The Power of Safety Leadership: Paul O’Neill, Safety and Alcoa
In his book The Power of Habit: Why We Do What We Do, and How to Change, Charles Duhigg, described the reaction to Paul O’Neill’s first presentation as the new CEO of the Aluminum Company of America (Alcoa) in 1987:
A few minutes before noon, the new chief executive, Paul O’Neill, took the stage. He looked dignified, solid, confident. Like a chief executive. Then he opened his mouth.
After his presentation:
The investors in the room almost stampeded out the doors when the presentation ended. One jogged to the lobby, found a pay phone, and called his 20 largest clients.
“I said, ‘The board put a crazy hippie in charge and he’s going to kill the company,’” that investor told me. “I ordered them to sell their stock immediately, before everyone else in the room started calling their clients and telling them the same thing.
However, that investor admitted that in the long run he recognised that:
“It was literally the worst piece of advice I gave in my entire career.”
Why the stampede? What did O’Neill say?:
“I want to talk to you about worker safety,” he said. “Every year, numerous Alcoa workers are injured so badly that they miss a day of work.
“I intend to make Alcoa the safest company in America. I intend to go for zero injuries.”
The audience was confused…O’Neill hadn’t said anything about profits. He didn’t mention any business buzzwords.
Eventually, someone raised a hand and asked about inventories in the aerospace division. Another asked about the company’s capital ratios.
“I’m not certain you heard me,” O’Neill said. “If you want to understand how Alcoa is doing, you need to look at our workplace safety figures.” Profits, he said, didn’t matter as much as safety.
Safety Leadership, Safety Vision
O’Neill had a clear vision and wanted to focus on safety to develop continuous improvement across the company:
“I knew I had to transform Alcoa,” O’Neill told me. “But you can’t order people to change.”
“That’s not how the brain works. So I decided I was going to start by focusing on one thing. If I could start disrupting the habits around one thing, it would spread throughout the entire company.”
O’Neill stated that when hazards are identified he wanted them fixed, he didn’t want safety to be ‘budgeted’.
Safety Leadership Challenged
Six months into his tenure a new employee died:
…a piece of machinery had stopped operating and one of the workers — a young man who had joined the company a few weeks earlier… — had tried a repair. He had jumped over a yellow safety wall surrounding the press and walked across the pit. There was a piece of aluminum jammed into the hinge on a swinging six-foot arm. The young man pulled on the aluminum scrap, removing it. The machine was fixed. Behind him, the arm restarted its arc, swinging toward his head. When it hit, the arm crushed his skull. He was killed instantly.
Fourteen hours later, O’Neill ordered all the plant’s executives into an emergency meeting. For much of the day, they painstakingly re-created the accident with diagrams and by watching videotapes again and again. They identified dozens of errors that had contributed to the death, including two managers who had seen the man jump over the barrier but failed to stop him, a training program that hadn’t emphasized to the man that he wouldn’t be blamed for a breakdown, lack of instructions that he should find a manager before attempting a repair, and the absence of sensors to automatically shut down the machine when someone stepped into the pit.
“We killed this man,” a grim-faced O’Neill told the group. “It’s my failure of leadership. I caused his death. And it’s the failure of all of you in the chain of command.”
The executives in the room were taken aback. Sure, a tragic accident had occurred, but tragic accidents were part of life at Alcoa.
Within a week of that meeting, however, all the safety railings at Alcoa’s plants were repainted bright yellow, and new policies were written up. Employees were told not to be afraid to suggest proactive maintenance. And O’Neill sent a note to every worker telling them call him at home if managers didn’t follow up on their safety suggestions.
The Essence of Safety Leadership
And what happened? That focus on seeking suggestions and acting on them helped give permission not only for safety improvements but a whole range of continuous improvements (observation, identification, analysis and action) across all aspects of their operations:
“Workers started calling, but they didn’t want to talk about accidents,” O’Neill told me. “They wanted to talk about all these other great ideas.”
Within a year of O’Neill’s speech, Alcoa’s profits would hit a record high. By the time O’Neill retired in 2000 to become Treasury Secretary, the company’s annual net income was five times larger than before he arrived, and its market capitalization had risen by $27 billion. Someone who invested a million dollars in Alcoa on the day O’Neill was hired would have earned another million dollars in dividends while he headed the company, and the value of their stock would be five times bigger when he left.
What’s more, all that growth occurred while Alcoa became one of the safest companies in the world.
However, fundamentally O’Neill argued that investors should treat safety as a key indicator of the effectiveness of a management team and that:
Organisations with potential for greatness have the characteristic of being places were people don’t get hurt.
