ECOMPLIANCE MANAGEMENT SOLUTIONS INC.

DEFINITIVE
G U I D E TO
LEADING
I N D I C ATO R S
TA B L E
OF CONTENTS

1 INTRODUCTION P2

2 THE NEED TO AD OPT EHS LE ADING INDICATORS P5

2A Limitations of Lagging and Leading Indicators P6

3 CHO OSING THE RIGHT LE ADING INDICATORS FOR YOUR COMPANY P11

3A Determining Your Companys Maturity Level P12

3B Setting Company Goals P14

3C Setting SMART Goals P15

3D Choosing the Right Leading Indicators P16

4 HOW TO START TR ACKING LE ADING INDICATORS P19

4A Tips for Successful Change Management P 20

4B How to Track Leading Indicators P 22

5 HOW TO ME A SURE SUCCESS USING LE ADING INDICATORS P 25

6 CONCLUSION P32

7 APPENDIX P34
1

THE
INT ROD UCTION
 1 INTRODUCTION

As companys work to build a continuously improving health

and safety program, experts place a growing level of importance
on measuring safety performance using a variety of techniques,
tools and key performance indicators (KPIs). Despite the proof
found in studies that failure-focused measures dont help
companys drive continuous improvement1, a large number
of Environment, Health and Safety (EHS) initiatives are still
assessed using lagging KPIs.

Using leading indicators, on the other hand, enables executives

to build a safety program that identifies risks and takes the
necessary corrective actions in an eort to prevent injuries
and incidents before they happen.

The Definitive Guide to Leading Indicators L AG G I N G I N D I C ATO R

acts as a roadmap to explain what leading is more commonly known as a measurement
indicators are, how using them eectively tool for a companys incidents in the form of
will drive safety performance and lastly, a past accident or statistic (i.e. focusing on
how you can measure successful outcomes. recordable injuries, injury frequency or lost
workdays).
Although you may have previously read
a variety of methods for using leading L E A D I N G I N D I C ATO R
indicators, its important to know that
there isnt one concrete method that is described as a measure indicating the risk
will guarantee a change in your safety of a future event. Leading indicators are used
performance overnight. Rather, best to drive or measure activities that will aid in
practices can be achieved to ensure preventing or controlling an incident /injury
a path of progression and continuous before it occurs.
improvement in safety.

Lets first clear up the definitions

of lagging and leading indicators.

1 http://www.nsc.org/CambpellInstituteandAwardDocuments / WP-Transforming-EHS-through-Leading-Indicators.pdf
2 http://ergo-plus.com/leading-lagging-indicators-safety-preformance/
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 1 INTRODUCTION

To understand the dierences between Caterpillar, a renowned global company

leading and lagging indicators, lets demonstrated this ideology in a talk with
consider the following football analogy. EHS Today. They were able to reduce lost
time injuries and illnesses by 85% over
Lets assume your favorite football team won the past 10 years due to the companys
the Super Bowl last year. This year, you and transition to a culture that utilizes leading
your friends decide to engage in a friendly indicators for safety3.
bet for the upcoming season.
There isnt a secret sauce for implementing
If you had $500 to bet on or against your leading indicators; however, if companies
favorite team, what data would you use to are able to utilize the correct forms of
make your bet? Would you just rely on last measuring, tracking, and understanding
years stats? Or would you want to know the information, over time, theyd be able
who the returning players are? Who has to see a significant improvement in safety
been drafted or traded away this season? performance.
What was the injury status of all of the
team members?

Most of us would base our decision on how

the team is expected to perform based on
an analysis of the data mentioned above
instead of relying on past results, like last
THE DEFINITIVE GUIDE TO LEADING
years Super Bowl win (and we all know
INDICATORS WILL OUTLINE THE
there has only been 1 consecutive Super FOLLOWING AREAS:
Bowl winner in the past 12 years).

The same is true for safety. Last years safety > An explanation of why companies should
records are not predictive data for next adopt leading indicators
years safety performance. To be proactive
with safety, we need current data (leading
> How to choose the right leading indicators by
indicators) that tell us which parts of our
understanding your companys maturity level
safety program are performing poorly so
we can correct issues before they result in
injuries. Lagging indicators like your incident > Setting Company goals
rate are measured only after an injury has
occurred.
> Dealing with change management

> The process of tracking leading indicators

> How to measure the success of your

leading indicators

> Understanding the impact on safety

3 http://ehstoday.com/safety/caterpillar-using-proactive-leading-indicators-create-world-class-safety
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 2

T H E NEED
TO ADOPT
E HS L EADING
IND ICATORS
2A The Limitations of Lagging Indicators
2 T H E N E E D TO A D O P T E H S L E A D I N G I N D I C ATO R S

Leading indicators serve

as a tool to identify the
current risks facing your
company. They can help
provide deep insights
into the strengths and
weaknesses of your EHS
program, as well as display
the need for additional
measures. In this section,
we are going to cover the
need to adopt leading
indicators by looking at
the opportunities and
limitations of both leading
and lagging indicators.
Adrian Bartha, CEO

