For years, organizational leaders in dangerous industries have searched for ways to improve organizational performance and prevent serious injuries and fatalities (SIFs). This is particularly true for oil and gas companies where the potential for burns, amputations, fractures and other serious incidents are ever-present. In fact, OSHA reports that employees in the oil and gas industry are especially at-risk for experiencing life-altering safety incidents (Soraghan, 2017). What can be done to prevent these SIFs from occurring? Also, how can leaders maintain focus on improving safe production culture with tight fiscal demands and a pandemic?
Four Key Fundamentals
Investing time, energy and resourcing to advancing these four factors will pay dividends now and in the future.
1. Learn from exemplars: Smart leaders study and learn from leadership pioneers. The late Paul O’Neill, former CEO of Alcoa, was a fierce advocate of employee safety and took big risks committing to injury prevention. He took the bold step of saying there were no budget constraints for safety at Alcoa, even if that meant lost revenue and an unhappy board of directors. O’Neill famously stated, “I was prepared to accept the consequences of spending whatever it took to become the safest company in the world,” (Lagace, 2002). He told staff that there was no budget cap for safety and that leaders would be fired if they talked about the cost of injuries to employees. He didn’t want to send the wrong message that money trumped caring about people. He was also an early proponent of what is now called a “just culture” where incidents were openly analyzed for future prevention and employees were not blamed following incidents. He did, however, fire leaders who tried to hide injuries. Putting people over profits paid off. Injuries dropped 85 percent during his tenure at Alcoa and market value rose from $3 billion to more than $27 billion. Paul O’Neill viewed safety as an investment instead of a cost…as was proven right. Strong leaders improve their own safety leadership actions by learning from others who found high levels of success.
2. Network with trusted advisors: Smart executives regularly meet with fellow leaders from a variety of different industries. It’s common knowledge that there are no “quick fixes” and effective leaders need to seek experiences from others who’ve managed similar challenges that they’re facing. This networking includes conferences, forums and executive leadership groups. These formats allow leaders to share best practices and brainstorm solutions to common obstacles leaders face. Strong leaders also get guidance from advisory firms and coaches who have years of experience helping companies navigate difficulties. These partner organizations help develop customized assessments, roadmaps and innovative programs like human performance or behavioral safety to improve safe production culture.
3. Demonstrate active caring: Innovative leaders stress caring and compassion over compliance. Incidents and injuries drop as the quality of relationships between leaders and employees improves (Hofmann & Morgeson, 1999). A new plant manager at a still mill in Ohio inherited an unhealthy culture with significant distrust between managers and employees. One of his first acts as plant manager was to set up 30-minute meetings with every employee in the facility to discuss whatever issues were on their mind (safety or otherwise). He called the meetings “30 minutes with Bob” and promoted them in person, during other meetings, via email and through other communication channels. When we arrived on-site to conduct safety training, a number of employees told us how much they liked the meetings and appreciated his effort. As importantly, numerous employees who’d not had the meeting referenced the meetings as an indication the new leader cared about his employees. This simple move sparked a change in the hearts and minds of employees and demonstrated legitimate active caring. Effective leaders embrace the philosophy of coach Lou Holtz who said, “Others don’t care what you know until they know that you care.”
4. Improve field manager and supervisor soft skills: Effective corporate leaders invest in the soft-skills of field-level managers and supervisors. These leaders interface directly with employees and set the tone for organizational culture and performance. Unfortunately, the skills needed to attain these positions aren’t always those needed to effectively lead others. Here are a few guidelines for field leaders to consider when engaging employees in the field (and virtually during the pandemic):
- Show Compassion: Show authentic caring for employees beyond just safety and business requirements. Ask about their well-being beyond physical safety and if there extenuating circumstances to be aware of. Building relationships improves culture in the short-term and pays dividends in the future.
- Psychological Safety: Foster an open environment where employees are comfortable raising issues and asking questions. Setting up one-on-one touchpoints via phone (or in person) helps establish and maintain good rapport. It also keeps you locked in with any “stucks” employees may have.
- Walk the Talk: Emphasize safety as much as production, increase leader-field engagement, get and use more employee suggestions and feedback, and focus on proactive efforts needed to attain desired results. People that are on the job, doing the job, often have the best understanding of real issues and how to solve them.
- Interactive Discussions: Ask open-ended questions to promote in-depth, collaborative discussions. This provides you with an opportunity to update employees on key issues they need to be aware of. It also provides an opportunity to recognize and appreciate their efforts and accomplishments.
- Active Listening: Demonstrate effective listening skills. This is more important now than ever. It’s also more challenging when face-to-face interactions aren’t possible. Video chats should be used as much as possible with an emphasis on employees’ feedback more than your own comments.
- Recognition: Increase the frequency and quality of recognition. Showing genuine appreciation for safety (and other) practices and participation increases the likelihood this will happen more in the future. It also boosts morale, discretionary effort and doesn’t cost a penny.
- Employee Participation: Increase employee engagement in policies, suggestions, observations and other systems. Engaged employees are five times less likely to have a safety incident and seven times less likely to have a lost time incident (Vance, 2006). According to a Gallup meta-analysis study, engaged employees had 48 percent fewer safety incidents versus disengaged employees (Harter et. al., 2009).
- Follow Up: Capture all learnings from these interactions with employees. Respond quickly and effectively to any concerns. Closing the loop with employees’ issues demonstrates that you value their opinions and are committed to making their lives better. Also, advertising successes demonstrate real leadership commitment.
Why it All Matters
Improving safe production culture builds morale and minimizes the probability of serious safety incidents. Investing in safety also provides a good return on investment.
- High injury rates disrupt business operations, undermine motivation, interfere with productivity, generate unforeseen costs and affect long-term profitability (Argilés-Bosch et al., 2014).
- Each prevented lost-time injury or illness saves $37,000, and each avoided occupational fatality saves $1,390,000 (NSC Injury Facts, 2013).
- Over 60 percent of CFOs reported that each $1 invested in injury prevention returned $2 or more (Liberty Mutual Chief Financial Officer Survey, 2005).
- Improving safety culture leads to reduced turnover and increased employee engagement (Huang et. al., 2016), improved job satisfaction (Clarke, 2010), and fewer injuries (Beus et. al., 2010).
- A review of 18 case studies showed an average increase of 66 percent in productivity, 44 percent in quality, 82 percent in safety performance, and 71 percent in cost benefits for companies that implemented effective safety initiatives (Maudgalya et. al., 2008).
Call to Action
Smart leaders regularly learn from leadership pioneers, network with trusted advisors, demonstrate active caring, and invest in the soft skills of field managers and supervisors.
Leaders who effectively apply these four fundamentals will improve safe production culture and organizational performance. This is especially important in tight fiscal times and a pandemic.
Take a few moments and assess how you’re doing with these four key factors. What are you doing well? How can you improve moving forward?
Honest self-assessment will enable positive actions in the future. Improving these four factors will make you a better leader and help improve your safe production culture and overall organizational performance.
Headline photo courtesy of Propulo Consulting
Oil and gas companies are regularly faced with many industry-specific issues to overcome. Such issues, including exploration and drilling, are often complex and intricate processes with many unique challenges to overcome. Data analytics can play a massive part in streamlining some of the most fundamental operations that are involved in the oil and gas industry.