When we read about "economy airlines" not focused on safety—experiencing repeated engine failures—we can only wonder what kind of safety culture each has within his or her organization. Airline expert Jim Brauchle recently characterized one such airline as "an accident waiting to happen!"
Michael Belcher, while national president of the American Society of Safety Engineers, commented, "One of the most infamous workplace disasters was the space shuttle Challenger explosion which killed seven crew members in 1986. While the reasons initially attributed to the disaster were technical in nature, NASA's flawed safety culture contributed to the explosion."
We see private- and public-sector organizations, as well as nonprofits, with workers compensation experience modifications in the 200s—therefore, paying more than double the standard premium for this statutory insurance. We need to ask: why are some organizations "accidents waiting to happen"?
Experience modifications emphasize frequency of injuries more so than severity. So, a chronic safety problem is in place with these high "x-mod" organizations. At the same time, we see example upon example of organizations who rarely, if ever, experience losses and have an "x-mod" well under the norm of 100—even at 60 percent, where their workers compensation rates are discounted 40 percent because of their outstanding safety records! In addition, they experience little or no costly lawsuits because of their positive safety performance—nor any property losses, as others experience when accidents happen.
Why Such Divergence?
I'm convinced the difference is found in the safety culture within a company's overall organizational culture. The definition of a sound safety culture is not "rocket science"; yet, to be effective, it needs to be part of an organization's overall culture. This is as it should be.
The critical point here is that safety should NOT be in its own silo, separate and apart from an organization's overall culture. All elements of a corporate culture must demonstrate collaborative, cross-functional engagement throughout the organization—not in individual, separate silos.
Changing Corporate Culture
So, what's a corporate culture? It has been defined in many ways. The following are examples.
The way it conducts business, treats employees, customers, and the wider community
The extent to which freedom is allowed in decision-making, developing new ideas, and personal expression
How power and information flow through its hierarchy
How committed employees respond to the organization's overall goals and objectives.
Most agree that organizational culture is unique to every organization and is difficult to change. Yet, especially with accident-prone organizations not committed to safety, change should become a high priority until the desired culture is achieved.
The steps usually suggested to change culture in an effective manner are the following.
Fully understand the current culture.
Consider accepting outside counsel.
Consider both top-down and bottom-up participation.
The revision of both mission and vision statements—and especially values statements—can be helpful to formalize and reinforce cultural change. It requires long-term strategic goals and shorter-term operational objectives followed by action plans that convert such words into positive actions. The WHAT of planning is followed by the HOW of achieving desired results and outcomes.
When the focus is on the safety dimension of your organization's overall culture, the following elements need to be included.
Both top-down and bottom-up "buy-in" to safety
Safety costs considered an investment, not an expense
Application of the quality management principle of "continuous process improvement"
Professional development (training and education) at all levels
An ongoing system of risk control (prevention, mitigation, and/or elimination (avoidance) of risk)
It's critical that middle management safety professionals make these good things happen operationally. Top-down leadership and vision are essential. Without safety professionals at all operational levels, a safety culture will be ineffective.
Bring in the Balanced Scorecard
A leadership tool that can bring all these elements together is the balanced scorecard. (See "Insurance Innovation—Balanced Scorecard," IRMI.com.) On a single page, it includes an organization's mission, vision, and values, plus its long-term strategic goals and annual operational objectives. The operational objectives are structured—and balanced—under the following headings.
Continuous process improvement
Setting your mission, vision, values, and strategic goals first—and then following through with specific, measurable objectives—is an effective way to assure that your organizational and safety cultures are what you want each to be. Then you can relax and enjoy the benefits of a sound safety culture, in other words, a quiet night's sleep!
A sample copy of a balanced scorecard for an insurance organization—along with a blank template for your use—is available from the author (without cost) simply by sending a request to [email protected].
The original version of this article appeared in the Kern Business Journal, issue June–July 2018, and is used here with permission of TBC Media, Bakersfield CA.
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