indicators and SMART Criteria: Key Exam Concepts

PMBOK v8 Definition

Lagging indicators measure project deliverables or events after they occur, providing information about past performance or conditions. These indicators are easier to measure than leading indicators and include examples such as the number of deliverables completed, schedule or cost variance, and the amount of resources consumed. SMART criteria are guidelines used to set clear, attainable, and meaningful goals, with the acronym standing for specific, measurable, achievable, realistic, and time-bound.

Why It Matters for the Exam

The PMI exam frequently tests the distinction between leading and lagging indicators, as well as the application of SMART criteria to project objectives. Questions appear in the Monitoring and Controlling process group domain, often asking candidates to identify which type of indicator is being described in a scenario, or to recognize when a goal meets SMART criteria.

Key Points to Remember (for the exam)

• Lagging Indicator Definition: Measures deliverables or events after the fact – reflects past performance
• Key Lagging Indicator Examples: Number of deliverables completed, schedule variance, cost variance, resources consumed
• Correlation Use: Lagging indicators can reveal correlations between outcomes and environmental variables (e.g., schedule variance correlating with team member dissatisfaction)
• SMART Acronym: Specific, Measurable, Achievable, Realistic, Time-bound
• SMART Purpose: Ensures objectives are well defined and reachable within a certain timeframe
• Comparison with Leading Indicators: Leading indicators are preferable because they can prevent future problems; lagging indicators are easier to measure but provide after-the-fact information
• Common Confusion: Lagging indicators are not predictive – they report what has already happened

Typical PMI Exam Example

A project manager reviews the monthly performance report and discovers a 15% cost variance on the project. The project manager uses this data to investigate whether team morale issues contributed to the overspend. In this scenario, the cost variance is a lagging indicator because it measures past performance, and the investigation of team morale represents using the lagging indicator to find correlations with environmental variables.

PMI Exam Traps

• Trap: Confusing lagging indicators with leading indicators

  • Reality: Lagging indicators measure past events; leading indicators predict future performance

• Trap: Thinking lagging indicators are not useful

  • Reality: Lagging indicators help find correlations between outcomes and environmental variables, revealing root causes

• Trap: Confusing SMART criteria with project success criteria

  • Reality: SMART criteria apply to goals and objectives; success criteria are broader measures of project completion

• Trap: Assuming schedule variance is a leading indicator

  • Reality: Schedule variance is a lagging indicator because it measures what has already happened (past performance)

Important PMI Connections

Quick Review Questions

1. A project manager notices that the number of deliverables completed is below target. Is this a leading or lagging indicator?

2. What does the "R" in SMART criteria stand for, and why is it important for project objectives?

3. How can a lagging indicator showing schedule variance help a project team address a hidden problem?

4. Why are leading indicators considered preferable to lagging indicators in project management?

5. A project goal states: "Complete 50% of testing by June 30." Does this goal meet SMART criteria? Why or why not?

PMBOK v8 Reference

Section 2.1.5.2 - Lagging Indicators Section 2.1.5.3 - SMART Criteria