Safety Culture, Performance & Safety Culture, Performance & the Bottom Linethe Bottom Line

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Todays ChallengesTodays Challenges• Many challenges exist in today’s Workplace

– Unstable Economy– Cyclical Growth & Profitability– Limited & Aging Workforce– Competition for Skilled & Experienced Staff– Compliance to new Rules & Regulations– Meeting Customer & Industry Demands– More with Less

• Improving your safety program will have a positive effect on your employees and bottom line!

• Its not only required by law… IT’S THE RIGHT THING TO DO!

Construction Safety CultureConstruction Safety Culture• ~ 1,250 workers are killed each year in the Construction

Industry, the highest of all industries.• The construction industry reported 155,420 disabling

work-related injuries in 2003. • Of these, 109,400, or 70 percent, fell into five categories:

overexertion, same-level falls, bodily reaction, falls from heights, and struck by object.

• Falls continue to be the leading cause of death.• Hispanic workers and Laborers are the most “at risk”.

ALL of the Deaths and Injuries were Preventable!ALL of the Deaths and Injuries were Preventable!

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General Industry PerformanceGeneral Industry Performance

• Over 5,488 fellow workers died on the job in 2007!– That’s an average of 21 people every work day!

• 2007:– $7.2 Billion paid to 500,000~ workers on long-term disability

insurance. – 1.2 million Day Away Cases ($150 billion)– 4 million total Recordable Cases ($180 Billion)

Todays Workforce still Experience Todays Workforce still Experience Horrible Injuries & DeathsHorrible Injuries & Deaths

• The Workers Compensation costs for the most disabling workplace injuries and illnesses in 2006 was $48.6 billion! 2008 Liberty Mutual Workplace Safety Index

• This COST does not include:This COST does not include:– Lost productivityLost productivity– Replacing Injured WorkerReplacing Injured Worker– Schedule/Production ImpactSchedule/Production Impact– Increased Insurance Premiums (EMR)Increased Insurance Premiums (EMR)– Decreased Morale and Productivity of fellow workersDecreased Morale and Productivity of fellow workers– Collective time of Incident InvestigationCollective time of Incident Investigation– Implementation of Corrective ActionsImplementation of Corrective Actions– Pain & SufferingPain & Suffering

The Cost of Getting HurtThe Cost of Getting Hurt

• Chevron Corporation– Total Injury Cost Benchmark data:

• Estimated total inclusive cost of injuries:– Recordable Injury: $45k/Injury – Days Away Case Injury: $125k/Injury

Most organizations fail to realize Most organizations fail to realize the true “IMPACT” that injuries the true “IMPACT” that injuries

and incidents have to their bottom and incidents have to their bottom line!line!

Injury Cost BenchmarkInjury Cost Benchmark

California Safety MilestonesCalifornia Safety Milestones• 1973 - California Occupational Safety and Health Act

– Stipulates that every employer has a legal obligation to provide and maintain a safe and healthful workplace for employees.

• 1991 - Injury and Illness Prevention (IIP), – IIPP is required for every California employer.

• 1999 – AB 1127 – Increased Penalties and allowed criminal prosecution of

managers

• 2011 – AB 2774– Increases OSHA’s ability to cite serious and willful safety

violations

Why Workers Take RisksWhy Workers Take Risks

• Many studies show a direct link between “Cultural Norms” and Injury/Incident rates.

• 2007 Study* & Interviews of hundreds of injured construction workers found that workers exhibited unsafe behavior because of:– a lack of safety expectations/awareness– macho attitudes– schedule pressures– co-worker attitudes– Lack of management engagement & leadership– and other organizational, economic and psychological

factors (Culture).

8*Why operatives engage in unsafe work behavior: Investigating factors on construction sites,2007; Rafiq M. Choudhry & Dongping Fang

Management FactorsManagement Factors• Inadequate Leadership or Supervision.• Inadequate Engineering.• Inadequate Hazard Analysis.• Improper/Inadequate Tools and Equipment.• Inadequate Maintenance.• Inadequate Work Planning/Procedures.• Equipment Failure.• Inadequate Training.

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Behavioral FactorsBehavioral Factors

• Allowed Behaviors- Inadequate Leadership or Supervision

• Learned Behaviors- Proper Training?• Defiance-Resistance to Follow Procedures• Inadequate Physical or Mental Capability.• Lack of Knowledge.• Lack of Skill.• Stress• No Positive Recognition-Improper Motivation

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Cultural AdaptationCultural Adaptation

• Culture adaptation is an evolutionary process by which humans modify habits and customs to fit in within existing norms.

Your Safety Culture is a subset of your Corporate Culture

Cultural NormsCultural Norms

IS THIS ACCEPTABLE BEHAVIOR?

