How developing a safety culture can help your company’s bottom line

The business benefits of safety often focus on cost avoidance. Companies know that every workplace safety incident incurs both direct costs, like the cost of medical treatment, and indirect costs, like loss of work time and affect on morale.

For some businesses, the cost of these incidents, including the resulting reputational damage, is motivation enough for improving safety performance. But whatever the reason, as performance improves and a strong safety culture takes root, the business achieves broader excellence.

So how can a business go about driving culture change to create a safer workplace?

Felt leadership

The greatest challenge in creating a safety culture is instilling ‘Felt Leadership’, which means that company leaders demonstrate that they are absolutely committed to safety.

They do not waiver, no matter the business conditions, and they are clear that whenever a decision involves a choice—between safety and productivity, for example—safety comes first.

The crucial requirements of Felt Leadership are visible engagement and two-way dialogue. This means senior leaders undertaking regular interaction with employees by performing safety observations, having wide-ranging conversations with employees about safety, leading safety meetings and taking active roles in other activities to promote safety. Leaders cannot demonstrate Felt Leadership by clicking ‘Send’ on an email – they must be seen and heard.

The elements required to support leadership include:

▪ Clear and meaningful policies and principles that confirm the value for safety and provide a clear basis for decisions;

▪ Safety goals and objectives that are a prominent part of standard operating procedures; and

▪ High performance standards that apply to all safety matters and are well communicated and known by all employees.

Employee engagement

A strong safety culture engages all employees. This requires the company’s safety organisation to deploy people strategically throughout the organisation. Creating an isolated department or outsourcing the role won’t work; safety needs to be an integrated part of all operational processes.

An effective safety organisation also produces data—lots of it—measuring both past performance and current performance, as well as a future view. The safety organisation develops strategies, is open to new ideas and takes corrective and proactive actions.

Taking action

Even with strong leadership and an enabling structure in place, companies must act to be effective.

Companies with a strong safety culture share certain action-oriented practices that include:

▪ Ongoing development programs that transfer knowledge and skills that help employees recognise unsafe situations, correct them and work safely;

▪ Comprehensive audit programs with second and third-party participants to proactively identify gaps in their processes and ensure that the safety culture remains strong and is embraced by the organisation;

▪ Effective communication programs that keep safety top of mind throughout the organisation; and

▪ Both reactive and proactive processes to analyse and prevent safety incidents. For example, incident investigations help companies learn from what has happened, while regular safety observations help prevent what might happen. In both cases, the key is to socialise the findings widely and show strong discipline in implementing recommendations.

Measuring the ROI

The return on investment that results from developing a strong safety culture includes returns that are relatively quantifiable – direct costs saved – and those that are less easily quantified – indirect costs avoided from loss of production, quality losses and equipment damage. The amount of direct costs depends in part on the regulatory framework in which the company operates, but indirect costs apply everywhere. Direct costs alone are often enough to justify investment in safety improvements.

However, focusing exclusively on the benefits of avoiding incidents does a disservice to safe and well-run businesses. Engaged leadership, the ability to diagnose issues and act to correct them, and the supportive and collaborative nature of an interdependent safety organisation spill over into broader organisational effectiveness. Dividends include stronger operational discipline, greater productivity, an improved risk profile, and higher employee morale.

Momentum is key

Safety culture transformation often takes time, and sustaining the transformation requires a plan that keeps safety alive and fresh across the business. Otherwise, the accomplishments may be temporary.

A successful safety plan should take into account employee turnover and leadership changes, maintain operating discipline, provide for regular audits, monitor data and report progress or slippage, and reinvigorate structures with carefully planned staff transitions. And finally, businesses should look for new challenges such as off-the-job safety to keep the momentum going toward the goal of zero.

In the end, safety is about protecting people, their lives and their livelihoods, but it is heartening to know that the better we get, the greater the rewards can be.

Damian Bassett is operations leader for ANZ and Pacific Islands for DuPont.