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Safety Management

Abstract

This chapter describes some of the major driving forces for the establishment of safety management in the process industries. Topics also include leadership, responsibility and ethics to manage safety and some of the skills needed are discussed. Incident ratios and potential cost impacts are stated to justify safety management systems.

Keywords

Accident ratios; Accountability; Attitude; Behavior; Casual factor; Coaching; Communication; Cost of accidents; Culture; Deflecting; Discipline; Education; Elements; Employee involvement; Engagement; Ethics; Fishbone diagram; Iceberg model; Incident investigation; Integrity; Leadership; Leading by example; Legal; Lessons learned; Listening; Loss triangle; Near miss; Observations; Performance; Probing; Procedures; Reflecting; Root cause; Simultaneous operations; Skills; Training   Operational Excellence finds its roots in safety management for the simple fact that safety management permeates every facet of an organization's operational efforts. Safety management has often been described as the control of recognized hazards to attain an acceptable level of risk. Simply put, to manage the business, you must manage safety effectively. Many understand that safety is key to achieving operating excellence (OE) goals and objectives and that OE broadly encompasses facets of the business that include provisions such as environmental management and asset integrity. While these may have their own specific areas of focus and be viewed as functionally different, it is clear that these are also very interrelated and that an organization's safety performance is key to achieving overall business goals and objectives. All too often in the oil, gas, and petrochemical industry, incidents that start out as being thought of as "safety" in nature morph into something more. For example, as we discussed with the BP Deepwater Horizon incident occurring on their offshore Macondo prospect, an incident that began as an operational abnormality quickly grew into something bigger and indeed became an incident with very material consequences. First, the inability to maintain positive control of the well led to a release of gas, which in turn led to an ignition of the gas and a serious explosion, leading in turn to injuries, fire, and loss of life, but with these very clear safety failures, the incident also then morphed into a very serious environmental disaster with uncontrolled release of crude oil into the Gulf of Mexico. So while the incident has its origins as a serious operational safety related incident it quickly escalated into something much greater in scope and impact. This is just one example of how interconnected safety is with just about all the other disciplines within an organization. Over the years we have heard many industry executives observe "how you manage safety is how you manage everything" and for those employed in the oil, gas, and petrochemical industries the need to manage safety effectively is obvious and underscored to get it right by the industry's high profile failures. Indeed, production, quality, cost, and loss control are of equal importance in measuring job performance and cannot really be separated; managing safety is integral and fundamental part of managing the entire business.

Ethics and Safety Management

Many in management regard the issue of ethics as a simple matter of personal scruples, a confidential matter between individuals and their own consciences. And these same individuals are often quick to describe any wrongdoing as an isolated incident; the work of a misdirected (rogue) employee. The thought that the management of the company could bear any responsibility for an individual's misdeeds may never enter their minds. Hoping to distance themselves from responsibility and accountability for the resulting problems, they assure themselves that "these problems of ethics have nothing to do with management." The only problem with that line of thinking is that it is incorrect-ethics has everything to do with management. Rarely do character flaws of a lone individual fully explain corporate misconduct. More typically, unethical business practice involves the tacit, if not explicit, cooperation of others and reflects the attitudes, values, beliefs, decisions, language, and behavioral patterns that define an organization's operating culture. Ethics, then, is as much an organizational as a personal issue. Managers, who fail to provide proper leadership and to institute systems that facilitate ethical conduct share responsibility with those who conceive, execute, disguise, ignore, omit, and otherwise knowingly and deliberately benefit from corporate misdeeds-or even those that just don't care and choose to do the wrong thing. In light of the outsized consequences for getting it wrong and having to deal with the tremendous cost of failure (in both monetary and human terms), many organizations are recognizing safety and environmental issues as key ethical issues. And in an effort to instill basic training on business ethics and excellence in the executive suite, many of the top tiered universities have begun in recent years to offer elective courses as part of their Master of Business Administration (MBA) curriculum, as well as continuing education encompassing operational excellence related coursework aimed at developing management skills for health, environment, and safety. For example, the Harvard School of Business offers a course called "Why You Should Care: Creating the Conditions for Excellence" (course number 2155 offered Winter session 2015) and "The Moral Leader" (course 1562 offered in the fall). They also provide through their Executive and Continuing Professional Education in the School of Public Health, coursework addressing transformational leadership training for achieving engagement and functional excellence. Similar course offerings are included in the curriculum at other leading universities such as Stanford's Graduate School of Business with first year course offerings such as "Ethics in Management" and "Strategic Leadership" (autumn quarter) which examines culture in shaping organizational performance. As discussed earlier when reviewing corporate governance in the context of OE, strong OE leadership is important, because it shapes and molds an organization's corporate culture, and it is this culture which defines and influences employee behavior with respect to safety. Tasks involving safety may be delegated, but responsibility and accountability will always remain with the organization's senior leaders, so it is essential that they promote an environment which fosters and encourages safe behavior. OE functions are typically structured to work together so as to assure operational discipline and this, coupled with other formal internal controls (i.e., financial accounting related), all serve to assure that the company effectively maintains its fiduciary responsibility to the company owners. Senior managers must acknowledge their role in shaping organizational ethics and seize this opportunity to create a climate that can strengthen the relationships and reputations on which their companies' success depends. Executives who ignore ethics run the risk of personal and corporate liability in today's increasingly tough legal environment. In addition, at least in one locale, they deprive their organizations of the benefits available under new US federal guidelines for sentencing organizations convicted of wrongdoing. These sentencing guidelines recognize for the first time the organizational and managerial roots of unlawful conduct and base fines partly on the extent to which companies have taken steps to prevent that misconduct. Prompted by the prospect of leniency, many companies have rushed to implement compliance-based ethics programs. Often designed by corporate counsel, the goal of these programs is to prevent, detect, and punish legal violations. But the entire organizational ethics issue means so much more than avoiding illegal practice; and simply providing employees with a rule book will do little to address the problems underlying unlawful conduct. To foster a climate that encourages exemplary behavior, corporations-led by their senior management team and driven through the line management chain of command-need to establish and maintain a comprehensive approach that goes beyond the very limited (and often punitive) legal compliance stance. This often involves a performance approach that advocates continuous improvement so as to apply lessons in a manner that builds upon successes and that learns from failures in a positive manner. And an Operational Excellence management system is just this sort of comprehensive effort many organizations use to shape and drive exemplary behaviors and decisions on a continuum by the workforce. An integrity-based approach to ethics management combines a concern for the law with an emphasis on managerial responsibility for ethical behavior. Though integrity strategies may vary in design and scope, all strive to define companies' guiding values, aspirations, and patterns of decisions making as well as daily conduct. When integrated into the day-to-day operations of an organization, such strategies can help prevent damaging ethical lapses while tapping into the human desires for positive achievement and alignment with basic moral principles. Then an ethical framework becomes no longer a burdensome constraint within which companies must operate, but the governing ethos of an organization. Errors of judgment rarely reflect an...