Not All Metrics Are Created Equal
Kelvin Roth
April 24, 2013
Companies frequently rush out and identify all environment, health and safety (EHS) data that are easy to measure, and then collect the data without considering why they are gathering it. There’s a lot of data out there, and with the support of software tools it’s getting easier and easier to collect more and more of it; too easy, perhaps, as we may not have fully considered the value of this data.
Once the data begins to flow in, we compile it, verify it and analyze it. We discuss whether they are leading or lagging metrics, whether the metrics are complete or accurate enough, and whether they are fair or accurately weighted. But, at a certain point, we EHS leaders are often left scratching our heads and wondering what the heck we’re going to do with all this EHS performance data stuff.
The most important decision we need to make on metrics is not around what is easy to collect, properly weighted or readily available; rather,the most important question to consider is what indicators best reflect EHS system and business performance. In other words, what are the key performance indicators (KPIs)?
KPIs are more than just metrics – they are indicators of where the company and EHS program are headed. Of course, they can’t tell the full story; rather, they serve asthe “check engine” light of business systems. They reduce the complex nature of organizational performance to a small number of key indicators that make performance more understandable and digestible.
KPIs can cover many areas, and there might even be different measures for different departments or levels in the organization. However, all KPIs are held together by one principle: they are shaped by a company's strategy and operations and linked to the overall goals.Howard Brown recently posted on this topic and had some great suggestions on aligning EHS KPIs with business KPIs.
It’s also important to remember that KPIs and metrics are not the same as goals. KPIs are tools that we can use to not only monitor progress towards goals, but also monitor the process or system for achieving those goals. The KPI should be linked to the corporate goal, but the KPI should not be the goal. For example, the goal might be “zero spills,”but the specific activities that are tracked should monitor whether the processes and systems for spill avoidance and/or prevention are in place and functioning.
Finally, KPIs should be constantly monitored and shared with those to whom they are relevant. If these numbers are only monitored on a quarterly or annual basis, they become more like an exam. As such, they actually become extraneous to the business, and employees start to feel that they are extraneous to the job they are doing. KPIs then become onerous things that people are being checked on, and the very purpose of collecting this data is undermined.
When it comes to measuring progress at your company, what do you do with the data? To whom do you report the results?
Topics:
Metrics & Reporting
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About the Author
Kelvin Roth
CF Industries Inc.
Kelvin Roth is the Vice President, Environmental, Health, Safety and Quality, at CF Industries. He is an EHS professional with more than 25 years of experience in building global, results-driven EHS programs and dynamic EHS teams. He is also a past president of the NAEM Board of Directors. Follow him on Twitter at @Oenodog.