Zero Injury Culture: More Than a
Mantra
2013 ASSE Heart
of America Regional PDC
Keynote
Calvin (Cal) Beyer
April 19, 2013
Hindsight is a wonderful thing but
foresight is better, especially when it
comes to saving life, or some pain!
-- William Blake
Integrated Risk Management Model:
PQRS Levers for Profitability
Productivity
Quality
Risk
Safety
Integrating Safety &Claim Management
•
•
•
•
•
•
Injury
Prevention
Claim
Management
Hiring practices
Drug testing
Orientation
JHA/JTA
Training
PPE/Eqpt
•
•
•
Occ med clinic
Prompt
reporting
Root cause
analysis
Cost
Containment
• PPO enrollment
• Utilization
review
• Modified duty
Return to Work
Discussion Topics
Workers Compensation: A Call to Action
Risk Performance Metrics
Safety Culture Building Blocks & Zero Injury
Culture Lifecycle Development
Business Case & Sustainable Advantage
Foundational Questions
• Is Workers’ Compensation a source of competitive advantage for
your company?
• How does your company measure safety performance?
• Does your company consider safety as the absence of injuries or
the reduction of risk?
• How do you know if safety is ingrained in the hearts and minds of
your employees and embedded in the culture of your company?
A (Wake-Up) Call to Action
•
•
•
•
•
•
•
•
Downward trend in WC payroll due to recession is reversing
Hiring uptick and increased frequency of new hire injuries
Musculoskeletal disorders comprise ~ 1/3 of occupational injuries
Aging workforce claims increasing
Workers Compensation is distressed and carriers increasing rates
NCCI WC experience modification formula change
Medical cost inflation and other indirect cost multipliers increasing
NCIB reports of escalating WC claimant fraud (37% increase in
2012)
Crisis = Challenges or Opportunities?
Workers’ Compensation:
Lead Line of Insurance
1
2
3
Largest Premium
Up to 45-50% of
insurance buy
Loss Leader
Most frequency &
severity of claims
$ 10000
$ 30000
Frequency of
$ Severity
50000
Sprains/strains can
be >50% of claim
costs with highest
development costs
Workers’ Compensation:
Competitive (Dis-)Advantage?
• Workers’ Compensation can be a source of a competitive advantage
– Decreasing employee injuries impacts productivity and
profitability
• Decreases direct and indirect expenses
– Reduces your company’s total cost of risk
» Decreases cost of goods sold
• Increases margin
– Impacts company image and reputation
– Reinforces corporate social responsibility and sustainability
Game on! There are Winners and Losers in Workers’ Compensation
2011 Occupational Injury Statistics
Fatalities
Injuries/Illnesses
4,609 in 2011
Rate = 3.5/100k full-time workers
~ 3 M occupational injuries & illnesses
Rate = 3.5/100 full-time workers
1.18 M cases with lost workdays
Lost Work Days
Rate = 117/10k full-time workers
Source: www.bls.gov/news.release/cfoi.nr0.htm
Median # of Lost Work Days By Industry
(Overall median = 8)
17
Transportation & Warehousing
14
Construction
13
Utilities
10
Manufacturing
Source: http://www.bls.gov/news.release/osh2.t01.htm
Median # of Lost Work Days By Injury
(Overall median = 8)
28
Carpal Tunnel (tendonitis = 14)
27
Fractures
25
Amputations
10
Sprains/Strains/Tears
Source: http://www.bls.gov/news.release/osh2.t05.htm
OSHA’s Big 4 Construction Hazards
Falls
Caught
Between
Struck By
Electrocution
Focus attention on Hazard Recognition & Employee Orientation/Training
Manufacturing Workers’ Compensation
Claims
Top 5 claims types= 84% of frequency and 88% of
severity (major insurance carrier report)
1. Sprains/strains (35% of claims; 45% of costs)
2. Caught between
3. Struck by/against
4. Lacerations
5. Foreign object in eye
Institute Behavioral Safety Observations
Stop Relying Solely on Traditional
Measures
Examples of traditional measures
•
•
•
•
•
Incident rates
Severity rates (DART)
WC Experience Modification Ratings
Average claim costs
OSHA inspections, citations and fines
Limitations of Traditional Measures
• “More of the same” does not yield a different result
• Typically yield incremental improvements
• Do not drive or reinforce cultural development
Breakthrough Solutions Require New Approach & Measures
The Risk of Driving Forward While
Looking in the Rear-view Mirror
Copyright © 2012 Rockwell Automation, Inc. Used with permission.
Hierarchy of Measurement
Key Challenge for Safety Profession: Leverage Analytics into Insights
Data
Measures
Metrics/KPIs
Analytics
Information
with or without
context
Statistics
highlighting
past
performance
Perspectives
of past and
current results
to forecast
future
performance
Insights
driving
business
decisions and
performance
Copyright © 2012 Rockwell Automation, Inc. Used with permission.
18
Lagging vs. Leading Indicators
Lagging Indicators
“Downstream” measures or
trailing indicators
Feedback on data collected
and analyzed “after-the-fact”
Passive metrics of prior results
Don’t provide insight into the
prevention-based activities
that influenced these results
Copyright © 2012 Rockwell Automation, Inc. Used with permission.
Leading Indicators
“Upstream” measures
Prospective and “before-thefact”
Designed to influence real-time
outcomes & current activities
Focused on behaviors and
outcomes
Provide almost immediate
feedback on present activities
Risk Performance Metrics
Safety Example
Lagging
(past results)
Workers’ Comp
Experience
Modification Rating
• OSHA recordable
incident rate (TRIR) or
Days Away from Work
Restricted or
Transferred (DART)
• Total lost workdays
• Average cost per claim
•
Current
(present snapshot)
•
% participation in
pre-shift “stretch-nflex”
• Daily record of
inspections
• End-of-shift record of
injuries or incidents
• Daily job safety
observations
Copyright © 2012 Rockwell Automation, Inc. Used with permission.