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 2A L I M I TAT I O N S O F L AG G I N G A N D L E A D I N G I N D I C ATO R S
To be able to better understand the benefits
of leading indicators, it is important to
first recognize the limitations of lagging
indicators a measure that is more widely
used in companies. Lagging indicators alone
may not be sucient to improve EHS
outcomes for the following reasons:
1 Lagging indicators often lack
predictive power.
Waiting for incidents to occur before
implementing safety measures may send the
wrong message to the workforce about the
companys safety culture. To put this in
perspective, its like telling employees that
the company will wait for worker #1 to get
injured before taking measures to prevent
the same fate for worker #2. If leaders want
to drive both productivity and achieve a
strong safety culture, then it is crucial to
focus primarily on leading indicators.
2 Measuring safety performance through
lagging indicators can be expensive.
A Liberty Mutual study estimates that for
every $1 of direct accident costs, there are $3
of indirect costs.4 Some studies indicate that
hidden costs can be 4 to 10 times the insured
costs. Therefore, in total, OSHA estimates
that the direct cost of a recordable incident
is $7,000 and a workplace fatality is
$910,000.5 Waiting for an incident to occur
before taking action is far more expensive
then investing in programs that reduce
incidents before they happen.
4 http://www.larsafe.com/pdfs /Liberty-Mutual-Survey.pdf
5 http://docplayer.net /983753-Predictive-analytics-in-workplace-safety.html
3 Lagging indicators can fail to support
continuous learning opportunities.
By definition, companies that experience
few incidents have very little lagging data
to analyze. The lack of data can lead to
poor decision making and a subsequent
increase in risk until the lagging indicators
show increases to injury rates.
In this case, workers will be unknowingly
at risk and the company will be less likely
to keep their frontline safe. In contrast,
using leading indicators provides enough
data points to ensure continued low
incident rates.
For example, a company that was studied
in a research conducted by Carnegie Mellon
University, lowered its total incidents by
95.3% between 2009 and 2010. As a result
of this reduction in incidents, the company
was only left with 20 lagging indicator data
points to analyze in an eort to reduce
future incidents. Fortunately, the company
had 8,215 leading indicator data points in
2010.5
As they experienced fewer incidents, lagging
data was no longer sucient in providing
relevant and continuous learning
opportunities.5
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 2A L I M I TAT I O N S O F L AG G I N G A N D L E A D I N G I N D I C ATO R S

Many studies and academic papers address
the need to adopt leading indicators.
However, the best way to understand this
need is to start by looking at a practical
example to understand the tangible benefits
gained from their use.
Consider the following scenario:
A storage warehouse requires workers to
wear steel toe boots before handling heavy
crates. Its a standard safe work practice
(SWP) the employer has put in place and
the assumption is that everyone follows it.
However, assumptions can be very dierent
than reality, so how often are they actually
following the SWP? This is where leading
indicators come into play.
Furthermore, leading indicators can also be
used to benchmark current practices and
demonstrate continuous improvement over
time.
For example, recording the time taken to
complete corrective actions (start date
to completion date) and comparing it to
other sites /locations can identify which
sites /locations are communicating and
executing on change most eectively.
Addressing such a deficiency and reducing
the time taken to complete corrective
actions can show managements
commitment to moving from being
merely compliant with safety procedures
to participating in best practice activities
that keep employees safe.

Regular observations can capture and record

this information (i.e. number of observations
with/ without steel toe boots) and then
corrective actions (i.e. additional safety
training, reminders of safety expectations),
and if necessary disciplinary action can be
introduced before someone gets injured.

Another way leading indicators can help

your company is by providing insight into
why unsafe behaviors occur. Using the same
example, if the company was also to record
the nature of the task at hand (i.e. extensive
preparation before handling the crates like
labeling and categorizing), the result could
reveal why workers are not following proper
procedures.

Using these measures, the storage

warehouse might find that non-compliance
with this procedure is a result of the workers
perceived need for speed in completing a
task. Knowing that, the storage warehouse
would be able to address worker perception
(leading indicator) to improve compliance
and avoid potential incidents.1

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 2A L I M I TAT I O N S O F L AG G I N G A N D L E A D I N G I N D I C ATO R S
Limitations of Leading Indicators
By measuring the inputs to a process,
leading performance indicators can
actually complement the use of lagging
indicators and compensate for some of
their shortcomings. Of course, despite
being the holy grail of safety, failing to
implement them properly will expose their
own limitations. These failures include:
1 Failing to be guided by the learnings
of the leading metrics and using them
only to pad a scoreboard.
For example, concentrating on leading
indicators like participation rate of workers
in toolbox talks to get strong results on
paper (instead of putting eorts towards
engaging workers in these discussions),
can limit the benefit of the metric
and not drive the right behaviours.
2 Selecting leading indicators that are
not in line with the level of sophistication
of the companys safety program.
If a companys safety department is just
beginning to implement new programs,
focused mostly on compliance, using leading
indicators like time to complete corrective
actions, may be too advanced to yield
practical results.
At this beginning stage, workers need to
understand the importance of following
a protocol, so using employee perception
surveys to understand who does and does
not buy-in to the changing compliance rules,
will help identify your champion employees
and your employees that need more
education.
3 Targeting the wrong issues through
a lack of understanding of the contributing
factors that aect indicator performance.
For instance, if hand injuries are occurring,
it would be reasonable to monitor the use
of required PPE as a leading performance
indicator. However, if back injuries are
occurring frequently, clearly monitoring
the use of gloves as an indicator will not
add value. Ensure that the indicator
monitored is relevant to your employees.
4 Creating incentives that can be
manipulated to improve outcomes of the
indicator itself rather than its intended
purpose.
The moment there are financial
consequences attached to performance with
respect to an indicator there is an incentive
to manage the indicator, itself rather than
the phenomenon of which it is supposed to
provide an indication (Hopkins 2007: 13).
Leading indicators are popularly known to
contribute well to incentive schemes when
monitored carefully.However, if the initiatives
are in place simply to get a good score of the
leading indicator, rather than to improve
processes and guide actions, they may result
in a poorer safety culture. Workers may tend
to manipulate the numbers by over-stating
deficiencies, in order to cash out on
incentives. Therefore, it is important to
attach incentives to the process instead
of the outcome.
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 2A L I M I TAT I O N S O F L AG G I N G A N D L E A D I N G I N D I C ATO R S

