By: Monica Meyer
As the song goes – The wise man built his house upon the rock and the house on the rocks stood strong. The foolish man built his house upon the sand and the house on the sand went SPLAT!
If business strategy is still an evolving concept with new paradigms and approaches established every year, safety strategy has an uphill climb to reach great levels of effectiveness. As EHS Support has been involved throughout all phases of our clients’ deals and asked to provide insight on safety strategies, we have identified common problems private equity firms need to overcome to improve both their safety planning and execution within their portfolio companies so that successful integration is achieved and unnecessary costs are avoided.
- Grasping onto buzzwords. Many companies like to tout phrases like “zero injuries,” “employee engagement,” “world-class safety performance” and “top-tier.” When asked to define the clear-cut plan or roadmap that has helped them achieve zero injuries or world-class safety performance, there is no substance or details involved. These phrases are empty and without meaning.
- Having a programmatic approach. Rather than thinking through what the needs are, what success looks like, what the destination is, what steps to take or not take, and how to measure value-add, many firms jump to solutions, programs, training and other initiatives. This results in safety efforts often being awkward fits for the companies. Employees then think safety is nothing more than a series of programs of the month and are unable to understand why choices were made, so support is minimal.
- Ignoring culture. Efforts primarily focus on incident prevention without considering the gap between the desired and current culture. Who has evaluated the safety culture of each company? Do they match up or are they worlds apart? A strong safety culture is why compliance and excellence efforts succeed or fail. Culture is the ultimate sustainability mechanism of a corporation.
- Focusing primarily on failing less. In Terry L. Mathis’ and Shawn Galloway’s 2013 book, “STEPS to Safety Culture Excellence,” they wrote about this common approach to safety strategy: “We call it the ‘Perpetual Cycle of Avoiding Failures.’ It begins with reviewing the incident rate data and setting goals for reducing the incident rates to a new level. This targeted lowering of the failure rate drives the development of initiatives to accomplish the goal. Often, the relationship between these initiatives and the goal is unclear, uncertain or even missing. But a goal necessitates effort to reach it, and programs and other efforts that have safety in the title can create the perception of being aimed at the goal. Even if the initiatives are well designed to achieve the desired improvement, they are not always carried out effectively and often lack process metrics to measure the effectiveness of the effort.”An example of focusing on failing less would be the idea to lower incidents from the year before to zero injuries. Leadership is now focusing their mission on managing a number. This now creates the mindset that zero equals excellence in safety. It does not. People then internalize, “If what I do does not produce an incident or injury, it is therefore safe.” This is also not true. Correlation doesn’t always indicate causation. Avoiding failure is not a strategy. The strategy focuses on how to get there instead of fixating on what “there” looks like.
- Competing with the business strategy rather than ensuring fit and value-add. Safety will never become a core value within a company culture until the safety strategy is aligned with and supports the business strategy, rather than hindering or constricting it. Believing safety competes with production is outdated thinking. Safety enables profitability and productivity. It provides value. The strategy isn’t a detailed plan of action, nor is it a corporate vision or an objective or a mission statement. The strategy is not what to think. It’s how to think. The business strategy aims at positioning a company for long-term value creation, profitability, sustainability, and growth.
If your portfolio companies’ safety strategy consists mostly of empty buzzwords, is heavy on new programs, ignores the culture, focuses primarily on failing less and is not integrated into the business strategy, you are not creating sustainable value. You are building your safety program on a granular foundation made of sand that will crumble. It is time to rethink your safety strategy. Let EHS Support help you achieve more value throughout your hold period.
For information on how EHS Support can help you manage your portfolio companies’ safety programs, please contact Monica Meyer at Monica.email@example.com.