Cultural NormsCultural Norms

IS THIS ACCEPTABLE BEHAVIOR?

Cultural NormsCultural Norms

IS THIS ACCEPTABLE BEHAVIOR?

How do You Measure Success?How do You Measure Success?

• The “absence” of Injuries & Incidents?• Meeting “acceptable” Injury Rates and

Performance Goals?• Maintaining “industry average” Loss

Rates/EMR/RIR?• Staying off the Regulatory Radar?

How many believe you have obtained “Success” in your Safety Program?

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Foam Break-away During Columbia Lift-Off

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Debris “spray” after foam hits Columbia’s left wing

Safety vs the Pressure of SuccessSafety vs the Pressure of Success

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• Projected cost per flight; $7.7 million; actual cost $500 million (65X) (estimated total program cost per flight is $1.5 billion)

• By 1989 launch predications fell from 50 flights/year to 24 • Average turned out to be 4/year

• 10 day turnarounds became 67 days

• Budget cuts and policy changes resulted in headcount reduction, increased pressure on schedules and cost.

• By flight time, Columbia STS flight 107 had suffered 13 delays.

What We Know Now....What We Know Now....

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• Post-launch analysis shows that one large piece struck Columbia on the left wing 81.7 seconds after launch.• Large foam piece was:

• 21 to 27 inches long• 12-18 inches wide• Struck the shuttle at 416 to 573 mph

• The NASA “Inter-center Photo Working Group” engineers were concerned that the Columbia had sustained damage not detectable in the limited number of views their tracking cameras captured

Foam and Photo’sFoam and Photo’s

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• Internal memos warned that damage to the wing’s leading edge could cause “burn-through” during re-entry

• The Working Group Chair requested high-resolution images be taken by the Department of Defense

• 3 requests were made to image the orbiter in-flight

They were ALL denied when upper level engineers deemed the impact as

“not a significant threat to flight safety.”

The Result is known…The Result is known…

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Incident Review board’s comments:

• Budget and policy pressures ultimately had an impact on the organizational structure and culture.

• The investigation report should be read by anyone who works in large organizations. It uncovers the blindness in organizational decision making, shows how this occurs, and how this can be remedied.

• NASA’s culture had gradually begun to accept escalating risk.

• NASA’s safety program was largely silent and ineffective.

Ultimately - it recommended creation of an independent Safety/Reliability & Quality assurance office.

Root Cause Root Cause Management & CultureManagement & Culture

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“In our view, the NASA organizational culture had as much to do with this accident as the foam”

“Organizational culture refers to the basic values, norms, beliefs, and practices that characterize the functioning of an institution. At the most basic level, organizational culture defines the assumptions

that employees make as they carry out their work”

“It is a powerful force that can persist through reorganizations and the change of key personnel. It can be a positive or negative force.”

Normalization of DevianceNormalization of DevianceThe casual acceptance of problems/events/risks that are not

suppose to happen has been described by sociologist Diane Vaughan as the

““normalization of deviance”normalization of deviance”

This led to “smart” people making questionable decisions justified by a belief that it was best for the program!

“Program managers required engineers to PROVE that the debris strike created a safety-of-flight issue;

…engineers had to produce evidence that the system was unsafe rather than prove that it was safe…”

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WHAT THE LAW SAYSWHAT THE LAW SAYS

LAWS MUST BE CREATED BECAUSE MANY COMPANIES JUST DON’T CARE

California's AB 1127California's AB 1127

• On October 6, 1999, Governor Gray Davis signed AB 1127 into law.

• Effective January 1, 2000, AB 1127 amends Cal/OSHA (the California Occupational Safety and Health Act) to add the most massive civil and criminal penalties ever found under an occupational safety and health law.

What AB 1127 SaysWhat AB 1127 Says

• Large Increase in criminal penalties under Cal/OSHA.

• Individual managers and supervisors may now be fined up to $250,000 and be imprisoned for up to four years.

• Criminal fines range up to a maximum of $3.5 million in fines for corporations and limited liability companies.

• Cal OSHA civil penalties can now be assessed against government entities.

Interpretation of Willfully…Interpretation of Willfully…

• Defines the term "willfully" to simply mean a willingness to commit or not commit an act. The term "willfully" for Cal/OSHA purposes will not require any intent to violate law or to injure someone.

AB 2774: New Rules Regarding AB 2774: New Rules Regarding Workplace Safety CitationsWorkplace Safety Citations

• Effective Jan. 1, 2011: amends labor code section 6432 to define serious physical harm and establishes a rebuttable presumption as to when an employer commits a serious violation of these provisions.

• “Rebuttable Presumptions” effectively reverse the presumption of innocence in some cases!

