In the first part of this two-part post, we discussed why health and safety needs to be aligned with the growth of the business and, at all costs, to avoid being seen as a cost centre.
How do we, therefore, make health and safety a keystone habit? Something the business obsesses over and which, ultimately, becomes the engine of business growth? There’s no easy answer to that, but this post explores a little of the history of attempts by health and safety professionals to do just, while also exploring correlations between safety performance and business growth.
There are quantifiable, demonstrable examples of companies who have made safety a keystone habit and seen the benefits in terms of [massively] improved business performance. Alcoa and LyondellBasell are two examples, both of which were CEO-led turnarounds. However, while they are great individual examples, they’re not providing the industry-wide link between safety performance and business performance that you will need. After all, if you’re in the financial services sector and present these examples to your CEO, you’re likely to reminded that “they’re metal and plastics companies and we’re not”.
There are many qualitative examples of the link between safety performance and business performance.
Paul O’Neill, CEO of Alcoa talked of the “discretionary energy” unleashed when employees are “treated with dignity and respect every day. . . A down payment on that is nobody ever gets hurt here, because we care about our own commitment to our safety, and we care about the people we work with. And it swells up to into everything you do, so it creates the sense of pride about the organization you’re involved in.”
Research into construction safety by researchers at the University of Aveiro in Portugal said that, “effective risk prevention can only be achieved by a global correlation of causal factors including not only production ones but also client requirements, financial climate, design team competence, project and risk management, financial capacity, health and safety policy and early planning.”
But what of quantitative, industry-wide data that can be used to demonstrate that safety drives business performance?
There was the study conducted by Raymond Fabius MD, et al and published in the Journal of Occupational and Environmental Medicine in September 2013 that showed that “companies that build a culture of health by focusing on the well-being and safety of their workforce yield greater value for their investors”.
In the study they found that, “companies that scored high in the American College of Occupation and Environmental Medicine (ACOEM) Corporate Health Achievement Award (CHAA) safety category outperformed the market by three times, achieving a return of 314% compared to the S&P’s 105% during the same period”.
That’s a positive from the point of view of the findings and also that the focus was on well-being and safety, not just on safety performance. However, how were the CHAA winners selected? Might there be some bias there, unconscious or otherwise? Also, do companies with poor well-being and safety performance underperform the stock market?
The same questions may be levied at the McKinsey research on diversity cited in part one of this two part post. How did they select the over performing, most diverse companies and do those companies with zero executive staff diversity significantly underperform against the industry average?
This is why the single number (a la Net Promoter Score) is so compelling. Does it exist? Might it be the total case incident rate (TCIR), or total recordable incident rate (TRIR), or perhaps even the lost time injury frequency rates (LTIFR)? Or, does the industry need a completely new ‘measure’ of health and safety success?
Have you seen research correlating any of these metrics with business performance? If so, please share via the comments below. Time permitting we’ll keep researching this topic ourselves.If You Like This Post, Please Share It!