The best H&S story that I ever came across.

From the first day that embarked on my career as an Occupational Health and safety consultant I have been faced with managers and business owners who believe that the whole Health and safety exercise is an expense that cannot be justified. 

I have been searching for evidence or examples to prove that my belief that proper Health and safety Management is a vital key of good management practice.

I have perused annual reports of a number of blue chip listed companies in an effort to see whether there is actual reference to objectives ito health and safety and successes achieved in relation to productivity or increased profits but to no avail. 

Recently in a conversation with a dear friend of mine, explaining my frustration and my belief about good management practice, the story of Paul O’Neill and Alcoa was told to me. A chapter in the book “The Power of Habit: Why We Do What We Do in Life and Business” by Charles Duhigg is dedicated to this story. This was a revelation to me and certainly one of the most amazing true stories I ever came across.

Paul O’Neill were appointed as CEO of Alcoa the Aluminium manufacturing giant in 1987. In October 1987 he gave his first speech as CEO of Alcoa.

He began: “I want to talk to you about worker safety”

The room went silent.

“Every year, numerous Alcoa workers are injured so badly that they miss a day of work,” O’Neill continued. “Our safety record is better than the general American workforce, especially considering that our employees work with metals that are 1500 degrees and machines that can rip a man’s arm off. But it’s not good enough. I intend to make Alcoa the safest company in America. I intend to go for zero injuries.”

This was and is unheard of, CEO’s do not concern themselves with issues as “trivial” as Health and Safety. 

One individual in the audience tried to get the focus back on track asking about inventories.

“I’m not certain you heard me,” O’Neill continued. “If you want to understand how Alcoa is doing, you need to look at our workplace safety figures.”

Some Investors panicked and advised their clients to sell their stock immediately.

The emphasis on safety made an impact. Over O’Neill’s tenure, Alcoa dropped from 1.86 lost work days to injury per 100 workers to 0.2. By 2012, the rate had fallen to 0.125. 

Surprisingly, that impact extended beyond worker health. One year after O’Neill’s speech, the company’s profits hit a record high. 

By changing the safety habits, O’Neill improved several processes in the organization. When he retired, 13 years later, Alcoa’s annual net income was five times higher than when he started.

By Mark Roth Pittsburgh Post-Gazette

Shortly after Paul O’Neill became CEO of Alcoa in 1987, he visited the company’s huge aluminum smelter in east Tennessee.

Word had already spread that Mr. O’Neill wanted to make worker safety Alcoa’s top goal. In a meeting with management and labor leaders at the plant that day, he recalled recently, he turned to the managers and said, “From now on, we’re not going to budget for safety. As soon as anyone identifies anything that could get someone hurt, I want you to fix it and I will figure out how to pay for it.”

He then turned to the union leaders and said, “Here’s my phone number at home, and if they don’t do what I said, I want you to call me.”

About three weeks later, Mr. O’Neill got a late night call from a production worker at the plant. “You came down here and you said all this fancy stuff about safety,” the worker said, “and I just wanted you to know that for the past two or three days, we’ve had a broken conveyer belt.” The broken belt meant workers had to manually hoist hot 600-pound ingots from one spot to another.

Mr. O’Neill called the plant manager, told him to report to the smelter, get the problem fixed and call him back when the job was done. He got the call-back at 5 that morning. “There was an effective tom-tom network at Alcoa, and so I didn’t have to do that at every plant because they soon knew I meant it.”

For Mr. O’Neill, another central idea during his time at Alcoa was that people ought to be treated as equally as possible, “and so I looked for things that told people they were not as good as anybody else.”

“Zero work-related injuries and illnesses have been long-standing goals for Alcoa. But when zero first became the target, it seemed unreachable. “Accidents are inevitable” was often the response.

They’re not. We can attain zero. It is possible, and, in many locations, it is already here thanks to dedicated effort and a firm commitment to our core values, one of which is to work safely, promote wellness, and protect the environment.

As of Tuesday, July 12, 2016, 20:00 Greenwich Mean Time (GMT), Alcoa’s lost workday (days away) rate for 2016 stands at0.071, and the 2016 DART (days away plus restricted and job transfer) rate stands at 0.330. Alcoa calculates and publishes these rates in real time. Each represents the number of injuries and illnesses cases per 100 full-time workers.

In the 12-month period ending June 30, 2016:

On the same webpage the first tab is “SAFETY” what an amazing story, what an amazing company.

Alcoa’s Management does walk the talk.

Alcoa operates in more than 200 locations in 30 countries. A focused management approach where Health and Safety is the starting point do have benefits beyond the imagination of average and underperforming managers and business owners.

True leaders and captains of industry understand their responsibility and obligation to provide a safe environment for their employees and other people who might be effected or exposed to their business activities.

Sources:

The Power of Habit by Charles Duhigg

An abstract from Alcoa’s website: http://www.alcoa.com/ on 12 July 2016