There are strong business incentives to seek

improved safety performance, since safety
has increasingly become a competitive
dierentiator. However, it is rare to find a
company that is able to sustain continuous
improvement and not run into a
performance plateau.

Companies that successfully sustain

continuous improvement start by shifting
their focus from lagging to leading
indicators.

According to the National Safety Council and

Campbell Institute, while 89% of companys
viewed leading indicators as extremely or
very important, 61% of companies had an
imbalance in favor of lagging indicators, and
69% of companies had diculty identifying
corrective or preventative actions from
leading indicators.6

The results of the study show that companies

understand the importance of leading
indicators at a high level, but seem to have
diculty implementing and maintaining
them. The next section, Choosing the
Right Leading Indicators, will provide
further insight on how your company can
successfully select leading indicators prior
to implementing them across your EHS
department.

6 http://www.nsc.org/CambpellInstituteandAwardDocuments / WP -Transforming-EHS-through-Leading-Indicators.pdf
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 3

C H OOS ING TH E
R I GHT L EADING
IND ICATORS FOR
YO UR COMPANY
3A Determining Your Companys Maturity Level
3B Setting Company Goals
3C Setting SMART Goals
3D Choosing the Right Leading Indicators
 3 C H O O S I N G T H E R I G H T L E A D I N G I N D I C AT O R S F O R Y O U R C O M PA N Y

Unlike lagging indicators, which tend to be standard across

industries and sectors (albeit sometimes calculated dierently,
but thats a topic for another day), for leading indicators to be
eective, they must be designed to match your companys
safety culture.

The leading indicators you should use

depend primarily on the maturity of your
safety program and the goals or desired
outcomes you would like to achieve.

In this section, we have designed a test

to help you determine your maturity level.
Weve also provided guidelines on how to
set goals and created a list of leading
indicator suggestions that can improve
your probability of success.

The success of your leading indicator project

is heavily dependent on the maturity level
of your company. The more mature your
safety program is, the more in depth and
sophisticated your leading indicators are.

Weve designed a quick test you can

take to help determine your companys
maturity level. For the sake of simplicity,
weve divided the maturity level into three
stages: beginner, intermediate and advanced.

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 3A D E T E R M I N I N G Y O U R C O M PA N Y S M AT U R I T Y L E V E L

Please answer the questions in regards

to how often each practice takes place

H E A LT H & S A F E T Y ALL THE TIME MOST OF THE TIME SOMETIMES R A R E LY NEVER

PR ACTICES (4 POINTS) (3 POINTS) (2 POINTS) (1 POINTS) (0 POINTS)

1. ONSITE HA Z ARD
A SSESSMENTS*

2. FORMAL SAFET Y
AUDITS / INSPECTIONS

3. EVERYONE HA S THE
NECESSARY TO OL S OR
EQUIPMENT OR PPE TO
SAFELY D O THEIR JOB

4. CORRECTIVE ACTIONS
A SSIGNED, TR ACKED
AND CLOSED

5. REGUL AR TO OLBOX
TALKS / SAFET Y MEETINGS

6. EMPLOYEE FEEDBACK
COMMUNICATED ON
SAFET Y OBSERVATIONS,
OPP ORTUNITIES
OR THE SAFET Y
PRO GR AM OVER ALL

7. ONSITE WORKERS
ARE INFORMED
ABOUT SAFET Y
PRO CEDURES AND
P OLICIES

8. NEW EMPLOYEES
TR AINED OR SE A SONED
EMPLOYEES RETR AINED

TOTA L

TOTAL DIVIDED BY 8

* Conducted in line with the company safety policy and industry regulators, and/ or standards.

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 3A D E T E R M I N I N G Y O U R C O M PA N Y S M AT U R I T Y L E V E L

To calculate your maturity level, add up the scores from each

section and divide by 8. The number of points per section are
indicated in the brackets (0-4).

If you scored higher than a 3, then your

organizations safety program maturity
level is advanced.

If you scored a between 3 and 2, then

your organizations safety program
maturity level is intermediate.

If you scored lower than 2, then your

organizations safety program
maturity level is beginner.

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 3B S E T T I N G C O M PA N Y G O A L S

After determining your companys maturity

level, the next step is to set goals for tracking
leading indicators. Like other corporate
departments, its important to develop both
long-term and short-term goals aligned with
your maturity level.

