Answer

Example 1

A company must invest in preventive measures, such as training, to avoid a spill but must also have a good detective system to warn the company that an accidental spill has happened before it spreads.

  • Possible leading indicators: “hours of training on spill prevention” or “dollars spent on spill prevention technology”.
  • Possible lagging indicators: “volume of spills” or “number of spills”.

Example 2

If the organization assumes that more inspections or more preventive maintenance will prevent spills from occurring or breakdowns that might release unacceptable pollution in the air or water, then it might use the following:

  • Possible leading indicators: “number of inspections” or “$ of preventive maintenance”.
  • Possible lagging indicators: “number of infractions” or “number of penalties”.

The leading indicator attempts to reduce the cause and the lagging indicator measures the effectiveness of the leading activity.