Key Performance Indicators (KPI) – To Lead or to Lag, that’s the question?

Not only is it important to select Key Performance Indicators (KPI) that are fit for purpose, easy to manage and sustainable but it’s a good idea to have 2 Faced KPI in that they should be both Leading and Lagging indicators. So, why lead or lag?

Let’s start with some definitions:

Key Performance Indicators (KPI) are a type of performance measurement that helps you understand how your organisation or department is performing.

Lagging indicators look back at historical performance and hence focus on outcomes. Lagging indicators are easy to measure.

Leading indicators are forward-looking and offer a glimpse into future performance. Leading indicators are more difficult, prone to subjectivity and error due to the quality of data.

When it comes to Health and Safety, companies are shifting their focus to using leading indicators to drive continuous improvement because leading indicators measure performance whilst lagging indicators measure failure. The objective is to improve performance and hence focusing on Leading indicators supports this impetus.

For Leading indicators to be successful, they should:

  1. Clearly, indicate small improvements in performance.
  2. Measure positive aspects (i.e., what people are doing versus failing to do).
  3. Facilitate feedback to all stakeholders (internal and external).
  4. Be reliable, credible and predictive
  5. Focus dialogue and increase constructive problem solving around safety
  6. Provide transparency on what needs to be done for improvements
  7. Track impact versus intention

Examples of Leading and Lagging Indicators for Health and Safety

Typical examples of indicators for Health and Safety include:

LEADING

LAGGING

  • Injury Frequency and Severity
  • Lost Workdays
  • Reportable injuries or incidents (i.e., regulatory)
  • Employees compensation/insurance related costs
  • Chemical releases

 

In conclusion

Leading and lagging indicators are the traditional focus of reporting and analytics initiatives. They ensure we are heading in the right direction. They have a very important role to play in every organisation.

To “really” improve Health and Safety within your organisation, it is important to use a combination of leading and lagging indicators.

Leading indicators should be focused on drivers for impact. For example, don’t just track the number and attendance of safety meetings and training sessions – measure the impact of the safety meeting by determining the number of people who met the key learning objectives of the meeting/training.

Leading and lagging indicators work in harmony towards achieving goals and objectives.