KPIs fall into two categories: leading and lagging. Leading indicators predict what may happen in the future. For example, an increase in deal size or employee headcount may portend revenue growth. Leading indicators offer businesses the opportunity to prepare themselves and, if required, adjust their strategies. Lagging indicators reflect past results, measuring the aftermath of actions. Monthly recurring revenue and employee turnover are examples. Lagging indicators can uncover trends, help companies evaluate their progress and influence future decisions.