For example, if the maturity of your

safety program is at a beginner level, your
long-term goal may be to focus on getting
your safety program up to compliance to
qualify for work in your industry.

If your maturity level is intermediate,

then your program is most likely already in
compliance with the minimum requirements
to qualify for work in your sector and
industry.

Your long-term goal may be to work on

complying with new safety management
standards such as: OHSAS 18001, ISO
45001, VPP or COR. Compliance with
these standards makes you a leader
in your industry and may provide your
company with a competitive advantage.

Finally, if your maturity level is advanced,

then you have probably gone beyond
meeting both the minimum and the industry
standard health and safety requirements.
Your goal, then, may be to lead your industry
by developing your own health and safety
management program, driven by continuous
improvement.

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 3C S E T T I N G S M A RT G OA L S
S M
SPECIFIC MEASUREABLE
Now that youve determined your long-term
goal, its time to work on smaller scale,
SMART goals for leading indicators. SMART
goal setting ensures each goal is (S)pecific,
(M)easurable, (A)chievable, (R)elevant and
(T)ime-bound. These SMART goals will be
crucial in eectively measuring the results
of your individual leading indicators and
determining the success of your entire
initiative.
There are a couple strategies you can use to
determine your SMART goals which we will
cover below. Its important, when creating
short-term goals, to ensure they align with
the executive goals of your company. Not
only will this help you gain executive buy-in,
but the data that SMART goals generate
will help prove the corporate value of
your safety program.
Here are a couple methods you can employ
to help set your SMART goals:
A R T
ACTIONABLE RE ALISTIC TIME BOUND
1 Look for holes in your existing
management system.
A great way to set goals for your leading
indicators initiative is to investigate the
holes in your existing program.
For instance, if you noticed that many
of your employees are lacking the proper
training they need, your goal for the year
could be to implement a 12 month safety
training program and measure attendance
and competence.
2 Analyze your lagging indicators against
industry averages.
Another way to set leading indicator
goals is to analyze lagging indicators
for improvement opportunities.
For example, if youve noticed that your
OSHA recordable injury rate is slightly above
your industry standard, then your goal for
the first year could be to reduce the OSHA
recordable incident rate to the industry
standard and most importantly, continue
to lower the rate for each of the next
five years.
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 3D C H O O S I N G T H E R I G H T L E A D I N G I N D I C ATO R S
Now that you have determined your maturity
level and set your goals, the next step is to
choose which leading indicators to track.
If this is your first time tracking leading
indicators, then it might be best to start
with tracking 2 to 4 metrics. Then, as your
program matures and your employees get
more comfortable with the new process,
you can try introducing more metrics.
To help you with this process, weve created
a kitchen sink list of leading indicators for
each maturity level and included it in the
appendix of this guide. This laundry list of
leading indicators is to give you guidelines
and suggestions based on what our customers
and other leaders in the industry are using.
How to Choose the Right Leading
Indicators for Your Company
If you are in the beginner maturity level and
trying to meet the minimum requirements for
safety compliance to qualify for work in your
industry, new employee training might be a
hole in your safety program. As such, your
goal would be to get all new hires completely
up-to-date on their safety training.
The leading indicator you could use to help
meet that goal would be to track the % of
new hires trained. Its simple, all you need is
A) the number of new employees in a period,
B) the number of training certificates required,
C) the number of training certificates
completed.
This data can usually be tracked using
Microsoft Excel, or if your company
has more than 50 employees, you may
consider the numerous software options.
Keep in mind that leading indicators can
be a trial and error process. You might think
that a particular leading indicator may be
useful in theory, but in practice, it may fail to
provide the information you need. Thats why
it is important to think long and hard about
the leading indicators that you use.
Here are a couple more things to consider
when choosing the right leading indicators
for your company:
3 Do not let lagging indicator reporting
keep you from trying leading indicators.
Experiment with leading indicators and
measure a few new KPIs under the radar
to figure out what makes sense for your
company. Leading indicators can often
be behavior based, with new measures
including 'activity or 'results' based
metrics in the Plan-Do-Check-Act Cycle.
Figuring out the true velocity of your
Plan-Do-Check-Act cycle will help you
identify choke-points in your process
or areas of weakness in your program,
team or culture.
1
PLAN
2
DO
4
ACT
3
CHECK
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 3D C H O O S I N G T H E R I G H T L E A D I N G I N D I C ATO R S

4 Constantly refresh your leading

and lagging KPIs.

Once you have experienced success

improving one particular metric, replace
it with a metric where you feel theres
significant room for improvement.

In our company, we started measuring

over 16 KPIs, whittled it down to 12,
and then ultimately 7 that work best
for us today. Looking back, half of the
7 were never even used 24 months ago.
Continuous improvement does not
sleep. Do not rest on your laurels!