• The law, which went into effect on the first of year, authorizes Cal/OSHA, to define how serious violations of safety in the workplace are cited.

How AB 2774 Affects Managers How AB 2774 Affects Managers

• New factors used to accurately issue serious citations include:– any training given to employees and supervisors,– existing workplace safety procedures,– supervision of employees exposed to the hazard, – any contributing information the employer

wishes to provide to explain why the employer believes that no serious violation exists.

What an IIPP RequiresWhat an IIPP Requires

• In California every employer is required by law (Labor Code Section) to provide a safe and healthful workplace for his/her employees.

• Title 8 of the California Code of Regulations (CCR), requires every employer to have an effective Injury and Illness Prevention Program in writing that must be in accord with T8 CCR Section 3203 of the General Industry Safety Orders.

• Additional requirements in T8 CCR Safety Order Sections address specific industries

HOW IMPROVING CULTURE ADDS HOW IMPROVING CULTURE ADDS VALUEVALUE

EVALUATE, EDUCATE, ENABLE & ENCOURAGE

Benefits of World Class Safety Benefits of World Class Safety

• Many studies* show a direct link between World Class Safety & Organizational Excellence in:– Quality– Reliability– Competitiveness– Employee Morale– Profitability

• But How & Why?*Improving Safety Culture, Dominic Cooper.

Safety Culture & TeamworkSafety Culture & Teamwork

• Survey of over 600 companies found that the quality of the safety culture was directly related to:– Advanced work methods (Competitive Advantage)– Reduced absenteeism (Improved Productivity).– Improved Organizational Performance (Quality, Reliability &

Teamwork)– Employee commitment & trust

• Studies of the US Construction Industry* show that projects with World Class Safety programs meet schedule and budget more often.

• High performing teams improve profitability at any company.*Construction Industry Institute

World Class ProgramsWorld Class Programs

• World Class Safety Programs demand excellent processes, procedures and policies to exist.

• Surveys of successful companies show:– Safety process expectations are mirrored across all other

functional areas.– Reliability improvements as high as a factor of 10 due to:

• Fewer Human Errors• Continuous Improvement Processes• Feedback Mechanisms

– Improvements in employee attitudes towards safety transferred over to all other functional areas.

Competitive EdgeCompetitive Edge

• World Class Safety Cultures instill loyalty and passion.• Senior Managements role is to empower, engage &

energize employees through Safety Leadership!• Dedicated employees work harder, longer, more

efficiently and have better attitudes about their job!• Employees that BELIEVE their company cares about

them, care about their company and the quality of the work they perform!

Leading Cultural ChangeLeading Cultural Change

10 Methods for Improving 10 Methods for Improving Safety PerformanceSafety Performance

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BEHAVIORS

ATTITUDESACTIONS

UNSAFE CONDITIONSINJURIES & INCIDENTS

POLICIES & PROCEDURES

HIGHLY VISIBLE

INVISIBLE

BELIEFSBELIEFS

VALUESVALUES

PERCEPTIONSPERCEPTIONS

NORMSNORMS

MOTIVATORSMOTIVATORS

CORPORATE CULTURE

TRUSTTRUST RESPECTRESPECT

ASSUMPTIONSASSUMPTIONS

UNREPORTEDUNREPORTEDINJURIES & INJURIES & INCIDENTSINCIDENTS

WE MUST FOCUS BELOW THE WATER LINE

#1 Management Leadership#1 Management Leadership

• Once leadership establishes its commitment to safety, Cultural Boundaries are formed.

• Your Leaders Actions demonstrate their commitment:– What management pays attention to:

• SAFETY vs. SCHEDULE vs. CO$T• Decisions that are made & why

– What management ignores:• Employee concerns, feedback, suggestions• Production or Schedule overriding safety issues

– What management measures and how they respond:• What does management really care about?

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Desired Effects of Management EngagementDesired Effects of Management Engagement

• Key Safety Leadership Qualities– Personal Commitment to Safety

– Positive Role Model of Safe Behaviors

– Open 2-way Communication at all levels

– Demonstrated Engagement in all aspects of the Safety Program

– Understanding of “Behavior Based Safety”

– Management Accountability

– Active Participation in the Recognition Program

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#2 Employee Involvement#2 Employee Involvement

• Key Employee Needs:– Appreciated– Respected – Feel that management “cares” about their safety

• Employee perceptions represent the true safety culture• The employees at greatest risk of injury must be:

– Engaged– Enabled– Empowered

Before World Class Safety Performance can be realized!

#3 Evaluate & Control Hazards#3 Evaluate & Control Hazards

• Robust Hazard Analysis Process– Proactively assess workplace hazards

• PPE Evaluations and Selection Criteria– Ensure employees are fitted and PPE is effective

• Pre Task Planning/Hazard Recognition– All medium and high risk task should require a hazard

recognition and mitigation plan• Behavior Observation Tool

– Evaluate if your employees are following procedures– If not, why?

