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:
In theory, these generalizations sound reasonable enough. However, 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 these 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.
KPI lagging indicators in aviation safety programs:
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 managers feedback about the 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 to offer value to most areas of the operations, whether you are simply wishing to improve ramp safety or reduce financial loss from unmonitored 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 don’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 does not indicate why the changes happen.
Lagging indicators exemplify the phrase “past successes/failures are not future guarantees.” Concerning their usefulness:
While there are countless KPIs that aviation SMS could use – each program will necessarily use different KPIs based on their specific needs, goals and objectives. Some great aviation KPIs that involve lagging indicators are:
There are considerably more lagging indicator KPIs that can be used, but the more specific the KPI, the better.
KPI leading indicators in aviation SMS:
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:
For this reason, KPI leading indicators are easier to influence because they simply involve changing how much something is being done. Yet 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.
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:
When it comes to choosing great aviation SMS KPIs:
Developing superior KPIs will take time, research, and experience, as well as a solid understanding of an organization’s unique lagging and leading indicators.
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 assume 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 benefitted 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:
These stand-alone point solutions may be great for their singular purpose. However, a well-designed SMS database satisfies all SMS documentation requirements in a single system. This configuration allows superior data mining opportunities and reduces 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 only need to "check the box," don't spend 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.
Last updated August 2024.