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 4

H OW TO
S TART
T RAC KING
L E AD IN G
IND ICATORS
4A Tips for Successful Change Management
4B How to Track Leading Indicators
4 H O W TO STA RT T R AC K I N G L E A D I N G I N D I C ATO R S

Now that youve determined

your maturity level, figured
out your goals and the leading
indicators you want to start
tracking, the natural next step
is to actually start the tracking
process. If this is the first time
your company has tracked
leading indicators, then, as
the safety leader spearheading
this initiative, youll need to
do some change management
and get both executive and
employee buy-in for this to
be successful. In this section,
we will be providing tips and
best practices for change
management to help you
get the buy-in you need for
the initiative to run smoothly
as well as a step-by-step process
for tracking leading indicators.
Josh LeBrun, President & COO

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 4A TIPS FOR SUCCESSFUL CHANGE MANAGEMENT

Introducing new initiatives can be tricky. 2 Role Modeling

Many people are resistant to change and
afraid of the unknown. However, tracking
leading indicators will only result in
improvements in your safety program
if employees throughout your company
participate in either collecting the data,
analyzing it or executing changes.
Tracking leading indicators is not a
one-person process. It requires multiple
people to cooperate participate and
engage.
Here are four tips for successful change
management:
1 A Compelling Story
Ever heard the phrase: lead by example?
If you want your workers to track leading
indicators, then you must demonstrate
through your actions, attitude and activism
that the new way is the not just the right
way, but the only way. Make sure two-way
communication exists and remains ongoing
throughout the leading indicator initiative.
Acknowledge that you have received
the leading indicator data and let
your employees know that you are
acting on it. Employees are influenced
by fearless leadership, and leaders need to
recognize that paying lip-service to change
management activities yields sub-par results
while real actions drive positive outcomes.

As mentioned above, one of the reasons

why people are extremely reluctant to
change is the fear of the unknown. Change
is a movement into unchartered territory,
where the comfort of learned repetitive
activities is replaced with the anxiety of
new conditions.

In order to reduce this paralyzing anxiety,

try explaining the real, uninhibited reasons
behind the change. In other words, explain
how tracking leading indicators will help
improve your safety program and eliminate
hazards before they become incidents, not
after.

If employees trust that the decision to

change has been made for the right, logical
reasons, they will trust that the decision was
made by taking into account the pending
unchartered territory.

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 4A TIPS FOR SUCCESSFUL CHANGE MANAGEMENT

3 Reinforcing Mechanisms

One of the most dicult areas for

management is finding the right mix of
creativity and process. Too much process,
as most of us have experienced, can yield
bureaucratic results, while too little process
ill-prepares management and employees for
surprising, unfamiliar situations. In order to
successfully implement the changes needed
for tracking leading indicators, process is
required because of the repetitive nature
of the desired result.

Employees across the company need to

know exactly what process to go through
if a hazard is present, reducing ambiguity
and providing reinforcement of a successful
result. Also, acknowledge or celebrate
those who first embrace the process.
By acknowledging their success, you will
encourage those who are slower to adapt
to get onboard as well.

4 Capability Building Skill, Will

and Attitude.

Thats the mantra we use when hiring

at eCompliance. We only hire people who
possess all three but that doesnt mean
we cant all improve further. Change
management requires people to have
enough skill to implement the initiative
and that the company has the appropriate
tools to encourage success.

Managers and employees need to be trained

on the new leading indicator metrics, how to
track them and what to expect when doing
so. Training reduces the friction that inhibits
success and will provide you with a
substantial ROI.

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 4B H O W TO T R AC K L E A D I N G I N D I C ATO R S
Change management is only the first
step in operationalizing a leading indicators
initiative at your workplace. Now, you need
to actually start tracking them. This section
is designed to help you operationalize
tracking your leading indicators.
Here are some tips and best practices
to help you get started:
1 Set Target Performance Levels
Target performance levels should be used
as a benchmark against your actual results.
For example, if you have started tracking the
number of safety meetings, set targets
for the number you expect to have in a
given period. If you surpass your target,
management can be notified of the progress
and will be interested in the next goal that
you set.
Another thing to consider when setting your
target performance levels is the relationship
between your leading indicator metrics and
throughput. If the companys throughput
has doubled, any analysis of leading
indicators is likely to reflect the increase
in work activities. Ensure you are
understanding your corporate trends
when setting your target performance levels.
2 Collect Data
For eective execution of safety initiatives,
it is imperative that you collect data on
the underlying activities that make up your
leading indicators. This data should always
be integrated with the overall safety
management system.
Tracking leading indicators, whether it be
through the use of paper forms and excel
spreadsheets or a completely integrated
cloud and mobile software solution, should
be a crucial and unwavering part of your
routine safety activities.
While basic database and word processing
might be eective for small companies, with
more than 50 employees, a company should
invest in software that helps your safety
team collect, analyze and share data while
providing for two-way transparency and
engagement between management and
employees.
Frontline workers need the opportunity to
seamlessly communicate hazards or other
risks to management and management
needs the ability to react in real time to
correct problems that may lead to an
incident. Without these capabilities, your
company is taking on a significant amount
of risk and operating at a disadvantage.
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 4B H O W TO T R AC K L E A D I N G I N D I C ATO R S

3 Analyze the Data Additional Things to Consider:

In order for leading indicators to be eective,

once the data is collected, it must also be
analyzed by management. Go through your
data regularly. Check how your actual results
are comparing against your performance
levels. Keep an eye out for any outliers or
potential hazards that need to be addressed.
Look for any trends, either positive or
negative, and respond appropriately. The
leading indicator data is only as useful as
your ability to analyze and make changes
based on it. If you find that tracking a
particular leading indicator isnt eective
or isnt providing the useful information
you were hoping for, then change the metric.
While metrics are especially great for
management, they dont necessarily tell the
whole story. Its important not to forget the
story behind these numbers and to include
a story when sharing results across
the company.
Use KPIs and numbers to highlight themes
and contextualize real life stories that
you can use to paint tangible pictures for
both executives and frontline personnel.
Numbers, alone, can often lose people
to the core message and actions you
are inspiring.

