“The goal is to turn data into information, and information into insight.”
- Carly Fiorina[1]
12.1 Overview
Tracking of the appropriate metrics can help drive your EHS performance. Whether you call them a climate score, key performance indicators or metrics, they can be used to properly evaluate your companies EHS status and identify areas for improvement.
Why are we discussing leading indicators? A survey of 18 EHS practitioners in the Mining, Construction, Manufacturing, and Professional, Scientific, & Technical Services Industries published in Transforming EHS Performance Measurement Through Leading Indicators, Campbell Institute, National Safety Council, 2013, show 61% feel measuring leading indicators is extremely important and 28% feel it is very important. However, in my experience, a lot of EHS professionals are not familiar with the leading indicator concept.
Sports offer several lagging indicator examples like batting average. If you are not into sports, another example is your teenage kid’s driving record. In some circumstance, the lagging indicator can be a suitable way to evaluate how good a driver your teenager is, or how good a batter your favorite baseball player is. Where lagging indicators fail is making the connection between the driving record and batting average. Pointing out a low batting average will not make a baseball player hit better.
That’s where leading indicators come in. Leading indicators, when properly selected, should be based on the parameters that directly impact a batting average such as practice time, pitch selection, and arm strength. For your teenager, leading indicators might be hours of simulator time, driving education classes, and elimination of distractions.
Depending upon the source a third type of indicator is near misses. Some sources put near misses in lagging indicators and others feel it is a separate indicator, but you could group them into the following:
- Lagging: Retrospective/incidents that have occurred
- Leading: Forward looking
- Near misses
In a survey of 18 EHS practitioners in the Mining, Construction, Manufacturing, and Professional, Scientific, and Technical Services Industries published in Transforming EHS Performance Measurement Through Leading Indicators, Campbell Institute, National Safety Council, 2013, few respondents suggest only leading or only lagging indicators and most suggest a combination of both. However, overall, they prefer lagging indicators at the corporate level and leading indicators at the site level.
Lagging indicators rely on past data that cannot be directly controlled. Examples of lagging indicators include:
- Total Recordable Incident Rate (TRIR)
- Number and severity of other accidents or incidents
- Number or volume of spills and releases
- Violations
In my experience, these are commonly used indicators that most of you are probably familiar.
Besides not providing a nexus between the issue and the solution, what are issues with lagging indicators?
One of the issues with lagging indicators, such as the Total Recordable Incident Rate (TRIR), is they may not have enough data to be statistically significant. I promise to not discuss statistics and will instead provide some examples. Say your teenager gets into an accident the first time they drive, or your favorite baseball player hits a home run on their first at-bat of the season. If you extrapolated this limited data, you would assume your teenager would get in an accident every time they drove, and your favorite baseball player hits a homerun every time they go to the plate. If you want valid lagging indicator data, you need to use a lot of data. There are formulas for calculating the amount of data you might need, which will vary across the board and are not easy to compute. Instead, gather data from a lot of sites and over a long period of time to improve the significance of the data. For example, you should wait until the end of the season to evaluate if your favorite baseball player is a good batter or look at their entire career. If you ever let your teenager drive again (i.e., after they got in an accident the first time they drove), you hopefully will see an improved driving record.
I have been to sites that did not appear to be that safe, but they had a low Total Recordable Incident Rate (TRIR), as well as sites that had lots of safety measures, but a higher Total Recordable Incident Rate (TRIR) than expected. Sometimes I wonder if that was due to a lack of injury reporting awareness and a heightened awareness for the safer site. However, incidents have a randomness associated with them and even sites with great safety systems and measures have safety incidents.
I worked for a corporate operating officer that wanted to look at Total Recordable Incident Rate (TRIR) data for each our sites monthly. It took a while to educate him that we should be looking at the Total Recordable Incident Rate (TRIR) data less frequently and not focusing in on data for one particular site. If you have a site with only a few employees, one incident can cause their Total Recordable Incident Rate (TRIR) to skyrocket. One reportable injury at a site with 4 employees can result in a Total Recordable Incident Rate (TRIR) of 25, which would be considered by most to be an exceptionally high rate.
You may want to think twice before you tie performance management goals to lagging indicators. The Occupational Safety and Health Administration (OSHA) does not want any rewards based on injury and illness rates because they fear it will lead to under-reporting[2].
As I discussed in the beginning, lagging indicators track the number of issues, but do not put the focus on the solution to the issue. If you dig deeper into lagging indicators, by collecting additional data, you can illuminate specific issues such as certain types of injuries that may be occurring (e.g., back injuries). However, knowing that back injuries are an issue might help you know what needs to be done to prevent them, but how do you track what you are doing to prevent them? You can wait to see if the number of back injuries goes down over time after you implement corrective measures, or you start tracking the corrective measures using leading indicators.
Most of the literature I have read does not recommend ignoring lagging indicators: they recommend shifting more focus to leading indicators. So, what is a leading indicator? One definition provided for a leading indicator is:
“Proactive, preventative, and predictive measures that monitor and provide current information about the effective performance, activities, and processes of an EHS management system that drive the identification and elimination or control of risks in the workplace that can cause incidents and injuries.”[3]
So, what do leading indicators do? If properly identified, assigned, communicated, and assessed, they can help you:
- Monitor and evaluate performance
- Motivate behavior, commitment, and improvement,
- Anticipate, prevent, or eliminate risks and losses
I stated, “If properly identified”. How hard is it to identify leading indicators? I will give lots of examples of leading indicators, so it isn’t that hard, but later we will discuss evaluating to see if you have used the appropriate leading indicators. In a survey of 18 EHS practitioners in the Mining, Construction, Manufacturing, and Professional, Scientific, & Technical Services Industries published in Transforming EHS Performance Measurement Through Leading Indicators, Campbell Institute, National Safety Council, 2013, only over 30% said it was slightly difficult, 38.5% said it was moderately difficult and 7.7% said it was extremely difficult to identify leading indicators.
