Paul O'Neill, the new CEO of Alcoa, focused his first speech to investors on improving workplace safety instead of discussing typical business topics like profits and growth. Investors were confused by this unusual focus and one advised clients to sell their stock, predicting it would hurt the company's performance. However, within a year profits hit a record high under O'Neill's leadership. By prioritizing safety, O'Neill improved Alcoa's culture and operational performance, leading to significantly higher profits and market value over his tenure. This story shows how focusing on safety can improve business outcomes.
2. A Brief Story – Alcoa Experience
A few minutes before noon, the new chief executive, Paul O'Neill, took
the stage. He looked dignified, solid, confident. Like a chief executive.
Then he opened his mouth. "I want to talk to you about worker safety,"
he said. "Every year, numerous Alcoa workers are injured so badly that
they miss a day of work."I intend to make Alcoa the safest company in
America. I intend to go for zero injuries."
The audience was confused. Usually, new CEOs talked about profit
margins, new markets and 'synergy' or 'co-opetition.' But O'Neill hadn't
said anything about profits. He didn't mention any business buzzwords.
Eventually, someone raised a hand and asked about inventories in the
aerospace division. Another asked about the company's capital ratios.
"I'm not certain you heard me," O'Neill said. "If you want to understand
how Alcoa is doing, you need to look at our workplace safety figures."
Profits, he said, didn't matter as much as safety.
Sources : Huffington Post, 27 Feb 2012
3. A Brief Story – Alcoa Experience(cont’d)
The investors in the room almost stampeded out the doors when the
presentation ended. One jogged to the lobby, found a pay phone, and
called his 20 largest clients.
"I said, 'The board put a crazy hippie in charge and he's going to kill the
company,'" that investor told me. "I ordered them to sell their stock
immediately, before everyone else in the room started calling their
clients and telling them the same thing.
"It was literally the worst piece of advice I gave in my entire career," he
said.
Within a year of O'Neill's speech, Alcoa's profits would hit a record high.
By the time O'Neill retired in 2000 to become Treasury Secretary, the
company's annual net income was five times larger than before he
arrived, and its market capitalization had risen by $27 billion. Someone
who invested a million dollars in Alcoa on the day O'Neill was hired would
have earned another million dollars in dividends while he headed the
company, and the value of their stock would be five times bigger when he
left.
Sources : Huffington Post, 27 Feb 2012
6. But How?
Creating and Improving safety culture is the
foundation of Operational Excellence for
Sustainable Business
7. Creating and improving Safety
Culture WHAT,WHY and HOW?
1. Culture – What is it? How to measure?
2. Why is it important?
3. Can You Change the culture?
8. What is Culture?
Culture : “Enough people doing same thing long enough”
(Critical mass & sustainability)
Safety Culture,
… is about how people think, believe, mean and intention &
behavior in relation of safety.
… is how to change people motivation of safety, from “they
scare with the rule” to be “they love to work safely, they
care others, they love their future and families etc”
By developing “Safety Culture”, we can sustain people safety behavior
because people want it, they believe in it and the highest intention in
their life, and of course we need to help them with high standard OH&S
system in place.
9. Why Culture is Important?
Jusk ask oil and gas off shore
• Why do fires continue to
occur on offshore platform?
• Why do major lossess of
containment occur?
• What causes management to
forget the lesson from the
past?
10. Causes of Injuries
The experience tell that...
The majority of process
and personal incidents,
injuries are caused by
unsafe act and
behavior NOT unsafe
condition
4%
96%
Unsafe Act
• Short cut
• Rushing
• Rule
violation
• Procedure
deviation
• Attitude
• Use of PPE
• etcUnsafe
condition
11. Safety Culture and Operational
Discipline (GE Experience)
• In 2001, GE initiated a Six
Sigma project to assess
causes for significant Process
Safety Incidents in 2000.
• OD (Operational Discipline)
