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Leading/lagging indicators

The benefits of leading indicators and analytics

May 1, 2013

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How can leading indicators and analytics be used to mitigate risk and reduce employee injuries and illnesses?

Responding is Todd Hohn, vice president of strategic resources, UL – Workplace Health and Safety, Franklin, TN.

Most safety professionals strive for continuous improvement. It comes from their commitment to keeping workers as safe as possible. It also is a logical outcome of coping with ever-changing regulations and pressure to justify budgets. With safety performance becoming increasingly valuable as a competitive differentiator, there are strong business incentives to seek safer tools, equipment and processes, and more effective training and management practices.

However, it is rare to find an organization that is able to sustain continuous improvement. In many cases, graphs of incident rates, lost time and other metrics reveal a series of peaks and valleys. Other companies hit a performance plateau. At larger organizations, there is the challenge of maintaining consistency across multiple departments or sites. A small percentage of underperformers or, worse, a single catastrophic incident, may eclipse improvements elsewhere and cause lasting damage to the company’s reputation.

Focus on leading indicators

Organizations that successfully sustain continuous improvement begin the journey by shifting their focus from lagging to leading indicators.

Success or failure of safety programs typically has been measured after the fact, using data such as incidents, injury rates and associated costs. These are referred to as lagging or reactive indicators. The growing consensus among many safety professionals is that lagging indicators, while important, do not truly reflect the health of the safety program.

In contrast, leading indicators relate to processes designed to prevent loss and, in some respects, have the added value of predicting that an incident or accident could occur if not addressed. They provide the opportunity to monitor and assess the effectiveness of safety systems and processes, as well as the overall health of a company’s safety management system or safety culture. Further, leading indicators can be used to benchmark current practices and demonstrate continuous improvement over time.

Examples in which leading indicators have a strong correlation with outcome (losses) in a period-over-period comparison include:

  • Number of inspections and observations comparing period over period
  • Percent of compliant/safe conditions
  • Percent of deficiencies
  • Percent of severe/imminent conditions relative to Risk Severity Index
  • Percent completion of corrective actions within timeline

Whatever leading indicators your organization adopts, they should:

  • Align with your goals
  • Be attainable and easy to measure
  • Provide immediate insight into whether desired outcomes are being achieved
  • Have buy-in and support at all levels in the company

In the coming years, analytics (data from leading and lagging indicators) will continue to play out as a theme that will help companies maximize the utilization of both time and resources by prioritizing when and where to act. This insight will allow for the creation of safety systems and processes that, if focused on leading indicators, will help define success as a reality.

Editor's note: This article represents the independent views of the author and should not be construed as a National Safety Council endorsement.

 

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