Leading indicator examples:
- Audits
- Behavioral based safety observations
- Corrective actions
- Employee involvement
- Inspections
- Investigations
- Management engagement activities
- Meetings
- Preventive maintenance
- Training
For each of these items, you could use the number completed, number completed on-time (e.g., not the audit score), percentage of employees completing BBS, frequency of inspections, investigations completed for incidents, number of employees participating in meetings, hours of EHS training, etc.
12.2 Identifying Your Leading Indicators
If you already have goals and objectives, look for metrics that align with those. If your concern is combustible dust, you might want to look at inspections and preventive maintenance of baghouses and critical safety devices, and housekeeping activities.
You may want to establish different metrics for different personnel. Executives might want to see rolled up data or they would be more interested in management participation metrics and site personnel may want metrics that they can impact.
Questions to ask when identifying leading indicators include: Can you measure it? Does it give you a clear signal of being important to safety? Is it helping you eliminate the defects you hope to avoid?
You could let each department or facility develop their own leading indicators, but this would make it harder to compare them or roll them up facility or corporate-wide.
Good leading indicators are based on SMART principles, meaning they are Specific, Measurable, Accountable, Reasonable, and Timely.
Before you complete the rollout of the leading indicators, you need to think about training applicable personnel on the leading indicators and how you will communicate the results. Some questions you need to answer include:
- Who will gather leading indicator data? You need to assign responsibility for documenting the information, compiling the data, and conducting any calculations
- What do metrics mean? You should explain what you consider a good score, ok score, poor score and what that means for a site and/or employee. Depending upon how complicated your metrics are, you may not know what represents a good score.
- What will be done with results? Will the score be used as part of their performance management? Should the site level scores be rolled up and used for the business unit?
- How will you disseminate information? Internally posting the information for all sites can lead to healthy competition but could rub some people the wrong way.
12.3 Leading Versus Lagging Indicator Correlation
If a metric is not providing value, stop using it and look for others. Occupational Safety and Health Administration’s (OSHA) guidance on “Using Leading Indicators to Improve Safety and Health Outcomes” recommends the Plan Do Check Act steps, which would entail rolling out the metrics and then re-evaluating them. Improved leading indicator metrics should be improving associated lagging metrics, but this may take time and you may not have statistically significant data to show a correlation.
In a survey of 18 HES practitioners in the Mining, Construction, Manufacturing, and Professional, Scientific, & Technical Services Industries published in Transforming EHS Performance Measurement Through Leading Indicators, Campbell Institute, National Safety Council, 2013, the majority thought it was important to link leading and lagging indicator performance.
The company Cummins calculated a simple correlation coefficient for leading indicator and found a strong correlation between training hours and incidence rate at both the corporate and business unit data according to the Practical Guide to Leading Indicators: Metrics, Case Studies and Strategies, Campbell Institute, National Safety Council, 2017
12.4 Performance Management
Some literature warns against using leading indicators to determine incentives such as raises and/or bonuses due to the potential for cheating on data. I have heard other sources that recommend it. I think it is important to use leading indicators for assessing personnel and if we must worry about personnel trying to cheat the system, we have bigger ethical issues. Companies use other lagging and leading indicators, such as profit, for incentives so why not EHS.
Tying incentives to leading indicators can help drive your EHS results. If leadership is willing to hold people accountable to the leading indicators, which would require EHS requirements to be significant compared to financial and operational requirements, they are demonstrating their commitment to the process and EHS.
If the metrics are not attributed fairly, you risk blowback and lack of buy-in. Also, if the metrics are too complicated and employees cannot understand why they have a low metric, they can become disenfranchised with the process. Early communication on the expectations can help vet issues before they significantly impact their performance management.
In a survey of 18 HES practitioners in the Mining, Construction, Manufacturing, and Professional, Scientific, & Technical Services Industries published in Transforming EHS Performance Measurement Through Leading Indicators, Campbell Institute, National Safety Council, 2013, 40% of executives did not have compensation tied to leading indicators, 20% had quite a bit or greater. 40% of EHS professionals had accountability for leading indicator performance.
12.5 For Additional Information
- “Guidelines for Process Safety Metrics” by the American Institute of Chemical Engineers Center for Chemical Process Safety, John Wiley and Sons, New York, New York, 2010
- “Transforming EHS Performance Measurements Through Leading Indicators” by the Campbell Institute, National Safety Council, 2013 (https://www.thecampbellinstitute.org/wp-content/uploads/2017/07/Campbell-Institute-Transforming-EHS-through-Leading-Indicators-WP.pdf)
12.6 References
[1] “Feature Engineering in Python” Towards Data Science website accessed August 10, 2022 (https://towardsdatascience.com/feature-engineering-in-python-part-i-the-most-powerful-way-of-dealing-with-data-8e2447e7c69e)
[2] Occupational Safety and Health Administration (OSHA) October 11, 2018 Memorandum for Regional Administrators and State Designees from Kim Stille Acting Director Enforcement Programs, Subject “Clarification of OSHA’s Position on Workplace Safety Incentive Programs and Post-Incident Drug Testing Under 29 C.F.R. § 1904.35(b)(1)(iv)” (https://www.osha.gov/laws-regs/standardinterpretations/2018-10-11)
[3] “Transforming EHS Performance Measurements Through Leading Indicators” by the Campbell Institute, National Safety Council, 2013 (https://www.thecampbellinstitute.org/wp-content/uploads/2017/07/Campbell-Institute-Transforming-EHS-through-Leading-Indicators-WP.pdf)