CHAPTER 1

INTRODUCTION AND SCOPE

It has long been acknowledged that when not properly evaluated and controlled, changes in physical equipment in a facility can lead to serious incidents with potentially severe consequences. Management-of-change (MOC) systems, replete with a variety of electronic systems, flow charts, and checklists, have been developed by a number of reliable organizations throughout the world to deal with these physical changes. However, other types of changes such as changes in job responsibilities, loss of key personnel, or even changes in shift hours may not be included in an MOC program. It is less well understood that these and other nonphysical changes, collectively referred to as “organizational changes,” can also lead to serious incidents with potentially severe consequences. Due to their focus on managing physical changes, most MOC systems have overlooked or only superficially addressed organizational change management and the impact of organizational changes that affect process safety. Although there are many types of organizational changes that a company can make, the focus of this book is on changes that may affect process safety. When the generic term organizational change management (OCM) is used throughout this text, keep in mind that it only refers to those changes which may affect process safety.

1.1 CASE STUDY: HICKSON AND WELSH LTD.—ENGLAND (1994)

On the afternoon of September 21, 1992, a jet of flame erupted from a manway on the side of a batch still at the factory of Hickson & Welch Ltd., Wheldon Road, Castleford, West Yorkshire, England. A total of 5 people were killed and another 17 were injured, in addition to over 100 reports of toxic effects.

This incident happened during the cleanout of the “60 Still Base,” which contained a sludge rich in dinitrotoluenes and nitrocresols. (These compounds can be explosive in the presence of strong alkali or strong acid and have also been known to explode when exposed to heating alone under certain conditions.) This vessel had not been cleaned out during the 30 years that it had been in service. Prior to the cleaning, the sludge had been heated using steam coils built into the still, and instructions were given to not let the temperature of the sludge exceed 90° C. Unfortunately, the only temperature probe in the still was not in contact with the sludge.

In August 1991, the management structure of the Fine Chemicals Division of Hickson International, plc was reorganized. The structure changed from a linear structure to a matrix in which the role of plant manager was eliminated. Instead, the plant was managed through coordination of senior operatives who were appointed to act as team leaders.

1.1.1 Lesson Learned

The reorganization resulted in the area manager being overloaded and unable to provide the attention necessary to properly plan the cleanout of the 60 Still Base. Although there was evidence that some technical people within the company were aware of the potential for self-heating of the nitrotoluenes, this information was not available to or considered by the people planning this cleaning operation.

The organizational change at Hickson & Welch left them vulnerable to this process safety incident. There was some evidence of a loss of corporate knowledge when people changed positions. The area manager was now responsible for maintenance activities, which was a new role responsibility, and the workload was not properly balanced to allow adequate time and attention to process safety issues.

This is just one of the types of organizational changes that will be covered in this book. As you will see, various types of organizational changes have the potential to be contributing factors in process safety incidents. It is important to understand these impacts and associated risks prior to implementing any organizational change and develop an action plan to reduce these risks.

1.2 INTRODUCTION

OCM in particular has often been overlooked by many guideline publications in the past. Documents have historically disregarded the topic, mentioned it in passing, or focused on only a few of its aspects. As a result, major decisions regarding reduction in staffing levels, reorganization of the corporate hierarchy, modifications to shift schedules, or adjustment of personnel responsibilities can often be finalized by individuals or committees who lack a full understanding of how these changes may affect process safety and, by extension, the health and safety of their employees, contractors, or the surrounding community.

It has been well understood that physical changes can have an adverse impact on process safety, hence the utilization of a management-of-change process. However, it may not be as clear how changes to an organization can impact process safety. The purpose of this book is to provide an understanding of how organizational changes could potentially lead to process safety incidents, even though the contribution of the organizational change may not be as obvious as a physical change. The book will include case studies of actual incidents along with more generic examples and discussions of a range of changes that should be evaluated.

Safety-critical positions may be affected depending on the type of change involved. Responsibilities and roles may change at a number of different levels of the organization, resulting in a breakdown in the typical system of checks and balances. Essential duties can be neglected without a comprehensive approach to evaluating, approving, and documenting these changes. The lack of an OCM system, or the existence of a flawed one, has been found to be a contributing factor and/or a root cause in a number of disastrous incidents at industrial facilities in recent decades.

To establish an effective OCM process, it is essential to start with top decision-makers, whose visible enthusiasm is required if a true commitment to safety is to be accepted and upheld by their employees. When the highest echelons of the corporate structure take an active role in seeing that OCM goals are accomplished, a successful process safety management (PSM) program can be improved by adding this important component.

OCM should include veteran personnel by recording their anecdotal knowledge of their responsibilities before they retire or move on so that future employees have access to this invaluable, and often undocumented, insight. An employee of 35 years remembers the locations of floor drains, long-ago abandoned and forgotten, that could cause environmental releases if loss of containment occurs in his unit. He also knows that obscure but essential parts for the equipment installed during his first months on the job are impossible to obtain unless you contact a certain distributor and allow three months of lead time. This was why he tried to keep spares of those types of parts on hand.

The OCM process should also embrace new hires by initiating them into a corporate culture of “Safety First” on their first day of employment and by reinforcing this regularly. It should incorporate the entire workforce, whose input needs to be both respected and actively sought when reorganization of any kind occurs so that no detail is overlooked with regard to health and safety impacts.

OCM has successfully become an integrated part of the company philosophy and its overall process safety strategy when everyone within a company can navigate organizational changes smoothly without negatively affecting the safety of employees, the community, or the environment. This book should be of assistance to you on your way to achieving this goal.

1.3 THE NEED FOR MANAGEMENT OF ORGANIZATIONAL CHANGE

Organizational change is an unavoidable aspect of doing business. When an experienced employee retires, advances, or moves on to another opportunity, capturing the knowledge that employee gained through years of experience in a particular area is crucial. Downsizing often creates the need to combine functional positions. Critical responsibilities of every position should be accounted for, to maintain PSM systems when job descriptions are merged or it will not be possible to maintain full functionality of all elements of safety programs. During an unexpected snowstorm over the holidays, a temporary shifting of tasks due to vacationing personnel means there will be a need for review and documentation of procedures for employees who may be filling unfamiliar roles (as well as additional training). When a hiring freeze means a vacant position cannot be filled for weeks or months, someone should be made accountable for the critical duties of that position in the interim. As corporations acquire smaller companies they assimilate new employees and different business structures and safety cultures. Positions that appear redundant should be thoroughly evaluated throughout this process to ensure critical responsibilities are not overlooked. Any of these common events, among a myriad of other organizational changes, could result in catastrophic consequences if the changes are not successfully administered. Effective OCM procedures should include a system for managing potential modifications to all of these areas.

As with any key change, a vital step in the transition from conversations about OCM to the implementation of a practical and successful system is the initiation of senior management into the assembly of active supporters. This is typically handled by assigning someone in the management chain as a champion for this initiative who is responsible for getting buy-in throughout the organization. Health and safety specialists must sometimes walk a fine line between what is best for the safety of personnel and what is realistically accepted...