4 Make Proactive Changes Remember, leading indicators can be

a trial and error process. The expectation
is not to get it right in one shot. Your safety
After you have analyzed your data, you have
program should strive to continuously
to act and make changes in order for leading
improve. As such, sometimes its best to
indicators to be eective. If you notice that
experiment with leading indicators before
the number of actual toolbox talks is lower
incorporating them into your formal KPI
than your performance target, talk to your
reporting for executives. If you are unsure
site supervisors about why meetings are
if a leading indicator will be eective or
being missed or not recorded. The real
not, try tracking it for a couple months
underlying reason is more important than
as an experiment without formally
the paper forms themselves.
reporting it up the chain.
If you notice that corrective actions are
If it proves to be useful, you can always
taking too long to close, talk to your onsite
start incorporating it into your KPI reporting
workers and supervisors about the issue and
for executives. If not, you can always revise
make sure you have the proper procedures in
the leading indicator until you find ones
place for responding to corrective actions in
that are most eective for your company.
a timely manner. Making changes is a crucial
part of the Plan-Do-Check-Act continuous
improvement cycle that leading indicators
support.

If you want to see drastic improvements

in your safety program and a drop in your
lagging indicators (such as time loss or injury
rates), you need to successfully act on the
information you receive from leading
indicators.

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 5

H OW TO
MEA S URE
S U CCESS
U S I NG L EADING
IND ICATORS
 5 H O W TO M E A S U R E S U C C E SS U S I N G L E A D I N G I N D I C ATO R S

Getting the right information from leading
indicators is only the first step in attaining
safety excellence. Companies must follow
up on the intelligence obtained from these
indicators and understand what truly
impacts the success and failure of
their companys safety program.
Before assessing the success of a safety
program, it is imperative to determine
how the company defines success of an
EHS initiative. As we have seen previously,
a companys EHS maturity level will strongly
influence the safety goals that are chosen.
Achieving these goals will determine the
success of the safety program at that point
in time. Therefore, it is vital for a company
to first determine the maturity level and their
goals, before a concrete definition of success
can be established.
To determine the impact of these leading
indicators on the goals, the company
requires an action plan. The fundamental
steps in developing such an action plan
include:
> Collecting the baseline (historical) data
for the safety performance if available;
> Using the baseline data to establish SMART
targets for each leading indicator (details in
section 4.2);
> Comparing the actual performance
against these SMART targets that will
establish the success of the leading
indicators.

The next natural question to ask is how do

leading indicators contribute to the success
of these goals and to the safety program
as a whole? Once a company has clearly
defined its desired safety goals, it needs
to choose the right leading indicators
that can best contribute towards
achieving them.

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 5 H O W TO M E A S U R E S U C C E SS U S I N G L E A D I N G I N D I C ATO R S

One way to determine the success of leading indicators is

to observe the inverse relationship they have with lagging indicators.
If you see an improvement in leading indicators, lagging indicator
results are likely to decline (figure below).

Together, leading and lagging indicators provide a solid,

bigger-picture perspective on what is and is not working is your
OHS management program.

% WORKERS # NEAR MISSES % PER 100 WORKERS

TRAINED R E P O RT E D WORKER S MEE TING PEER-TO-PEER
OB S ERVAT I ON TARG E T S
I N D I C ATO R S
LEADING

INCIDENT
PREVENTED

YR 1 YR 2 YR 3 YR 1 YR 2 YR 3 YR 1 YR 2 YR 3
L AGGING
I N D I C ATO R S

INCIDENT
OCCURS
% WORKPL ACE # DISABLING WCB PREMIUM
INCIDENTS INJURIES R AT E S

7 http://work.alberta.ca/documents /ohs-best-practices-BP019.pdf
P26
 5 H O W TO M E A S U R E S U C C E SS U S I N G L E A D I N G I N D I C ATO R S

The following examples will help you better Answering questions like the ones below
understand how companies may measure can help measure the current state of
the success of leading indicators: worker engagement:

