What is a Key Performance Indicator in Aviation SMS?
Key performance indicators (KPIs) are data metrics used to track performance in aviation safety management systems (SMS). This “performance” was not intended to measure only safety, but also quality and financial performance as well.
Understanding what is a key performance indicator is an essential component of being able to identify signs of good KPIs.
Here are the 4 most important things you need to understand about what KPIs are (ideally), and how KPIs are used in aviation SMS:
- KPIs directly reflect performance of company safety goals and objectives;
- Key performance indicators show only the “key” data – the most important data for operational performance;
- A KPI is always SMART (specific, measurable, achievable, relevant, and time-bound); and
- KPIs are organization-specific, which means every organization will have a unique list of KPIs, as well as many shared industry-relevant key performance indicators to compare performance across their industry.
Understanding the above uses and purpose of KPIs is essential for recognizing good key performance indicators. Almost without question, companies botch their KPI list simply due to misunderstanding the purpose of KPIs.
Related Articles on Key Performance Indicators (KPIs) in Aviation SMS
- What is a Key Performance Indicator (KPI) in Aviation SMS?
- How to Set and Monitor Key Performance Indicators (KPIs) in Existing SMS
- How to Automate Key Performance Indicator KPI Monitoring
Here are 5 Signs of good KPIs.
Many KPIs are Leading Indicators
Leading indicators in aviation SMS are the underlying causes and forces that drive organizational safety performance. For example, yearly turnover rate is a great leading indicator because new employees pose much higher risk than veteran employees, and high turnover is symptomatic of other problems.
Some of the reasons leading indicators make great KPIs is that they tend to be:
- Very specific;
- Very indicative of performance; and
- Help you understand why safety occurs as it does; and
A good list of key performances indicators will be leading indicator heavy, though having some lagging indicators will be necessary as well. You can easily distinguish a leading indicator from a lagging indicator because:
- Lagging indicators are historical data;
- Leading indicators are usually characterized by percentages and rates (i.e., % of employees…, and turnover rate); and
- Leading indicators help explain why historical data happened.
Related Articles on Leading Indicators in Aviation SMS...
- How to Use Leading Indicators in Aviation SMS
- 8 Aviation Leading Indicators That Successful SMS Measure
- Understand Aviation SMS KPIs Lagging and Leading Indicators
KPI Touches on Every Level of Organization
Another sign of a good KPIs is that the safety metric is relevant to more than one organizational level. For example, the KPI % of employees over 5 years in company is relevant to front line employees, mid management, and upper management.
One of the reasons KPIs should ideally address multiple organizational levels is that goals and objectives are for the most part company goals and objectives. Since KPIs are built on goals and objectives, they should follow the same pattern.
KPIs should be level-specific only when a particular safety goal is level specific. Consider the company objective: "Safety management performance average on-time closure rate will be 90% or more." The KPI Percent on time safety issues' closure will mainly affect safety management, which is okay in this case because its parent objective is only for safety management and the accountable executive.
Safety KPIs are especially important to the accountable executive to monitor the performance of the SMS. These safety KPIs help accountable executives fulfill their responsibility to the SMS by:
- Ensuring the SMS is properly implemented and performing in all areas of the organization;
- Regularly reviewing organizational safety performance; and
- Directing actions necessary to address substandard safety performance.
Your KPI List Isn’t Long
Without question, this is the most common mistake in organizations. In the realm of key performance indicators, more is not better. When companies have too many KPIs, it indicates that:
- KPIs have not been considered enough;
- Certain metrics are dated and no longer relevant;
- Company lacks sophisticated aviation safety management system software or an aviation safety database to monitor sophisticated metrics;
- Company is trying to compensate for quality with quantity;
- Safety management and upper management do not understand what KPIs are;
- SMS program is a showpiece to "check the box"; and
- Goals and objectives are unclear, not specific enough, and need to be revised.
On the other hand, a succinct list of KPIs usually indicates:
- Monitored safety metrics align directly with parent goals and objectives;
- Safety metrics are sophisticated and "cover a lot of ground";
- Safety management and upper management have a solid understanding of SMS needs; and
- Goals and objectives are high quality.
How to know if you list is too long? There is no one size fits all approach. Smaller aviation service providers may have 7-10 key performances indicators. Larger operators may have double or triple that number (though not necessarily).
