Rising Is a Leading Indicator; Falling Is a Lagging Indicator

I used to judge “results” in a very straightforward way: if something went up, we did something right; if it went down, something was wrong.

Whether it was business metrics, team morale, or personal growth, I habitually interpreted the world through this simple causal logic. Over time, I came to realize that this understanding wasn’t just simplistic—it was dangerous.

What truly shook me were a few experiences where “everything seemed fine, yet things suddenly collapsed.”

Data was rising, morale was high, external feedback was positive, and everyone in meetings appeared confident. In moments like these, standing in that position, it’s hard not to believe it’s proof of capability and validation of the right direction. You even start rationalizing the rise: the strategy was sound, the organization was aligned, the people had matured. That feeling is seductive because it gives you a narrative of certainty.

But the problem is that rising often occurs during a phase where “expectations have already been priced in.”

Many times, an indicator goes up not because of what was done well today, but because yesterday, the day before, or even earlier, everyone had already formed an optimistic consensus about the future. Resources were allocated ahead of time, patience was drawn upon, and problems were temporarily shelved. Rising is more an outward expression of confidence than a settlement of reality. What it tells you is often “people are still willing to place their bets,” not “the system is solid.”

I only truly understood this after experiencing the downturns.

Falling almost never happens the moment a problem first emerges. Real structural issues always exist first in seemingly “insignificant” forms: processes start slowing down, collaboration becomes strained, key decisions are repeatedly delayed, a few people begin to go silent.

These signals rarely show up directly in outcomes; instead, they are often masked by the rise. It’s only when some external variable shifts or patience runs out that the decline appears, seemingly out of nowhere.

So, falling is more like a long-overdue bill.

It’s not immediate feedback on today’s decisions, but a collective settlement of a series of past choices. This is why, when a decline actually hits, trying to “assign blame” or “correct course” is often too late. You can patch up surface-level losses, but you can’t quickly repair the structural cracks that have been accumulating for a long time.

This understanding is particularly brutal for managers.

During a rising phase, you almost never get honest organizational feedback on dissenting opinions. Most issues are brushed aside with a casual “overall, things are fine.” The more you try to slow down, review, or question the direction in this phase, the more you risk being seen as a killjoy, conservative, or even out of touch. The rise itself compresses the organization’s space for reflection.

And when the decline finally arrives, the organization suddenly becomes remarkably clear-eyed. Everyone starts searching for causes, revisiting decisions, and bringing up those previously ignored issues. But by then, the tone of discussion has shifted from “is this worth adjusting?” to “we must stop the bleeding.” The space is different, and the mindset is entirely different.

Over time, I learned to view the same outcome through two lenses.

When everything is rising, I deliberately remind myself: this reflects expectations more than it proves correctness. What’s truly worth worrying about isn’t a slower rise, but one that’s too smooth, almost frictionless. And when a decline appears, I resist the urge to jump to conclusions, because I know it’s just an echo of the past—a result the system had already seeded.

If there’s any truly valuable window for judgment, it’s often not in the rise or fall itself, but in the moments before they happen.

In those times when data hasn’t visibly changed and collective sentiment hasn’t yet shifted, can the organization still hear the untimely voices? Can it still invest attention in places that “seem fine”? These are the signals that truly lead the outcomes.

Now, when I revisit the idea that “rising is a leading indicator, falling is a lagging indicator,” I see it less as a tool for predicting trends and more as a reminder for people. A reminder not to be lulled by the rise, nor to be paralyzed by the fall. The real challenge is to remain honest about the system when there are no clear results. That is the truest test of judgment.