Safety Management Is Organizational Risk Management

I have a good friend and former boss who became a partner at a large private equity investment fund with over $2B under management – a serious company.  They are focused on manufacturing companies.  They begin every monthly meeting of their portfolio companies not with financial performance, but with a review of the previous month’s safety performance for three important reasons:

• Control over safety reflects disciplined operations.
• Poor safety performance is expensive.
• Effective Safety risk management is effective organizational risk management.

It is hard to imagine a better example supporting the idea that safety management is management of company-wide risks – and strong safety professionals understand this.

You don’t have to look further than the Deepwater Horizon catastrophe to appreciate just how seriously a safety breach can affect a company.  So far, the total cost to British Petroleum exceeds $65 Billion – from a flawed well plan that did not include enough cement in a casing compounded by a valve failure.

It is interesting to review the evolution of safety department responsibilities as a way of tracking the realization by companies of how integral safety management is to organizational risk management.

Back in the early days of safety, the professionals were engineers who were basically charged with regulatory compliance – “keep us out of trouble”.

It began to occur to companies that maybe while keeping us out of trouble, the safety professionals could come up with cost-effective ways of doing that – kind of getting some “twofers”.

Current thinking has come around to recognition that actually, safety management is most effective when integrated into company-wide risk management programs, so everybody is sharing the same mission and goals – eliminating the silos.

So what drove this evolution of the Safety Professional responsibilities?

Simply summarized, it was recognition by companies of these 4 points:

• Workplace incidents disrupt workflows and sidetrack employees from planned activities.
• Strong safety management processes pre-emptively identify and mitigate risk of all kinds of incidents before they occur.
• Strong safety management inherently reduces regulatory compliance costs – you are already doing the things you should be doing.
• And as we have noted, effective safety risk management is effective organizational risk management.

There is an important lesson in this for all of you as managers of your districts: even if you are not safety managers, your responsibility for safeguarding your assets and managing risk in your organizations needs to include recognition and management of your worker’s environment.  And when that happens, you have reduced operational risk while becoming more productive.

This may all seem very abstract, but actually there is a very good guide for integrating safety management with your organizational processes: ISO 45001.

The ISO 45001 standard sets requirements for the following seven areas and provides direction on how to address each.

• Internal and external communication of the program – If you have a program, tell folks about it. Make sure that your employees all understand the program and what their individual responsibilities are.  Also, you have external stakeholders – tell investors and your community and be willing to be held accountable by them for your performance.
• Hands-on leadership, commitment and participation from ALL – Companies may not delegate all responsibility for safety management down to the safety staff. Safety starts with the senior management and will only be successful when there is clear participative leadership from the top down.
• Continuous performance evaluation – Evaluation of the operating environment and the search for improvement never ends. This requirement can only be met if there is a system in place that supports monitoring of current status, regular feedback, and evaluation of that feedback.
• Resources to properly support – It is not enough to declare that safety is a priority and hope everyone jumps on-board. Running effective safety management systems requires that sufficient time and resources be allocated to support your program.
• Include all workers – The standard requires that all employees affected by a process or procedure have input into that activity. More generally, you should engage your employees in the development and ongoing management of your safety systems.
• Processes for identifying hazards and doing something about them – This is that requirement for continuous improvement discussed above. Hazard identification can come from lots of sources, but they all lead back to your employees – when hey are invited to participate in the process, you may be surprised by how much they know.
• Integration of OH&S processes into business processes – And this is the big pay-off. Safety should not be a silo operation.  When the planning and management of safety is integrated with the rest of your company’s operations, the benefits are amplified significantly as workflows are streamlined and redundant activities are eliminated.

One last note about Safety Management Systems:  They are not computer software – safety management systems are the processes and procedures that your organization has developed, that your employees are expected to follow as part of their jobs, and that everyone from the top down is committed to. Computer software can be really helpful if it is well chosen, properly implemented and used as intended. But depending on your size and goals, you can get along without such systems.

If this resonates with you or you have questions or comments, please reach out – we would be delighted to share ideas on enhancing your safety environment.