1 Set Target Performance Levels > How many employees are showing up to
the pre-job safety meetings /toolbox talks?

> Are the workers contributing to the

discussions and giving their responses?
A BLR study found that over 45% of
safety professionals believe more than > Are the employees involved in the safety
10% of recordable incidents could have been decision-making processes?
prevented in the past year if employees were
more engaged in safety programs8. If a high > Are the employees being provided
level of employee engagement is the goal for with meaningful safety training after
the company, then success will be defined as their orientation?
attaining this target.
The next step is to set a SMART target for
Engaged employees not only feel a greater each of the measures based on historical
sense of loyalty and commitment to the data. For example, if all employees currently
company and perform at higher levels, do not have complete training, it is essential
but they are also enthusiastic and motivated for the company to actively address this
to help achieve the company goals. deficiency and ensure employees are
equipped with the knowledge they
Companies with a high level of engagement need to do their jobs safely.
report, on average, 22% higher productivity,
according to a new meta-analysis of 1.4 Once these deficiencies are addressed,
million employees conducted by the Gallup data on progress needs to be collected
Company.9 over a sucient period and compared
to the original targets to determine the
These are desirable outcomes for any success of the leading indicator. Based
company, but how can leading indicators on this example, the target was to ensure
help us achieve this? According to the action that every employee had received the
plan outlined above, the first step is finding most recent training.
the baseline of the relevant leading
indicators. Looking at how many employees have
successfully received this training will be
a measure of the success of the leading
indicator as well as its contribution to
the goal.

8 BLR eC Study
9 http://employeeengagement.com/wp-content /uploads /2013/04/2012-Q12-Meta-Analysis-Research-Paper.pdf
P27
 5 H O W TO M E A S U R E S U C C E SS U S I N G L E A D I N G I N D I C ATO R S

A leading indicator may

be the percent of trained
3 Quality and speed of communication
workers. Over time we see in the company
evidence (lagging indicators)
that more trained workers
translates into fewer Getting all employees on the same page
can be challenging. Every company needs
incidents/ less harm. In to create a concise communication plan
response, the organization that delivers clear messaging around its
provides more training. desired safety culture. A fast and ecient
feedback loop serves to inform, confirm,
and reinforce the value of the companys
10 commitment.

If improving the communication within the

safety department is a top priority and goal
TRAINED INCIDENT
for the company, then it is important to
WORKERS OCCURS interact with workers as much as possible.

Committing to meet workers twice a day

2 Speed of completing corrective
action items.
Well-designed corrective action programs
are essential for any company dedicated
to learning and improvement. Unless a
company actively manages actions to
correct its problems and implement
improvement opportunities, it will quite
likely suer needless recurrences of safety
incidents.
A company may set reducing the time taken
to implement corrective actions as a goal for
the safety department. Based on the action
plan above, they will first need to analyze
the baseline, which in this case is the time
currently being taken for corrective actions,
and use it to set a SMART target.
to provide updates both in the morning
and at night is one example of improving
communication, transparency and creating
the opportunity to receive employee
feedback.
Collecting historical and current data on
the speed of quality communication like the
number of workers actively participating and
engaging in such meetings can pave the way
for setting SMART targets.
If these targets are met within a specified
time frame, the leading indicator will have
been successful and, consequently, it will
have positively contributed to the EHS goal.

Tracking the time taken for the corrective

action to be passed on from one party to
another can be an example of the leading
indicator used for attaining the goal.

7 http://work.alberta.ca/documents /ohs-best-practices-BP019.pdf
P28
 5 H O W TO M E A S U R E S U C C E SS U S I N G L E A D I N G I N D I C ATO R S

4 Continuous risk reduction 5 Safety culture in the company

The hazards resulting from the range of

activities undertaken by an organization Studies show 90% of all workplace injuries
will vary in likelihood, severity and exposure. are based on attitude, behaviour and
The range, nature, distribution and culture.10 A true safety culture develops
significance of the hazards will determine when employees are motivated to
the risks that need to be controlled. perform their tasks in the safest way.

Mitigating safety risks is keyeverything Safety culture is dicult to measure,

from slips, trips, falls, and injuries from which means that identifying a goal is
moving heavy objects to vehicle collisions, both challenging and extremely necessary.
explosions, fires, and chemical exposures. Safety slogans are great, but creating a
Risk assessment and mitigation is one of the winning safety culture requires resources.
most important elements of a strong safety Improvements need to be made. Problems
program. need to be solved.

Therefore, companies may set risk If funding a safety project is a constant

assessments as a primary goal. The power battle, you may have one of two issues:
of the hazard analysis is to identify the risks either management doesnt value safety
of undesirable scenarios that could lead to improvements or you cant provide a
losses and negatively impact the measurable ROI. A well-organized safety
eectiveness of a safety program. culture rewards employees for proactive
behaviour and places an emphasis on
Determining the baseline for hazard analysis preventative safety.
can help identify the SMART target for the
company. Comparing leading indicators, Measuring current and historical levels of
like the number of completed hazard the safety culture through leading indicators,
assessments to its set target, will establish like responses in an anonymous survey or
how successful the indicator has been in outcomes of an incentive program, can
reducing risk for the company and in unravel current worker sentiments.
achieving its goal. Establishing SMART goals based on this
historical information and comparing it
Adopting technology and safety software to the actual results of newly defined or
that clearly links hazards to tasks and previously improved leading indicators,
incorporates easy to use hazard will determine your success.
assessments, can greatly improve a
companys ability to reduce risk and the Measuring health and safety performance
time taken to achieve targets without is a continuous process. But, like any other
adding extra administrative work. activity, measurements should be both
ecient and eective, so the frequency
with which it takes place can be planned
appropriately.

