What is 'continual improvement' primarily based on?

Continual improvement is primarily based on leading indicators because these indicators allow organizations to proactively measure performance and identify opportunities for enhancement before issues arise. Leading indicators provide forward-looking insights that can guide decision-making and strategic planning, enabling organizations to anticipate changes, reduce risks, and ultimately enhance overall performance.

Incorporating leading indicators into a continual improvement strategy fosters a culture of proactive management, where organizations can engage in regular assessments and adjust their processes to drive efficiency and quality. This forward-thinking approach is essential for continuously evolving practices and maintaining competitive advantage.

On the other hand, the other options focus on different aspects of performance and analysis. Lagging indicators reflect past performance and can often tell you what has already occurred rather than what can be improved in the future. External audits, while valuable for compliance and verification, may not provide the immediate insights needed for ongoing improvement. Reactive strategies, which address issues after they arise, do not align with the proactive nature of continual improvement. Thus, leading indicators stand out as the best foundation for establishing a framework for continual improvement.