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Profiting From Safety

By Dr. Duff Watkins
from Australian Safety News

"Safety, profitability and the environment," are the three things for which a CEO is responsible," said Ric Charlton recently.  He would know.  As Chairman and Chief Executive Officer of Shell Australia Limited he presides over one of the world's safest companies in one of the world's most dangerous industries.

The linkage of safety-to-profitability may not be immediately apparent but it has a flawless logic:  the safer the work force, the more productive the work force.  It is therefore not surprising that companies with high operation standards and productivity levels also have good safety records, for all three results are intertwined.

The Synergy of Safety and Quality

There is a synergy between safety and quality; one helps cause the other.  The definition of "total quality management" (TQM) is "to achieve continuous improvement" in a company's activities.  Specifically mentioned is that "an effective health and safety program needs to be part of the plan for it to be successful." 
Safety is intertwined with quality because attaining a good safety record requires from management the same discipline and commitment as TQM.  A company's safety culture and quality culture are both processes which must be monitored continuously.  Both are also essential for achieving better business performance. 
Safety, like quality, is a business issue.  Here's why:  Any organisation acts to survive.  Making profit ensures its survival.  Preserving the environment prolongs its existence and working safely is the means to that end.  If a company imperils its work force it imperils its vehicle to success.  When a company either causes or allows injury to occur to its employees, others, or the environment, it endangers its very livelihood.  Thus there are sound business reasons why safety comes first.

Safety Saves --- Accidents Cost

According to the most recent National Health Survey an estimated 2.4 million people had illness or injury resulting from accidents.  Almost 25% of all persons visiting a casualty or outpatient ward at Australian hospitals did so because of an accident.  27% of all accidents occurred during sport, 24% occurred at home, while another 23% occurred at work.  The cost to business -- and the public who fund the hospitals-- in terms of days lost, absenteeism, and impaired work performance translates directly into reduced national productivity.  This retards Australia's growth as we seek to become increasingly competitive in global markets.  Unsafe work practices are simply incompatible with quality.  Accidents cost the person involved, the businesses where they occur and the nation.  So who pays?

Who Pays the Bill?

Unsafe work is costly.  In a recent article engineer Derek Viner, a specialist in risk control and an expert in work-based accidents, said that more than 500 work-related deaths occur annually in Australia and that mechanical equipment is responsible for 80% of these deaths, largely because of unsafe equipment design.

The direct cost of workers' compensation claims in 1989-90 was $4.8 billion and the total cost of workplace deaths, injuries and disease is estimated to be over $9 billion annually. Who pays the bill? You and me! Every tax payer eventually pays, literally, for sluggish national productivity.

National productivity can be improved, says Mr. Viner, by designing and building safer machines. He cites three basic reasons why safety remains a low priority:

For example, whose problem is an unsafe machine?  The engineer who designed it or the craftsman who uses it?  What are the legal implications?  Until these issues are resolved, safety devices will remain an afterthought, added only after equipment is designed and built, and then removed by workers if found to be too cumbersome.  Safety, like all quality features, needs to be "in-built."  Poor design produces accidents waiting to happen.

Why Accidents Happen:  Latent and Active Failures

Accidents are caused by active failures:  a machine breaks down, a cable does not hold, a human errs, a preventative measure fails, etc.

Accidents are also caused by latent failures:  dormant factors which are ever ready to contribute to an accident.  Latent failures are accidents waiting to happen.

For example, airplane wings must be continuously rechecked lest metal fatigue (latent failure) cause a wing to get torn off (active failure) in flight.

A quality oriented safety program seeks to eliminate both the obvious active failure and the less obvious latent failure.  This is why management is important.

Commitment or Involvement:  Bacon or Eggs?

Many industrial accidents result simply from poor management.  Many companies are merely involved rather than committed to the notions of safety on the work site.  Safety, like TQM, requires management's commitment rather than involvement.

The difference between commitment and involvement is this:  picture a breakfast plate of bacon and eggs.  The chicken that provided the egg was involved; the pig that provided the bacon was committed!

Likewise, the company that pays scant attention to the impact of safety on bottom-line profit is merely involved and does not yet grasp the significance of safety relative to worker productivity.  Large and successful companies are fully committed to safe work practices because they understand the economic realities behind safety.  Put bluntly, workers produce more profits in a safe work environment.

Re-conceiving Safety:

Linear and Lateral causes of accidents

Accidents can be viewed from a linear or lateral perspective.  The linear view is usually taken by most management, but I suggest that the lateral perspective is more suitable for companies which are truly quality orientated.

A linear accident is the simple compounding of errors to the point that an accident occurs.  For example, on January 28, 1986, equipment failure in the space shuttle Challenger's host rocket allowed escaping gases to ignite fuel tanks.  The explosion of the rocket killed all seven crew members.  Subsequent investigations found that the active failure was the burnout of a rubber seal called an O-ring.  Lined up behind the active failure, however, were many latent failures including:

These latent failures became linked and over time caused the space shuttle's explosion.  Note too that the latent failures cited above are all management issues.

The linear process is one of cause-and-effect, a chain of events occurring across time.  The lateral process stresses the simultaneous occurrence of events, that big accidents result not from a stringing together of little events but from many events coming together at the same.

The Myth of the "Murderous Bolt"

For example, the Chicago crash of a DC-10 airplane a few years ago, considered at the time to be the worst air disaster in US history, was viewed from both a linear and lateral perspective.  At first, investigators reported that a linear chain of events was the cause:

One investigator even described the 3 inch culprit as the "murderous bolt"!

Days later, however, a lateral explanation was published.  This lateral explanation discovered several events occurring simultaneously as being the cause of the crash.  Microscopic analysis of the bolt revealed that it had itself been broken by a sudden violent strain.  Although metal fatigue contributed to the problem, it was insufficient alone to break the bolt.  The other factors-- the pylon, engine assembly, take off-- acted in concert to break the bolt and cause the crash.  Without the simultaneous stress of these factors, the force would not have been sufficient to shear the bolt.  Even a rapid sequencing of these factors would have left the bolt intact, because the stress at any moment in time would have been less.

The point is:  factors thought to be acting across time turned out to be acting at the same time to cause the accident.  Instead of the bolt being the cause, it was one of several necessary and simultaneous conditions for the crash.  This turned the discussion away from defective bolts and bad luck to the real issue of structural and design problems.  The "murderous bolt" was a myth.  Blaming it was mistake; one which would not improve the quality of the safety procedures.  The lesson for management is:  an accident is a result; safety is a process.  Safety is as important as any other aspect of quality control, and must be managed accordingly.

To illustrate another way, the accidental dropping of an object from the 20th floor of a construction site which hits a person below is an incident which requires more than the opening of one's fingers.  It requires the downward pull of gravity, the weight of the object, the positioning of the unfortunate person being hit, etc.

The opening of one's hand does not produce a linear "chain of events" which causes an accident.  If any one of these factors was altered-- if gravity was suspended-- the "chain" would be broken, the object would not fall, and the accident would not occur.  Accidents result not merely from a chain of circumstances but from several circumstances occurring simultaneously.  Managing these "circumstances occurring simultaneously" is a vital part of TQM.

Guerrilla War

Guerrillas are small, independent bands of soldiers who attack by surprise and raid communication and supply lines.  Accidents are like guerrilla raids:  they lower morale, hamper efficiency, and cause distraction.

Ensuring safety at work is like fighting a guerrilla war:  few decisive battles are fought, it requires constant vigilance, and it is sometimes difficult to know whether you are winning.  Yet the war is worth waging because, while attaining a good safety record does not entail a huge outlay of resources, it does enhance the bottom-line.