was identified as a dominant
factor in 53% of the
incidents
FAILURE TO HAVE AND FOLLOW GOOD
PROCEDURES IS A MAJOR CAUSE TO INCIDENT
12. Can you change the culture?
Yes you can. By using appropriate system and
methodology you can shift your safety culture
Weaker
Culture
Stronger
Culture
14. Safety Culture is developedand improved
through integrated4 pillar approach
Technical
Capability
Management
Infrastructure
People
Mindset
Leadership
•How the asset and resource configure to
create value add
•Elemens of this are Management
Commitment, Hazard and Risk
Management, Working System,
Inspection and Monitoring, Reporting
and Communication, Audit System
•Formal structure, process and system
that support in achieving optimization
of Technical Capability Pillar
• Elements of ths pillar are : Organization
Design, Performance Management,
Support Function, Capability Building
Process, Contractor Management,
Continuous Improvement
•Perception of the people toward system
and management approach has
implemented
• This process consist of several element
that are Attitude, Competency,
Communication, Team Work, Working
Environment
•Process of defining the desired
state, setting up the team to
succeed, and engaging in the
discretionary efforts that drive the
safety values
• Element in this pillar such as :
Vision, Inspirational
Communication, Supportive
Leadership, Personal Recognition,
Role Model, Performance Focus
15. Gathering the data
Data Analysis &
Identify the
opportunity
Setup Initiatives
Situation Assessment
Conduct diagnostic with
focused to 4 pillar of safe
operational excellence to
understand current
condition, develop action
plan and initiatives
Launch program
Training / Workshop
Field Coaching
Monitoring Result
Plan Realization
Initiatives realization
and capturing
improvement
opportunity
SUSTAINABILITY PROCESS
After Action Review
Lesson Learned
Stand alone
Make It Stick
Program Evaluation,
review the change,
lesson summary, and
handover to stand alone
Establish Team
Team conditioning
Communication &
Condition Leadership
Decide & select Unit
Areas
Preparation
Team preparation (
team selection, project
planning, setup
milestone)
PROSPEX-5MethodologyforCulturalChangeconsistof4main
stages
16. IllustrationduringimplementProSPEx-5Way :
Coaches together
with Line Leaders
safety do
assessment the unit
area for
improvement
Implement the
improvement initiatives on
the job Intensive
coaching at the
field
Coach observe
the progress and
influence the
focus to achieve
result
Achieve the performance
improvement and
enjoyable work climate
17. By using PROSPEX-5 concept, all parameters of OH&S Implementation were
clustered into 4 parts and assessed
1. Technical Capability (Management Commitment, Hazard Risk Management,
Working System, Inspection and Monitoring, Audit System, Accident and
hazard investigation and reporting)
2. Management System (Organization Design, KPI and Visual Management,
Performance Management, Contractor Management, Capability Building,
Continuous Improvement) :
3. People Mindset : Attitude, Competency, Communication, Team Work,
Working Environment, Value and Belief
4. Safety Leadership : Vision , Inspirational Communication, Personal
Recognition, Role Model, Supportive Leadership, Performance Focus
We’re using 4 combine method to assess the safety culture
1. Interview
2. Survey
3. Observation
4. Document Revie
How to assess the culture?
18. Some of Tools we used to measure culture
Nama :
Posisi :
No
Tidak
Pernah
Jarang Sering Selalu
1
2
3
4
5
6
7
8
9
10
11
12
13
14
Safety Leadership Assessment
Apakah pimpinan menaruh perhatian untuk penggunaan peralatan yang sesuai?
Apakah pimpinan menyediakan penghargaan untuk kinerja safety?
Apakah pimpinan mengapresiasi safety improvement/good practice yang sudah dilakukan?
Apakah pimpinan mempromosikan safety di setiap situasi?
Apakah issue safety dikomunikasikan ke seluruh lapisan karyawan?
Apakah pimpinan mengadakan bincang-bincang safety dengan karyawan?
Apakah pimpinan memberikan KPI safety yang jelas?
Apakah pimpinan terlibat dalam aktivitas safety? (investagasi, audit, inspeksi)
Apakah pimpinan menanamkan nilai-nilai safety ke karyawan?
Apakah pimpinan melakukan follow up terhadap nilai safety?
Apakah pimpinan mengikuti aturan safety?
Apakah pimpinan melakukan tindakan jika menemukan penyimpangan safety?
Pertanyaan
Apakah pimpinan memberikan visi safety yang jelas?
Apakah pimpinan menempatkan safety sebagai yang paling utama?
Nama :
Posisi :
No
Tidak
Setuju
Kurang
Setuju
Setuju
Sangat
Setuju
1
2
3
4
5
6
7
8 Masih banyak hal yang bisa dilakukan untuk memperbaiki kondisi safety yang ada
9 Atasan saya mengecek pekerjaan saya secara reguler
10 Atasan saya memberikan support yang saya perlukan untuk menyelesaikan pekerjaan
11 Atasan saya memberikan panduan yang jelas untuk mencapai tujuan
12 Saya tidak merasa disalahkan jika ada masalah di tempat kerja
13 Atasan saya terbuka untuk menerima feedback dari karyawan
14
15 Saya merasa keberhasilan saat ini karena dukungan dari rekan/atasan
Safety Mindset Survey
