SMS Pro Aviation Safety Software Blog 4 Airlines & Airports

Understand Aviation SMS KPIs Lagging and Leading Indicators

Posted by Tyler Britton on Mar 16, 2019 6:00:00 AM

Why Aviation KPIs Lagging and Leading Indicators Are Important

Aviation SMS KPI Leading Lagging Indicator

Lagging and leading indicators for aviation safety management systems (SMS) key performance indicators (KPIs) are often confused or misunderstood.

Even various online sources have conflicting, vague, or incomplete explanations of the difference between lagging and leading indicators.

Obviously, understanding how to select aviation SMS KPIs is extremely important, and it’s a topic that often generates much interest from all levels of the aviation safety industry. Developing a solid list of lagging and leading indicators is the process of understanding:

  • The historical performance of the SMS implementation; and
  • The critical safety factors that influence that performance (i.e. that will influence it in the future).

In theory, these generalizations sound reasonable enough, but in the actual practice of choosing aviation key performance indicators they are considerably less clear. This is because there are literally hundreds of safety metrics that managers can choose to monitor, and sorting out which leading and lagging KPIs to focus on can be daunting. For this reasons, lagging KPIs tend to receive more attention because they are easy to measure and are visually more impressive to represent than their leading indicator counterparts.

Here’s what you need to know about what lagging and leading indicators are in aviation SMS, and how to adopt good aviation SMS KPIs based on those lagging and leading indicators.

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What Are Lagging Indicators in Safety Programs?

KPI lagging indicators in aviation safety programs:

  • Are the “output” of the program;
  • Show past safety data;
  • Characterize the historical SMS performance;
  • Often they are easy to measure but difficult to improve.

Lagging indicators are useful for monitoring the "output" performance of an aviation SMS.

Safety output is the self-evident data of the SMS. For example, a lagging indicator metric would be the number of reported safety issues year over year.

Another way of looking at it is that lagging indicators give safety mangers feedback about historical performance of a monitored business process, whether the process belongs to the safety department or a business unit.

SMS data should not be hoarded by the safety department. SMS data has the potential for offering value to most areas of the operations, whether you are simply wishing to improve ramp safety or reduce financial loss from un-monitored hazards.

Lagging indicators provide actionable decision-making data. It is up to the safety team to communicate with department heads to determine how the data can benefit the organization.

Lagging indicators answer the WHAT of how the SMS is performing, but doesn’t necessarily answer the WHY of performance. It is for this reason that lagging indicator KPIs are easy to measure but hard to improve. For example, the number of reported issues will change every year, but that metric gives no indication of why the changes happen.

Lagging indicators exemplify the phrase “past successes/failures are not future guarantees.” Concerning their usefulness:

  • Lagging indicators should be taken at face value, and demonstrate SMS performance; but
  • Should influence which leading indicator KPIs are focused on.

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Examples of Great KPI Lagging Indicators in Aviation SMS

While there are many countless KPIs that aviation SMS could use – and each program will necessarily use different KPIs based on their specific needs, goals and objectives. Some great aviation KPIs that involve lagging indicators are:

  • Various metrics about safety reporting;
  • CPA and Hazard Issue average closure times vs. goals;
  • Percentage/frequency of Acceptable, Mitigatable, and Unacceptable issues;
  • Revisions of procedures in the last period;
  • Compliance findings to show differences between procedure and practice;
  • Number of defective list items combined with extra equipment list (indicates availability of spare resources); or
  • Planned crew vs real crew per shift.

There are considerable more lagging indicator KPIs that can be used, but the more specific the KPI, the better.

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What Are KPI Leading Indicators in Safety Programs?

KPI leading indicators in aviation SMS:

  • Are the “input” of the program;
  • Identify precursors and indicate future performance;
  • Identify technical or organizational weaknesses; and
  • Identify warning signs.

Many leading indicators involve metrics of what managers put into the program, hence “input” of the program, and are generally associated with proactive risk management. A useful way to think about it is:

  • “How much” something is being done (i.e., how often are audits done);
  • Or behavior that involve acting on a program (i.e., average time to implement actions).

For this reason KPI leading indicators are easier to influence because it simply involves changing how much something is being done, but the value of leading indicators is difficult to measure.

Care is required when evaluating leading indicators because leading indicators in and of themselves are generally not very useful – but they become extremely useful when correlated with lagging indicator performance data. For example, correlating the number of internal inspections (leading) with critical-risk reported safety issues (lagging).

Successfully correlating leading indicators metrics involves hunches, experience, and assumptions by aviation safety managers.

Examples of Great KPI Leading Indicators in Aviation SMS

A great strategy for quickly identifying leading indicator KPIs is to look at the aviation SMS' lagging indicator data and ask questions about that data. These questions are a good place to start when considering leading indicators.

Some examples of great KPI leading indicators in aviation SMS implementations that can be strongly correlated with lagging indicators are:

  • Percentage of employees receiving communication training;
  • Percentage of training that includes competency testing;
  • Average turnover rate (%) in the organization;
  • Average number and percentage of accidents per employee per year;
  • Number of safety audits per year;
  • Increase in safety percentage per year (%);
  • Average time to implement actions on complaints; and
  • Percentage of CPA and reported issues closed on time.

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Passive KPIs, Active KPIs, and Superior KPIs

When it comes to choosing great aviation SMS KPIs:

  • Leading KPIs are active actions on the SMS;
  • Lagging KPIs is passive (historical) information about the SMS; and
  • The most superior KPI will be a combination of a lagging and leading indicator.

Developing superior KPIs will take time, research, and experience, as well as a solid understanding of an organization’s unique lagging and leading indicators.

Final Thoughts - Data Management Requirements for SMS KPI Data

Based on the SMS data management of hundreds of aviation service providers for over a dozen years, we have seen that KPI management requires significant data management capabilities for SMS documentation requirements.

Leading and lagging indicators assumes the organization has significant historical safety data to mine. Unfortunately, many aviation service providers are still managing SMS data in spreadsheets. If this is you, you won't be benefiting much from this discussion.

To get the most value from your SMS data, it should be stored in an SMS database specifically built for the purpose. There are many stand-alone point solutions, such as:

  • Hazard reporting system;
  • Auditing system;
  • Training management system, etc.

These stand-alone point solutions may be great for their singular purpose, but a well-designed SMS database satisfies all SMS documentation requirements in a single system. This configuration allows superior data mining opportunities and reduce your SMS' complexity.

Configuring KPIs and instantly accessing KPI lagging indicators will turn your safety department into a department that adds financial value to the organization instead of a hole which SMS budgets are dumped into. If you are only needing to "check the box," don't spend any more money than necessary. Otherwise, if you are earnest in obtaining financial value from your SMS, I recommend a low cost, commercially available SMS database.

Learn more about the capabilities of an SMS database with these short videos.

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KPIs for Lagging and Leading Indicators

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Published June 2016. Last updated March 2019.

Topics: Key Performance Indicators

Site content provided by Northwest Data Solutions is meant for informational purposes only. Opinions presented here are not provided by any civil aviation authority or standards body.

 

 

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