This presentation covers the points that Duhigg discusses:
Safety Leadership - the Key to Safety Culture
The term ‘leadership’ is sometimes misused. Sometimes as a trendy alternative for ‘senior management’ and occasionally in the Orwellian term ‘thought leadership’ (which was recently labelled “grossly indulgent” in the Forbes list of ‘most annoying business slang’).
Leadership is not the same as managing resources and schedules. Here we use leadership to represent an activity that involves:
- Being visible,
- Focusing on people,
- Building trust and ultimately…
- Influencing other people’s behaviour
It is this deliberate, concerted and continual activity that can influence culture, though as we have showed previously, that can be unravelled far more rapidly by poor leadership.
Excellent safety leaders realise that safety leadership is not an alternative to safety management but an essential complement. They also have a vision for safety in their organisation. It perhaps goes without saying that safety leaders therefore have a passion for safety.
Further Reading on Safety Leadership
You may also be interested in these Aerossurance articles:
- How To Develop Your Organisation’s Safety Culture positive advice on the value of safety leadership and an aviation example of safety leadership development.
- How To Destroy Your Organisation’s Safety Culture a cautionary tale of how poor leadership and communications can undermine safety.
The International Association of Oil and Gas Producers (IOGP) has also published the report: Shaping safety culture through safety leadership. The UK Maritime and Coastguard Agency (MCA) has published: Leading for Safety
In June 2013, The Hon. Mr Justice Haddon-Cave addressed delegates at Piper 25 (a conference to mark the 25th anniversary of Piper Alpha offshore disaster in the North Sea, in which 167 workers died). His paper was entitled “Leadership and Culture, Principles and Professionalism, Simplicity and Safety – Lessons from the Nimrod Review”, a report issued in October 2009, following the loss of Royal Air Force (RAF) Nimrod XV230:
Also see this piece on lessons from the formation of the UK Military Aviation Authority (MAA): Regulatory Reflections & Resisting the Seduction of the Risk Management Process
We can gain insights into a new model of leadership from the late Nelson Mandela…Mandela frequently emphasized the shared nature of leadership and was known for giving credit to others. For example, when honored for his role in ending apartheid, he would note that abolishing apartheid was a collective endeavor. Perhaps one of the most important leadership lessons we might distill from Mandela was not his acquisition of leadership but the way he shared it.
Mandela’s approach suggests a new way of thinking about leadership — not as a set of traits possessed by particularly gifted individuals, but as a set of practices among those engaged together in realizing their choices. This kind of leadership involves activities such as scanning the environment, mobilizing resources and inviting participation, weaving interactions across existing and new networks and offering feedback and facilitating reflection.
UPDATE 6 November 2015: Ed Shein gave a presentation: So You Want to Create a Culture? which emphasised understanding the change you want to achieve.
UPDATE 11 January 2016: You may like this Forbes article Do You Know What’s Really Driving Your Organizational Culture? This make 4 key points:
- Culture is a collective concept.
- You may need some outside perspective to get an unbiased view.
- Don’t jump to conclusions. What you see isn’t always what you get and may result addressing symptoms rather what is creating them.
- Understand the why behind the what.
UPDATE 26 April 2016: We look at the origins of the safety culture concept: Chernobyl: 30 Years On – Lessons in Safety Culture. We also look at the International Atomic Energy Agency (IAEA) framework for ‘strong’ safety culture consisting of five characteristics: Each of these five characteristics have a series of subsidiary attributes.
UPDATE 5 May 2016: The UK Confidential Incident Reporting and Analysis System (CIRAS) has released the presentations from their ‘Safety Culture Under Strain’ conferences held in London and Edinburgh in April 2016. Aerossurance attended the excellent Edinburgh event.
UPDATE 1 August 2016: We also recommend this article: Leicester’s lesson in leadership, published in The Psychologist.
UPDATE: 28 August 2016: We look at an EU research project that recently investigated the concepts of organisational safety intelligence (the safety information available) and executive safety wisdom (in using that to make safety decisions) by interviewing 16 senior industry executives: Safety Intelligence & Safety Wisdom. They defined these as:
Safety Intelligence the various sources of quantitative information an organisation may use to identify and assess various threats.
Safety Wisdom the judgement and decision-making of those in senior positions who must decide what to do to remain safe, and how they also use quantitative and qualitative information to support those decisions.
UPDATE 14 September 2016: An article on leadership learning and development in the Harvard Business Review that describes what they call the ‘Great Training Robbery’, commented that:
…we’ve learned that education and training gain the most traction within highly visible organizational change and development efforts championed by senior leaders. That’s because such efforts motivate people to learn and change; create the conditions for them to apply what they’ve studied; foster immediate improvements in individual and organizational effectiveness; and put in place systems that help sustain the learning.
