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© 2011 Indunil M Weerasinghe

A balanced scorecard approach to

safety metrics in Aviation

You can’t manage what you don’t measure: a piece of corporate wisdom that is often credited to

management consultant, Peter Drucker. In a nutshell, if you want to manage something effectively,

you need to construct a way of monitoring it. Managing “safety” is no different, yet throws up some

unique challenges.

Aviation organisations are described as “high reliability organisations”. Accidents are generally low in

probability but high in consequence. The ultra-low accident rates mean that this alone is an

insufficient indicator of safety performance. An organisation’s poor safety practices could go un-

noticed, remaining as a latent risk that only comes to attention after a catastrophic accident.

Measuring other indicators could help an organisation gauge its safety performance better.

Unfortunately, “safety” is not a production outcome that is inherently quantifiable. Australia’s national

aviation authority (CASA) reports on this challenge in one of its reviews, citing that: “many studies

only measured subjective perceptions of safety rather than objective measures”. (CASA document ref

XR-2011-002 titled “A systematic review of the effectiveness of safety management systems”). The

ICAO model for safety management does provide guidelines as to where an organisation could find

information on its safety performance, such as hazard reporting, audits, surveys, investigations etc.

However, what is lacking is a methodology for consolidating such findings in an effective manner.

Why exactly is this important? Data – whatever the quantity and quality - are useless unless they can

be interpreted and made sense of. A concise set of safety performance indicators would make it easy

to monitor safety performance and progress, providing management a succinct summary which would

tell them whether safety objectives are being met. For ICAO or any national aviation authority to

define a set of indicators would be ineffective. For one, this would go against the grain of

contemporary regulatory regimes which are outcome based rather than prescriptive. Each

organisation needs the flexibility to devise its own set of indicators, commiserate with its safety policy

and objectives, and taking into account specific organisational complexities.

In other words: there’s no “one size fits all” solution to measuring safety. Any mechanism would need

to provide for some degree of strategic management, recognising that contemporary safety

management calls for a strategic shift in thinking. This would allow an organisation the flexibility to

devise appropriate safety metrics, keeping in line with today’s outcome based regulatory system.

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It follows on therefore that strategic management methods could be applied to the safety context.

Norton & Kaplan’s “Balanced Scorecard” (BSC) is arguably one of the most widely known and

understood methods. (An

excellent synopsis can be found

at the website

www.vectorstudy.com.) The BSC

provides a framework for

establishing, measuring and

monitoring strategic business

performance. The approach is

iterative. The analysis work top-

down by establishing strategic

objectives first and then

systematically working to identify

how these are to be achieved,

ultimately yielding a consolidated

set of Key Performance

Indicators. These KPI’s are grouped into four key “business perspectives”, each of which can be

reinterpreted in the context of our safety management objectives:

1. The “Customer” perspective:

In the BSC, this calls for the organisation to ask: “how should we appear to our customers?” If

we consider the management and employees to be internal customers of the SMS, then this

question in effect represents the organisation’s safety culture. In essence, it asks: “what

attitudes are required to reach our safety objectives?” This forces the organisation not only to

think actively about how it will nurture a better safety culture, but will also provide a

mechanism to monitor it.

2. The “Internal Business Processes” perspective:

In the BSC, this perspective asks “what business process should we excel at?” In the context of

safety, this is questioning: “what behaviours should we excel at to reach our safety

objectives?” This could encompass a wide range of behaviours, for example critical activities

such as hazard analysis and risk management.

3. The “Learning and Growth” perspective:

In the BSC, this question here is “how will we sustain our capability to change and improve?”

This represents a continuous improvement paradigm. In the safety scorecard, the question

Figure 1: Producing a Balanced Scorecard From “The Measures of Success”

by the Accounts Commission of Scotland

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remains effectively the same, asking: “how will we sustain our capability to improve, to reach

our safety objectives?” This could, for example, entail activities such as safety promotion,

audits, and safety action groups to name a few.

4. The “Financial” perspective:

In the BSC, this perspective is about “how should we appear to our shareholders?” It is

pragmatic to keep in mind that aviation organisations are ultimately financial entities where

“safety at all costs” is not an option. Rather, the objective is that safety management should

contribute to ensuring that risks are contained within levels that are ALARP (as low as

reasonably practical). In other words, safety should be considered as a value proposition and

this element of the scorecard asks: “what is the value addition of our safety management

activities?” Thus the organisation will have a mechanism for evaluating the whether its safety

budget is adequate and being spent wisely.

Whilst this “Safety Scorecard” is by no means a panacea to the complexities of measuring safety

performance, it is anticipated that it could prove to be a useful addition to an organisation’s safety

management toolbox. The

Balanced Scorecard approach is

generally well understood by

senior management in the

corporate environment. It would

therefore be conceptually easy

to grasp and implement. More

importantly, however, as with

many activities to do with safety

management, the true merits of

the method lie in its process and

not merely the end result.

Merely sitting as a Safety Action

Group probing for answers to the questions raised by the Safety Scorecard would guide the

organisation to ever safer operations. To quote the late Arthur Ashe: “success is a journey, not a

destination”.

Contact the author: Further discussion and debate is welcome and encouraged. Please email

indunil.w@orcaanalytics.com or connect on LinkedIn at http://www.linkedin.com/in/indunilmw.

Figure 2: The Safety Scorecard