Leading
(prevention activities)
•
•
•
•
•
% of machinery in
compliance with
standards
# of pre-placement
assessments completed
# of safety orientations
conducted
% of safety inspections
completed
# of safety briefings held
What is Culture?
• Complex system of shared beliefs, values and
behaviors
• Set of prevailing and enduring characteristics:
– Woven into the organizational fabric
– Organizational DNA that is transmitted to new employees
Every company and work group has a prevailing culture
and may have one or more subcultures
Culture = Workplace Norms
• Defines the norms of the “workplace”
• Norms = accepted precursors and performance
–
–
–
–
Spirit and attitude
Rules of conduct
Motivating factors
Determinants of success vs. failure
Requires conscious and deliberate effort to change culture
Overview of Corporate Safety Culture
•
Elements of safety culture
Attitudes
Assumptions
Copyright © 2012 Rockwell Automation, Inc. Used with permission.
Beliefs
Values
Norms
Safety Performance Gap
The difference between what is expected
vs. what is accepted by the company’s
leadership, supervisors & employees
Safety Culture: The ABC’s
Accountability
Buy-In
Commitment
Responsibility
Awareness
Investment
Reinforcement
Education
Recognition &
Rewards
Compliance
Continual
Learning
Enforcement
Process
Improvement
History of Zero Injury Culture
Zero Injury Techniques
Making Zero Injuries a Reality
Construction Industry Institute
Construction Industry Institute
1993
2003
Listed 170 techniques
9 high impact techniques
Zero
Injury
Culture
Incident & Injury-Free (IIF®)
Expanding the Vision and Reach
JMJ Associates
Incident & Injury-Free® CEO Forum
Circa 2003
Incepted 2010-11
Celebrating 25th year in 2013
Partnering with insurance industry
Notes: 1. Construction Industry Institute (CII) at the University of Texas (Austin)
2. JMJ Associates (JMJ.com) serves mining, energy and construction industries is celebrating 25th anniversary in 2013
3. As of March 2013 there are 17 construction companies participating in IIF® CEO Forum.
9 High Impact Zero Injury Techniques
1. Demonstrated
management
commitment
2. Staffing for safety
3. Planning (pre-project
& pre-task)
4. Safety education
(Orientation &
specialized training)
5. Worker involvement
6. Evaluation and
recognition/reward
7. Subcontractor
management
8. Accident/incident
investigations
9. Drug/alcohol testing
Focus on Injury Prevention
•
•
•
•
•
•
Establish top-down management accountability culture
Employ hiring standards and practices
Institute new employee orientation
Embrace engineering controls and factory automation
Foster proactive safety supervision
Institute behavior-based safety process
– Recognize safe work practices
– Correct “at-risk” attitudes and behaviors
Expect and Only Accept Safe Work Attitudes, Behaviors & Conditions
Injury Prevention Enablers
Injury Prevention Force Multipliers
Zero Injury Safety Culture Life Cycle Process
Challenging
Status Quo
Convincing
Stakeholders
Overcoming
Resistance to
Change
Raising Up Leaders
(“Torch Bearers”)
Renewing
Focus
Zero Injury Safety Culture
Development Life Cycle
Source: Building Profits (Jan/Feb 2013;
Construction Financial Management
Association. Used with permission.
Life Cycle Elements
Instituting Zero Injury Culture
Summary Action Steps
1
Assess Current Situation
2
Safety Culture Health Check
3
Present Business Case
4
Execute Plan & Monitor Results
Obstacles to Overcome
•
•
•
•
•
•
•
•
Creative, innovative problem solving abilities fosters shortcuts
Rationalization of inherent hazards
Changing field jobsite conditions
Resistance to change (status quo)
Production/schedule pressures
Traditional work methods: “Old guard” mentality
Organizational silos
Industry norms
Employ change management techniques to institute cultural change
Change Management Cycle
Change
Ownership
Attitudes
Involved
Concerned
Aware
Unaware
Time
Reducing Cycle Time of Change
•
•
•
•
Seek assistance and resources from insurance partners
Identify desired end-state (vision & expectations)
Benchmark “best of class” companies
Solicit supervisory & employee participation in setting and
measuring performance objectives
• Conduct baseline safety culture assessment
• Consider outside facilitator/consultant to help as change
agent and process master
• Celebrate successes!
Business Case for Change
•
•
•
•
•
Align safety focus with productivity and profitability results
Dual focus: loss minimization and profit maximization
Shift to leading indicators to focus on prevention-based activities
Add indirect cost multiplier to calculate total cost of accidents
Apportion premium and charge-back loss costs to operating units
(departments/divisions)
• Fund for preventive and corrective actions from corporate budget
(costly to have accidents, not to prevent them)
• Promote and incent through bonus managers & supervisors based
upon both safety & production performance
Creating Sustainable Advantage
•
•
•
•
•
•
•
Becoming or remaining an employer of choice
Experiencing less voluntary employee attrition
Retaining existing customer base
Attracting new customers
Expanding market share
Enhancing the ability to forge strategic partnerships and alliances
Differentiating from competitors
Make Safety Your Brand!
Risk Leadership
“The ability to learn faster than
your competitors may be the only
true competitive advantage.”
-- Arie DeGeus
Contact Information
Cal Beyer
Murray Securus
39 N. Duke Street
Lancaster, PA 17608
Phone: 717.397.9600
www.murrayins.com
cbeyer@murrayins.com
@Riskleadership and @ContractorRisk
www.linkedin.com/in/calvinbeyer/