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Why the Focus on Lagging Indicators Isn’t Working

Published by Mike Goddu at September 10, 2014
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Why the Focus on Lagging Indicators Isn’t Working
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Why the Focus on Lagging Indicators Isn’t Working

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September 10, 2014


"We can change our relationship to these indicators such that they are no more than a historical record, and are not taken to represent the presence or absence of safety. Instead, better indicators of the presence of safety would include discussions on the efficacy of our processes, organisational learning from mistakes and incidents, continuous improvement of procedures and systems, and active worker engagement."

If industry leaders are going to make a significant improvement in preventing fatalities, life threatening injuries and destructive process incidents, it is essential for them to alter the relationship people in our industry have to lagging indicators of safety performance.

(By relationship, I mean the way we respond at an automatic, gut level to news of an injury or incident.)

Instinctively, when an incident occurs, most of us would feel concern for the well-being of the individual involved, and we’d want to know if he or she is okay.

But our relationship to the incident is different if such an incident increases a ratio such as the Lost-time injury Frequency Rate (LTIFR) or Total Recordable Injury Frequency Rate (TRIFR) that is recorded, published and affects perceptions of our safety performance as a manager.

If our promotion prospects, reputation, pay, bonus and even contract renewal with a client are affected by changes in ratios, any normal person will do their best to reduce the numerator any way they can.

I believe most managers in industries where people get hurt would say (privately, if not publicly) that statistics like the Lost Time Injury Rate are only records on a spreadsheet of something that happened in the past, and not much more. The decision to designate an incident as ‘recordable’ often involves lengthy discussions that have little to do with people’s safety. But because “you manage what you measure,” these statistics get elevated in importance. People are drawn to relate to them as if they represent the real presence or absence of safety on a site right now.

For example, a safety manager recently told me, “Do you see how LTIs are going down all over the place? It’s not that safety is improving. It’s because we’ve gotten so good at ‘managing’ people back to work. I give the guy a laptop in his bed and tell him to do some training. I need these numbers to win work from the multinationals. And the client wants to keep the numbers low because of their bonuses and reputation.”

Many leaders I speak with find themselves pulled into such unproductive numbers management. The statistics have become ends in themselves, distracting attention away from what would enhance the organisation’s understanding of what is working or missing around safety.

Here is an example: a safety manager at a major contractor told me that while his TRIFR rate has been declining over the past couple of years and been the focus of a lot of attention by their clients, his worker’s compensation cost has not moved. His attention has been more on managing the numbers than real safety.

Workers in the Western Australian mining industry were fortunate enough not to suffer one fatality during the two year period from August 2011 to August 2013. We heard many commentators saying that we had perhaps reached a golden age where fatalities were a thing of the past. Since then, however, five people have died in this industry over the past year.

A mining executive commented to me recently on this anomaly: “Did we really do anything different for those two good years?” he asked. “I can tell you about all kinds of near misses that almost killed someone during that time. I say we were just lucky.”

A safety professional I know with a long history in the Australian coal mining industry had some difficult things to say about the relationship his peers have to the statistics:

“Safety professionals are hammered (and I really do mean hammered) to ‘get safety performance to an acceptable level’, and often the reality is that this level, (although branded Target Zero or Zero Harm), often covertly means beating last year’s figures or beating those set by the government. This is often how they measure success.

JMJ suggested that perhaps there was a bigger opportunity here. Rather than just reinforcing the rules, what might provide a better overall outcome?

Rigid management systems, built on compliance and unrealistic, valueless KPIs [Key Performance Indicators] often take up so much of their time that when they go into the field, they are always looking for the negatives rather than the positives. That way they can prove that they have found so many ‘improvement areas’ and can ‘get them fixed’ and look good.”

Sidney Decker, a well-known academic in the field of safety, talks about ‘bureaucratic entrepreneurialism’, where safety departments have become ever larger to manage and analyse the numbers and produce the reports required by the organisation.

What about leading indicators? Many companies measure ‘worker engagement’ or ‘safety culture’ by the number of safety observations made on site over a particular period as part of their behavioural based safety programmes.

When you speak with the workers and supervisors making these observations, however, it becomes clear that for many, their relationship to the observation cards is ‘tick and flick’. Some companies even have to incentivise workers to get their card filled in to make up the weekly stats.

It is hard to imagine how such an exercise could be relied on to uncover the next potentially fatal hazard.

In summary, I doubt we are going to get rid of the link our industries make between changes in lagging safety indicators and perceived safety performance anytime soon. The bureaucracies that demand these numbers will need feeding until there is a consensus for them to stop.

But we can change our relationship to these indicators such that they are no more than a historical record, and are not taken to represent the presence or absence of safety.

Instead, better indicators of the presence of safety would include discussions on the efficacy of our processes, organisational learning from mistakes and incidents, continuous improvement of procedures and systems, and active worker engagement.

I believe it is the work of leaders to cut the link between statistics and safety in the minds of their people, and get their attention on doing what works. That is going to be hard given how much attention and money relies on the stats. But, as a client told me,

“If you focus on the right things you guys teach in IIF [safety], the stats will take care of themselves.”

RELATED: The Hallmark of a Well-led Organization: How Well it Responds to Incidents and “Failures”

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We can change our relationship to these indicators such that they are no more than a historical record, and are not taken to represent the presence or absence of safety. Instead, better indicators of the presence of safety would include discussions on the efficacy of our processes, organisational learning from mistakes and incidents, continuous improvement of procedures and systems, and active worker engagement.

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Mike Goddu
Mike Goddu Author
Michael co-founded JMJ in 1987 and has more than 25 years of industry and consulting experience. In the early 90’s, Mike developed the firm’s High Performance Projects practice, and has led numerous commercial and government engagements for JMJ, including Bechtel Group’s work during the rebuilding of Kuwait following the 1990-91 war; petroleum and chemical projects for Chevron in the U.S. and Middle East; alignment and leadership development for multi-billion (USD) chemical plants in Venezuela, Saudi Arabia and Kuwait; and alliance development and project execution for a $3 billion (CD) Shell refinery project in Canada.
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