A complete picture of compliance metrics: Input from an EHS expert
Better outcomes from deeper insights. EHS compliance expert Bruce Adler shares his take on getting more out of your compliance metrics.
Love them or hate them, compliance metrics are key to every company’s success. Yet many EHS professionals find themselves unsure of how to best approach them. Despite dealing with a mountain of countless outputs every day, all this data still might not add up to the full compliance picture. In this Q&A, Senior EHS Counsel for 28 years at the General Electric Company, Bruce Adler shares his insight into using numbers to address needs behind non-compliance.
Beyond identifying risk areas, why are compliance metrics important for EHS professionals?
In short: It’s essential that EHS professionals speak the same language as the business-decision makers who run the company. Those decision makers use metrics daily to determine how they’re doing and how they should do it better, faster, less expensively – whatever the goals are. Whether it’s inventory turns, cash flow, customer response time, or any other economic measurements, metrics used on a day-to-day basis and are a part of the fundamental operational DNA.
For EHS teams to be successful in that environment, it’s essential for them to think in the same way and to talk the same language. Compliance metrics are an important element of that process. You need to ensure that they demonstrate performance and that the money management spends on the function has an impact. EHS metrics are often the “normal outputs,” such as air exceedances or number of injuries. They’re not always the right metrics, or at least not the only metrics, but they’re a way of demonstrating how the EHS function is doing. Told correctly, you can leverage that story to make the case for your role, your desired budget, and your EHS compliance program roadmap.
What are the “right” EHS compliance metrics to measure?
Let’s group it into buckets. In the first bucket there are the standard compliance metrics, or those “normal outputs” we mentioned. Even though these metrics have weaknesses, they hold information that everyone, and especially corporate, needs to know. These include event outcomes like penalties, injuries, releases, and exceedances. They’re the things that hurt people or impact the community – or show up in the newspaper. These compliance metrics make up the baseline snapshot of what you’re doing. Event outcomes are easy to understand and explain – and are the first things asked about if something goes wrong. But because they’re output metrics, they only track things that have already gone wrong.
That leads us to the second bucket: “intangibles,” which are harder. This bucket covers compliance metrics for behavior that can precede – and hopefully prevent – “failures,” such as injury or exceeding emissions limits. You need a way to measure your preventative efforts to more effectively mitigate non-compliance in the end. Ask yourself what action you can do that would result, over time, in reducing those back-end numbers. That might be proactive, such as training, or reactive, such as accident investigations.
Why aren’t “normal” compliance metrics, like exceedances, enough?
In my experience, output compliance metrics, such as penalties, can be incomplete and therefore not always helpful. And here’s why: First, they’re a lagging indicator. They only tell you the fact that you’ve messed up in the past – not how to prevent something from happening in the future. Also, they’re random. Output compliance metrics are dependent on often unpredictable and subjective factors. Did you have an inspection? Did the inspectors show up on a bad day for the site? Were they particularly rigorous? There’s no standardization of audits, so outputs can’t give a complete view of what’s happening in your EHS program. Lastly, output metrics measure “bad things,” and everyone knows it. That increases the risk of underreporting.
Of course, you can’t do away with that output bucket, but establishing an input bucket can provide a counterweight to some of their weaknesses and help improve overall results. To do so, you need to find a way to measure what’s happening to decrease your non-compliance issues – to judge how well you’re addressing them, and how you can adapt to reduce that rate. For our team at GE, we established a mandatory audit program, requiring facilities and businesses to regularly perform self-assessments of their compliance status. Rather than measure them on non-compliance findings (the normal output metric), we instead measured them on how quickly they corrected the findings and got the operation back into compliance. We called it the “compliance finding closure rate.”
How can input metrics improve compliance culture?
Beyond the data and results, simply using input compliance metrics can help an EHS program make progress. As we mentioned, they can help to drive better outputs. And that comes by way of increasing awareness as well as enhancing your approach towards compliance.
If the employee perception is “If I get hurt, I’ll be judged and punished,” they can feel discouraged to share non-compliance issues. Input metrics like a finding closure rate or even management floor visits indicate to your employees that you’re truly committed to getting this right. If you tell them, “We’re going to measure your manager on accident investigations,” the perception is that the business is holding its team accountable for the right behaviors. It helps employees see a commitment to figuring out why something went wrong and fixing it so that it doesn’t happen again rather than searching for blame. And that’s an important step in creating compliance culture.
Leveraging compliance metrics to keep your company moving forward.
Compliance metrics are key to making your business better. That is, if you’re using them in a way that drives the right behavior. Whether your reporting framework is corporate-mandated or determined autonomously by your EHS team, explore expanding a potentially limited compliance view through additional input metrics. Make sure to focus on metrics that can make the most impact, changing internal perception and empowering your team to be more proactive in its program. Discover just how to do so in our insider guide webinar with Bruce – all about building your best EHS culture.
Bruce Adler is Principal of Adler Villani, LLC, an EHS consulting service specializing in compliance issues and programs. He has spent 40 years in the EHS field, working for an environmental NGO, the US EPA and 2 large multi-national companies.