Related Articles on Aviation SMS Goals and Objectives
- How to Shape Your Corporate Vision with Aviation Safety Goals and Objectives
- 3 Goal-Setting Tips for Aviation Key Performance Indicators
- Safety Chart: Maintain Monthly Aviation SMS Hazard Reporting Goals
SMS KPIs are Updated Regularly (and Updates are Documented)
Your SMS' key performances indicator list is less of a “list” than it is an ongoing process. Company objectives will change over time, and KPIs will need to be updated in accord with those changes. When we talk about “updating” KPIs, this means:
- Evolving metrics;
- Removing metrics; and
- Adding metrics.
Updating KPIs is like spring cleaning – suddenly your old stuff looks much more useful and valuable than it actually is. It’s easy to develop a personal attachment to your KPI list. You depend on them. You may have spent considerable organizational effort developing and agreeing on these KPIs. They may have served you very well over the past few years. Some of the hard things about updating KPIs are:
- Updating KPIs can be time consuming and resource intensive;
- Seeing metrics everyday can make you “blind” to their actual usefulness;
- Researching organizational pain points and developing associated goals requires safety teams to redirect their focus from day to day activities;
- Agreeing on KPIs in a "safety committee" setting requires patience and work;
- SMS' KPI dashboards may not be flexible enough to represent changes and require IT departments to facilitate the change;
- Changing KPIs may confuse management not in the loop of updating KPIs; and
- Becoming “attached” to KPIs, even when their value is spent.
In addition to immediately updating KPIs as goals/objectives are updated, a yearly or semi-annual “cut-throat” inspection of KPIs should be sufficient to keep KPI lists current. Moreover it’s a very good idea to have a review log for each KPI, showing:
- The date of the most recent review;
- If changes were made; and
- What changes were made.
This is the kind of fantastic documentation that is impressive to SMS auditors and extremely helpful for new management to recover during management turnover. One of the best signs of good KPI management skills is that they have a thorough documentation.
Understanding KPI Data Management Requirements
Effective KPI management requires superior data management capabilities that exceed simple spreadsheets and paper. KPIs don't magically appear from out of the blue. Data must be gathered, sorted, stored, classified and retrieved in a usable format. Using spreadsheets to manage KPIs is a recipe for disaster. You may get by with spreadsheets in a very small organization with fewer than 40 employees, but still, this will be a lot of work and this KPI management process is not sustainable.
Related Articles on Using Spreadsheets in Aviation SMS
- See How Spreadsheet Not EASA Compliant Aviation Hazard Reporting Database
- 5 Things Spreadsheets Can't do For Your SMS
- Spreadsheets vs Software for Aviation Safety Management
You may have seen the reference to KPI dashboards early on. KPI dashboard data typically originates from an SMS database and definitely not spreadsheets. Using spreadsheets to manage KPIs is a sign that you don't know what you are doing. I'm a data management expert and I can confidently make that assertion.
KPI dashboards should be directly linked to operational safety data to provide management with actionable intelligence to facilitate effective decision-making processes. When aviation service providers have an SMS database that provides value to the entire organization versus only the safety department, then you will see additional benefits, including:
- Less resistance to change from difficult managers;
- More accepting attitudes toward the SMS;
- Heightened confidence from the accountable executive regarding SMS performance monitoring;
- Better decision-making across the entire organization vs only the safety department;
- SMS becomes a profit driver to reduce costs from damaged equipment or injuries;
- Additional opportunities become available as management can narrow their focus on key organizational objectives.
An incredibly good sign of good KPI management is the adoption of an integrated SMS database. We are not talking about point solutions that are "one-trick ponies," such as a safety reporting system or an auditing solution. An integrated database has the capability of managing all required SMS documentation requirements and not simply a small section of the SMS.
Having SMS data in a single, centralized database is the most sustainable option for effective KPI management. Auditors are impressed when they see breadth and depth of your KPIs that may span across all four pillars of an aviation SMS. If you want to appear professional and look like you know what you are doing, then get an SMS database to manage your KPIs.
