Professional Safety Journal Asks Miles Ewing
PS: Why are leading indicators so important?
ME: Leading indicators are more valuable because they provide insight into future events you are trying to forecast where history may not. A simple sports example illustrates how leading indicators can facilitate the prediction of future performance. If you look at the forecast of a baseball game knowing things about the team in advance can help you. Knowledge of player injuries and the capability of a starting pitcher, for example, are leading indicators and reveal a great deal more about the possible outcome of a game than their win/loss record.
PS: You say that the "art" of identifying leading indicators is to know when to stop "peeling the onion." Can you explain this is more detail please?
ME: You start thinking about drivers. What is the driver of a new sale? Well, it's someone walking into the store. Why? Because he or she saw a sign. Was it the placement of the sign? Or is it because of something else? There's an infinite string you can follow if you keep asking "why". If you have ever peeled an onion, you know that you can keep removing layers until there is nothing left. With drivers, like the onion, you have to figure out when to stop and find the most relevant thing.
PS: Do you think that lagging indicators are necessary to determine trends before using leading indicators?
ME: I wouldn't say lagging indicators are necessary. I think history is a valuable guide to identifying leading indicators. For example, you can use history to identify the relationship between a given leading indicator and performance.
PS: So what does historical performance tell us?
ME: You can ask yourself what the trend in this metric was and what impact did it have on financials? Then we can look at that metric in advance. You know your lead volume well before you know your revenue. With leads, we can forecast what the revenue is going to be based on that.
PS: Can you think of a way you would apply this to safety performance?
ME: Yes, I believe so. I would begin with looking at past performance to identify those metrics which seem to be correlated with safety incidents. Then model the relationship to be used as a forecast method for safety incidents based on the leading indicator. An example might be turnover rate. You may discover that you have an increase in accidents with increased turnover. I would want to look back at my hiring trends by a given department and look back at my safety learning curve: How much does a rookie screw up? What happens if I change out the manager instead of the staff? Can I forecast if I'm going to do a major hiring spree? What do I forecast my safety incidents are going to be based on this plan? You have to monitor to begin to develop your leading indicators. If you're not measuring stuff, it's hard to figure out what is actually happening.
PS: How can an SH&E manager use these indicators to gain management buy-in, commitment and support?
ME: My impression is that management buy-in and support is often best gained via trends and measurement. The ability to present data and to show trends and improvement is how you get management involved. Then you can educate in a way they understand and can take action on. If a trend is a high turnover, you plan for it and you put it in the forecast. It's almost always about being able to make something measurable. The trick often is to go find things that are already measured such as turnover for new hires, then you want to understand what the impact of those decisions are on your safety metrics.
PS: You are involved with integrated performance management. Can you explain what this entails and how an SH&E professional might apply these concepts to safety performance?
ME: Integrated Performance Management (IPM) is the process of identifying metrics that best measure the alignment of the organization's actions to management's strategic objectives, setting targets for those metric and directing resources to support performance against them. In the case of safety, IPM would presumably work in a similar fashion. The organization would look for metrics that help align the organization to its goals, set targets, measure and direct resources to performance against the metrics. One of the things that may be newer for safety is the quest for leading indicators to help better manage against targets. Leading indicators are helpful because the allow management to take action to effect eventual results.