Saya tidak merasa sakit hati apabila atasan/rekan memberikan feedback
Action Log safety yang ada sudah difollow up dengan baik
Meeting yang saya ikuti berjalan efektif dan tidak banyak membuang waktu
Pertanyaan
Saya tahu apa kontribusi saya untuk menjaga keselamatan kerja
Saya bangga dengan pencapaian safety di tempat kerja
Saya merasa terlibat untuk ambil bagian di bidang safety
Masalah yang ada sudah diselesaikan dengan metode yang tepat
Setiap karyawan mempunyai tanggung jawab dan pekerjaan yang jelas tentang safety
Element 1 2 3 4
Kebijakan untuk safety
belum tersedia
Kebijakan ada tapi hanya
bersifat lisan
Kebijakan sudah ada dalam
bentuk tertulis tapi tidak
semua karyawan tahu
Kebijakan sudah ada secara
tertulis, sudah
dikomunikasikan ke seluruh
karyawan dan mereka
mengerti
Kebijakan safety belum
dituangkan ke dalam bisnis
proses yang ada
Beberapa kebijakan safety
sudah dituangkan ke dalam
business process tapi belum
terdokumentasi
Sebagian kebijakan sudah
dituangkan ke dalam
business process dan
terdokumentasi
Seluruh kebijakan safety
sudah dituangkan ke dalam
business process dan
terdokumentasi
Business Process yang ada
tidak pernah dilakukan
audit untuk mengetahui
konsistensi penerapannya
Audit dilakukan tapi tidak
secara regular
Audit dilakukan secara
reguler tapi hasilnya kurang
difollow up
Audit dilakukan secara
regular dan hasilnya
difollow up sehingga ada
peningkatan yang dihasilkan
Standard untuk penerapan
FPE belum tersedia
Hanya 2dari 8Standard FPE
yang tersedia dan
didokumentasikan
5dari 8Standard FPE
tersedia dan
didokumentasikan
Seluruh standard FPE
tersedia dan
didokumentasikan
< 30% standard dipatuhi 30%-60% standard dipatuhi 60%-85% standard dipatuhi >85% Standard dipatuhi
Kepatuhan terhadap
standard tidak pernah
dinilai
Kepatuhan terhadap
standard dinilai tapi tidak
secara reguler dan tidak ada
dokumentasi
Kepatuhan terhadap
standard dinilai secara
reguler tapi hasilnya kurang
difollow up
Kepatuhan terhadap
standard dinilai secara
reguler dan hasilnya
difollow up sehingga ada
peningkatan
Safety Technical Capability Assessment Grid
Policy &
Process
Standard
and
Procedure
Element Aspect 1 2 3 4
Hak untuk pengambilan
keputusan tidak
didefinisikan
Hak pengambilan
keputusan hanya
didefinisikan untuk
level manajer ke atas
Hak pengambilan
keputusan sudah
didefinisikan untuk
semua level
Hak pengambilan
keputusan sudah
didefinisikan secara
jelas dan tersistem
untuk semua tingkatan
level
Hak pengambilan
keputusan dilakukan
oleh tingkat jabatan
tertinggi
Hak pengambilan
keputusan
diasosiasikan dengan
posisi atau jabatan
Tingkat jabatan
terendah merasa
diberdayakan haknya
untuk mengambil
keputusan yg terkait
dengan keahliannya
saja
Pengambilan
keputusan cenderung
diberikan kepada
tingkat jabatan
terendah yg
memungkinkan
Job tidak didefinisikan
jelas pada semua level
Job didefinisikan jelas
untuk top level
Job didefisikan secara
jelas untuk semua level
Job Desc yang
komprehensif ada
untuk menjabarkan
tugas dan tanggung
jawabnya
Tidak ada struktur
organisasi yang jelas
Struktur organisasi ada
tapi hanya sebatas
mencantumkan posisi
Struktur organisasi ada
dan menggambarkan
hubungan yang jelas
tiap posisi (straight or
dot) dan jumlah
headcount tapi tidak
update
Struktur organisasi ada,
lengkap, dan diupdate
secara reguler. Struktur
tersebut
dikomunikasikan ke
seluruh lapisan
karyawan
Aligned structure
Struktur yang ada
disusun berdasarkan
fungsi yang harus dapat
bekerja secara optimal
sendiri
Organisasi terorganisir
lewat fungsi tapi
hubungannya tidak
jelas terjabarkan dan
berdiri sendiri
Organisasi terorganisir
lewat fungsi dan
hubungannya
terjabarkan secara jelas
tapi tidak dijalankan
sepenuhnya
Organisasi terorganisir
di dalam value stream
Safety Management System Assessment Grid
Decision Process
Job Design
Organization
Design
20. 0 0.5 1 1.5 2 2.5 3 3.5 4
Pride
Execution
Support
0 0.5 1 1.5 2 2.5 3 3.5 4
Vision
Engagement
Role Model
Rewards and Recognition
Communication
Technical Capability
Management Infrastucture
People Mindset
Visible Leadership
-1,09
-0,93
-0,75
-0,45
-1,10
-0,46
-0,80
-0,10
-0,33
-0,53
-0,40
0 0.5 1 1.5 2 2.5 3 3.5 4
Policy and Business Process
Standard and Procedures
Skill and Knowledge
Quality System
0 0.5 1 1.5 2 2.5 3 3.5 4
Organization Design
KPI and Visual Management
Performance Management
Contractor Management
0,10
-0,80
-0,80
0,00
-0,10
21. Take away
• A strong safety culture is the foundation to achieve
operational excellence.
• Safety culture can be measured, compared, and correlated
with injury performance as well as business performance..
• Measurement techniques allow us to target improvement
efforts
• To sustain safety performance
• We need Aligned strategy with your values and principles
• Visible leadership commitment
• Operational Discipline
23. “You will achieve the
level of safety that you
demonstrate you want to
achieve”
25. Handito Aji Saroso,ST, Lean Six Sigma Black Belt
PROSPEX-5 Product Manager
Building and Plant Safety Institute
Mobile (+62) 81230301552
Office (+62) 80873270
Email : handito.saroso@bpsi-safetyinstitute.com
www.bpsi-safetyinstitute.com