#4 Proactive Indicators#4 Proactive Indicators• Behaviors

– Behavioral Observation Process• Conditions

– Collecting data from field walks and employee feedback• Training

– Competency, Compliance and Retention testing of employees

• Work Planning– Use of JHA’s, Pre Task Planning, permits

• Management Leadership & Commitment– Measure time in field, Classroom Instruction, Leadership

efforts, % complete of assigned safety tasks• Project’s Cultural Maturity

– Project team assessments, contractor feedback, Safety Self Assessments

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#5 Effective Communication#5 Effective Communication

• Employees need access to forums, committees or other means that allow direct communication of safety concerns to management

• Direct feedback mechanism that shows safety concerns have been addressed in a timely manner

• Employees must not be afraid to report injuries or near misses.

• Employee need to feel part of the safety process and effective communications will elevate their trust & respect of management

#6 Best Known Methods#6 Best Known Methods

• World Class Results depend on Best Known Methods

• Improve your methods by Benchmarking:– World Class Organization– Competitors– Trade Organizations– Consultants

#7 Effective Safety Training#7 Effective Safety Training

• Most training programs are dry, boring and ineffective in educating the workforce

• Effective training is designed to address the needs of the employees, not to satisfy regulatory requirements

• All training should include feedback mechanism from employees for continuous improvement

Elements of Effective TrainingElements of Effective Training

• Key Elements of an Effective Safety Training Program include:– Trainers have the greatest impact on effectivenessTrainers have the greatest impact on effectiveness– Delivery is EVERYTHING! Delivery is EVERYTHING! - the average attention span

is 12 minutes– InteractionInteraction - Employees must be engaged to learn– Clear, Concise & To The Point Clear, Concise & To The Point - remove non value

added material– Test for Competence Test for Competence – Ensure that knowledge has

been transferred

#8 Recognition not Incentives#8 Recognition not Incentives

• Incentives create undesired results:– Non reporting of incidents– Hiding of injuries– Creates feelings of entitlement

• Positive Recognition Benefits:– Rewards Observed/Desired Behaviors and Performance– Effective as Spontaneous and Milestone Recognition– Encourages Employees to Maintain Recognized Behaviors– Makes Employees Feel Appreciated– Helps sustain a functioning world class culture

#9 Continuous Improvement #9 Continuous Improvement ProcessesProcesses

Key to Sustaining a World Class Safety CulKey to Sustaining a World Class Safety Cultureture• All Injuries & Incidents must be analyzed to

Determine Root Cause & Prevent Reoccurrence• Review all Programs, Policies & Procedures

annually to ensure material is up to date and useful to end users

• Safety Self Assessments should be conducted to ensure the overall safety program is successful and meeting the needs of the organization

Fact FindingFact FindingIncident InvestigationIncident Investigation

• Incident investigations should be designed to prevent reoccurrence

• Process must be fair and focused on finding the root cause• All incidents and near misses should be investigated• 6 key questions should be answered:

– who,– what, – when,– where, – why, – and howTo identify key corrective actions that will Prevent Recurrence!

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#10 World Class Safety Programs#10 World Class Safety Programs

• Most organizations have safety programs that are designed to meet regulatory requirements…

NOT EMPLOYEE NEEDS!NOT EMPLOYEE NEEDS! • Safety Programs should:

– Go above and beyond OSHA requirements– Engage employees in their development– Be living documents that change as conditions and

needs change– Protect your most valuable asset, your employees!

Phase 0Huh?

Phase 1No Jail

Phase 2Save $

Phase 3Priority

Phase 4Value

Phase 5Instinct

People/Culture Focus

Program Development/Data Focus

Discipline/Compliance Focus

What is Safety?

Try to Comply with the Minimum(OSHA)

Accidents Cost Too

Much

Safety is a Core Value

World Class Safety

Performance

Safety is a Priority

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Phases of Safety ExcellencePhases of Safety Excellence

Safety Performance

®® CycleCycle

What is PossibleWhat is Possible

US Construction

Industry (OSHA), 6.4

CII Members, 0.88

Intel, 0.52

0.00

2.00

4.00

6.00

8.00

10.00

Leading ChangeLeading Change• Which role will you assume in Cultural Change?

–Domain Defender? –Reluctant Reactor? –Anxious Analyzer? –Or… Enthusiastic Prospector?*

• “You must be the change you wish to see in the world.” Mohandas Gandhi

55*Adapted from Goffee and Jones, 1996.

Thank You for Your Time!Thank You for Your Time!

Questions?Questions?

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