Safety Performance as a Leading Indicator of Business Excellence – Pt1

When new CEO of Alcoa Steel, Paul O’Neill gave his first address to shareholders in 1987, the focus of his speech caused shareholders to panic and sell their shares. Those that stuck around were rewarded when Alcoa’s profits reached a record high within one year of his speech. So, what was O’Neill’s primary focus? Safety and specifically time lost to employee injuries.

Although Alcoa already had one of the best safety records in its industry, Paul thought it could do better and believed firmly that to be a world-class company, it first had to become the safest.

O’Neill’s emphasis on safety fundamentally altered Alcoa’s culture as well as its growth and profitability. When he retired in 2000, Alcoa’s market capitalization was five times more than what it was in 1987.

Like the Alcoa Steel shareholders, many organizations still see workplace safety as a pure expense. They implement ineffective “safety programs” only because they believe they must. Employees are not involved in the development resulting in lack of buy-in, and a ripple effect of making compliance and enforcement difficult.

Businesses that see safety as just another aspect of excellent business management realize that the same things that cause safety issues cause quality, production, and other loss related issues. They recognize that human capital is their most valuable resource from both a moral and a financial perspective and understand the real cost of incidents.

You can’t care about your people and ignore safety.

At the end of the day, losses due to injury, illness and property damage are paid from a company’s profits. Enlightened organizations are realizing that effective safety management demonstrates the true value the organization places on its human capital, and it will have a positive effect on the bottom line. Ironically, compliance with safety regulations and freedom from the worry about regulatory fines and other penalties is achieved as a by-product of doing the right thing for employees and the organization as a whole.

1Life is the one solution to keep your people safe so that you can run an excellent business.

Contact us today for a no obligation 60-minute consultation, together we will identify your biggest roadblocks and create a roadmap for success.