10 http://www.wsps.ca/ WSPS/media/Site/Resources /Downloads /HlthyWrkplcs_ComplGuide_FinalB.pdf?ext=.pdf

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 5 H O W TO M E A S U R E S U C C E SS U S I N G L E A D I N G I N D I C ATO R S

The single biggest

Having set concrete, measureable goals,
tracking their performance, and knowing
exactly what success looks like would make mistake organizations
gauging the success of the safety program
and the leading indicators very easy. It is make is to have too few
performance measures.
vital to continuously improve from one
stage of EHS performance to the next.
Ask yourself questions such as:
The second biggest is
to have too many.

> Does your orginization have safety goals,
that align and focus your colleaugues to a
common goal? Is it the right goal? Mark Graham Brown, Business Author

> What do you have to do dierently in the

next 24 months to make a step change in
safety performance?

> How do you measure what you need to

know to make the best management
decisions over the next 24 months?

Leading indicators will evolve if we think we

have gottten them right. We need to
clearly understand the concept of maturity,
goals, and success of leading indicators for
the EHS eorts to positively aect all areas
of business performance.

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6

THE
C O NCLUSIO N
 6 CONCLUSION

In order to continue to grow your company
and improve safety performance, it is
imperative for companies to start reducing
their focus on failure-focused measures
(lagging indicators) and draw their attention
to continuous improvement leading indicator
metrics.
Implementing leading indicators in a
company is not an overnight task. It takes
time, patience, analysis and understanding
to ensure you are setting your safety
department up for success.
From the initial sections of this document,
you were able to understand why leading
indicators are important, the limitations
that exist and what level or stage your
company is currently in.
After having read through the document, we
hope to have communicated that there will be
a fair share of experimenting when implementing
leading indicators. There isnt a one size fits all
policy when dealing with safety for a company.
What works for one company may not work for
another and what doesnt work for your competitor
may work for you. You should keep an open mind
and let yourself run a trial and error process when
beginning implementation.
Reference this document as a helpful resource
for your planning and execution and as always,
if you are invested in utilizing the benefits of
technology to help you execute on your
safety goals, please visit:

Taking the information at face value will help

you understand the importance of leading
indicators, but it wont let you realize the ecompliance.com/health-and-safety-software
benefits of implementing them.

In the latter part of the guide, we walked you

through a proposed implementation process
that prepares you for change management.
Change in any company can attract a level
of reluctance from employees no matter
how big or small it may be.

As a safety leader or professional

that is spearheading the success of
the department, it is imperative to not
only implement the change, but also
communicate its eectiveness and
benefits to those around you.

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 7

THE
A P PEN D IX
 7 APPENDIX

GOAL S
1 BEGINNER

To meet the minimum requirements for safety

compliance to qualify for work within your
industry/ region.

L E A D I N G I N D I C ATO R S

safety meetings completed

completed inspections
of completed hazard assessments
employees trained
training hours (per employee, per site, per time frame)
non-conformances on site/ operations
non-conformances with policies or procedures
near miss reports

OHS legislation addressed by procedures ie) level of compliance to standard

of

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 7 APPENDIX

GOAL S
2 INTERMEDIATE

To bring your safety management system up

to an industry standard and improve your relative
safety performance within the industry.

L E A D I N G I N D I C ATO R S

proactive risk or hazard identifications recorded

positive safety acknowledgements given to team (aka safety opportunities)
people trained in hazard identification
of
training gaps (courses or certificates) outstanding at period end across workforce
training hours (per employee, per site, per time frame)
safety procedure/ policy documents read across entire company
unsafe observations recorded by trained person
risks by specific category (e.g. fall protection, confined space, housekeeping, etc.)
corrective/ preventative actions recorded
corrective/ preventive actions relative to sta count
new assessments for changes in processes or equipment
incidents with a root cause that includes lack of training and frequency of audits performed
near miss reports

sta read acknowledgments for roles and responsibilities

completed toolbox talks (planned vs actual)
risk assessments completed per schedule/plan
of

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 7 APPENDIX

GOAL S
3 ADVANCED

To become a safety leader in your industry by

defining your own safety management system
driven by high velocity continuous improvement.

L E A D I N G I N D I C ATO R S

safety meetings attended by non-safety personnel

safety procedure/ policy documents read by non-safety personnel
sta read acknowledgements for roles and responsibilities
of
completed toolbox talks, planned vs actual
proactive safety opportunities recorded
recognitions for safe behavior
repeat findings
assessments to evaluate potential severity
unsafe observations reported per employee per time period
gaps in the hazard identification process
incidents with a root cause related to inadequate risk assessment
assessments deemed unacceptable to EHS manager (ie. sent back for re-submission)
corrective actions prioritized by risk (e.g. high severity, low severity, life-threatening, etc.)
facilities experiencing >X % turnover
comparisons with predictive measures to performance outcomes
predictive measures meeting performance outcomes

how frequent OHS briefings/ meetings occur

participation rate for safety meetings
ratio of unsafe to safe observations
of Average # of days to completion on corrective/preventative action
residual risk score change vs last period
correlation rate between your top leading and top lagging indicators

sta who believe safety is a priority for management

job/ risk assessment tasks completed
corrective/ preventative actions overdue vs. on schedule
preventive and corrective actions communicated to sta
ratio of corrective actions according to hazard type (e.g. confined space, fall protection, etc.)
predictive measures meeting performance outcomes

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