Assessments of performance in an organization are sometimes driven by stories, reports and observations of failure. This approach to decision-making is driven by lagging indicators of an organization’s overall performance and is by nature reactive.
An alternative approach to performance management focuses on efforts to anticipate issues before they occur or grow in size and complexity through tracking leading indicators of performance.
A balanced approach to performance management considers both leading and lagging performance metrics.
Leading indicators of performance are also described as upstream, positive, heading or predictive; they generally focus on efforts to address potential safety issues before there’s a negative consequence. If organizational safety management is being measured, examples of leading indicators include safety-related training, audits of safety-focused processes, safety inspections of equipment and facilities and employee safety-perception surveys.
Conversely, lagging indicators are trailing or outcome-based; they include tracking injuries and fatalities, calculating cost of property damage and medical costs to employees after injuries, and claims or lawsuits as a result of employee injuries and deaths (Campbell Institute, 2013; Blair & O'Toole,2010).
While it’s important to know that lagging indicators of performance are improving, focus on lagging indicators is in essence focusing on the symptom while not necessarily addressing the problem.
An example of this is the goal of reducing line-of-duty deaths in the fire service. While honorable, this lagging indicator in and of itself does little to actually address the root causes of line of duty deaths.
Overexertion is listed as the top cause of firefighter fatalities, unfortunately, but this lagging indicator does little to address the lack of medical evaluations, training on decision-making provided to supervisors or the size of the work group assigned to the task that contributed to the overexertion. The percentage of responders who receive a medical evaluation could be considered one such a leading indicator.
In theory, as leading indicators increase, lagging indicators should decrease.
While addressing acute problems is often the role of workers and supervisors, chronic problems generally find their way to administrators. There’s a temptation to simply attack the problem after it has occurred, looking for methods to resolve it. There’s value in seeking approaches to prevent recurrence at the same time.
Paying increased attention to leading indicators is often an effective method of avoiding or reducing the frequency or severity of incidents, as well as the associated pain, suffering and cost. This doesn’t suggest that lagging indicators have no value, because it’s difficult to know if leading indicators are having an impact on problem areas without paying attention to both leading and lagging indicators of organizational performance.