Helping Accountable Executive with Readily Available KPIs
There are several low-cost, commercially available SMS databases that make KPI management exceptionally easy. I'm not wanting to imply that your KPIs will magically appear from the sky using an SMS database. There are many preliminary activities and data management tasks that need to be performed before KPI analysis and report generation begins, including:
- Obtaining safety report and audit finding data;
- Classifying the data;
- Ensuring metadata is accounted for (date of activities and who performed them); and
- Retrieving and analyzing safety data; and
- Preparing data in usable format to display to management.
Accountable executives need actionable and demonstrable KPI reports to fulfill their responsibilities to the SMS. KPI report data allows accountable executives to monitor SMS performance. If I were the accountable executive, I would prefer to find KPI reports when I needed them, i.e., that is, get KPI reports on demand.
When I refer to "on demand," I'm not referring to this example:
I'm the accountable executive and want to monitor my SMS. I think I better call up the safety team and have them prepare some reports that we can discuss next week.
This example is not an "on demand" report. How about this scenario:
I'm the accountable executive and want to monitor my SMS by logging into the SMS database and review SMS performance KPIs in real time. "Real time" means that these are not canned reports, but are created on the fly using the most recent SMS data.
If I were the accountable executive, I would prefer to have a transparent SMS where I could inspect the performance of the aviation SMS whenever the thought occurs to me, regardless of whether I'm in:
- my office drinking coffee;
- sitting in a safety committee meeting; or
- laying on a beach chair in Hawaii.
An SMS database offers assurance to the accountable executive that SMS activities are not slipping. When you are making the business case to management for SMS budgets, make sure you include that your SMS database benefits the accountable executive. You will notice that there will be less resistance to your budget proposal.
Related Aviation SMS Database Articles...
- What is an Aviation Safety Database
- How to Choose the Best Aviation Safety Database Software
- How to Manage Aviation Safety Programs without Complex SMS Databases
Strangers Can Understand Which KPIs Align with Which Objectives
Aviation key performance indicators are built upon company safety goals and objectives. When a performance indicator does not correspond directly to a safety goal or objective, that KPI needs to be updated.
Like parent goals/objectives, key performance indicators in aviation SMS should:
- Be short, medium, and long term in scope;
- Be SMART; and
- Be strongly justified.
There should be no question about why a particular KPI metric is included in the list of KPIs. A great sign of a good key performance indicator is that anyone – such as a new manager – would have no trouble establishing:
- Why a metric is listed as a KPI; and
- Which KPIs correspond to which objectives.
Quick Tips to Align KPIs With Goals and Objectives
One tip is to list create a table with one column listing goals and/or objectives, and the other column write down the corresponding KPI or KPIs. When an objective has no corresponding KPI, consider which data points will allow you to measure the performance of achieving the objective. Your KPI must be realistic in that you require stored data to be able to retrieve the data and monitor KPI performance.
Another tip is to give your list of KPIs and your list of objectives to a colleague and see if they can accurately establish which objectives each KPI is created for. Another set of eyes will be useful because there is a human tendency to have our blinders on when dealing with goals and objectives. We become so focused on a defined goal or objective that our minds require a nudge to "snap us out of it" and see
- the big picture; or
- another aspect to the same problem; or
- contributing elements to another unrelated issue.
Final Thoughts on Signs for Good KPIs
Good KPIs help the organization accomplish a particular task. If the KPI is not helpful, then it should be dumped.
Grabbing a list of prepared, industry-specific KPIs is useful for inspiration. Don't use KPIs from other organizations unless they actually align with your company's goals and objectives. More does not equate to better.
KPIs are a hot topic in aviation SMS. Safety managers feel obligated to come up with a KPI list to demonstrate to management and regulatory authorities that they know "what they are doing." When you have too many KPIs, this is an obvious indicator that you don't know what you are doing.
- Keep your KPI list short.
- Ensure each KPI aligns with company goals and objectives.
- Focus on helping accountable executive achieve his goals with your KPIs to monitor the performance of the SMS.
A full-featured SMS database helps the accountable executive achieve his SMS objectives. If you need assistance with managing and monitoring KPIs, we can help.
Not ready for a live demo of an SMS database? Watch these demo videos instead.
Aviation KPI Examples to Download
Here are several lists of potential KPIs that should help you become fluent in identifying signs of good KPIs in aviation SMS:
Published March 2017. Last updated January 2019.