In another article, How to Combat the Leadership Crisis, it is noted that:
…leadership development programs need to fit the culture, style and goals for both the organization and the leaders receiving the training. Too often, they simply don’t. Customization is minimal — putting the company name on the program or perhaps adding an industry-specific case study.
To truly fit the organization, leadership development programs must be linked to three organizational facets: initiatives, key goals and strategy and culture.
UPDATE 19 September 2016: It’s worth listening to Todd Conklin’s podcast interview with Prof Ed Schein.
UPDATE 22 September 2016: NTSB Board Member Robert L. Sumwalt presented Lessons from the Ashes:
The Critical Role of Safety Leadership to an audience in Houston, TX. Its worth noting the emphasis made of safety as a ‘value’ and of alignment across an organisation.
UPDATE 26 September 2016: John Bersin writes: Data Proves that Culture, Values, and Career are Biggest Drivers of Employment Brand. When it comes to recommending your organisation to others:
An employee’s rating of “culture and values” is 4.9 times more predictive of a company recommendation than salary and benefits. The second most important factor is “career opportunities,” which is 4.5 more important than salary and benefits. The third factor is “confidence in senior leadership,” which is approximately 4 times more predictive than salary and benefits.
UPDATE 30 September 2016: Talking leadership: Julia Fernando on understanding culture to enable compassionate care in the NHS.
The difficulty is that once a culture is set and norms are established, it can be hard to change the status quo. Changing a culture of fear and blame can therefore be difficult. Leadership plays a vital role in driving forward such changes…
UPDATE 31 October 2016: In an article, How to establish a culture of growth and development it is noted that:
When it comes to staff development, direct managers have the largest role to play in providing employees with an opportunity to apply and grow their skills and abilities. Yet, 64 per cent of L&D leaders identified the fact that ‘managers don’t encourage, enable or follow up’ as an obstacle for learning.
Managers must facilitate employee development by enabling employees to put into practice what they learn through stretch assignments, team collaboration, and offering regular coaching and feedback on their performance.
UPDATE 24 December 2016: Getting beyond the BS of leadership literature:
The focus on leadership should be about useful behavior rather than overly simplistic, and therefore fundamentally inaccurate, categorizations of people and personalities.
UPDATE 5 January 2017: Poor communication sends oil worker morale plummeting, chaplain says. Oil and Gas Chaplin Rev Gordon Craig commented on the “tremendous human impact” of large-scale job losses amongst workers in the oil and gas industry:
People are very resilient. But one of the hardest things to deal with is uncertainty, not knowing what is going to happen to them and their families. This causes stress and they all feel that stress.
I have seen excellent examples of companies engaging with their people and doing everything to give them as much information as they possibly can. Their people feel valued and it helps build trust.
But I have seen examples where that doesn’t happen. Employees then tend to feel they are just numbers on the sheet and not a person.
In an interview with Energy Voice Craig said managers were not heartless and every company he encountered did care about their staff.
What’s actually happening is that their communication is not done effectively. Of course, a lot of HR departments have been cut back as well. Sometimes people offshore don’t see these issues.
UPDATE 26 January 2017: In a discussion on another case of safety leadership (and collaboration with a union leader to improve safety) see: ‘Deepwater Horizon’ film reminds former Alabama Power CEO of lessons learned in tragedy The CEO and union leader…
…made a commitment to one another: we might disagree about many other things in the future, but we would never again disagree about safety. This was the first step in a long process towards mutual trust and respect.
It took several years, but step by step we built a process and changed our “us versus them” culture.
UPDATE 30 January 2017: In Getting the Leadership Basics Right its us said their are five fundamental principles of leadership:
- Hire people who can find meaning through your business.
- Provide clear, compelling goals.
- Give people a path for growth and impact.
- Foster a positive, supportive culture.
- Lead with a higher purpose.
UPDATE 16 February 2017: See also our article Consultants & Culture: The Good, the Bad and the Ugly
Aerossurance is pleased to again sponsor (and present at) the Chartered Institute of Ergonomics & Human Factors’ (CIEHF) Human Factors in Aviation Safety Conference 7-8 November 2016. We also presented at the Flight Safety Foundation’s (FSF) 69th Annual International Air Safety Summit in Dubai on 15 November 2016. In both we discussed ‘The Great Training Robbery’, the inappropriate use of training and the value of 70:20:10.
Later Tuesday morning, [Nick] Dahlstrom [Human Factors Manager at Emirates] spoke on Safety Culture in Maintenance during the IASS Maintenance & Engineering (M&E) track session and said that safety is about more than just data and that people create safety. “It’s not your SMS (safety management system) manual that makes you safe, it’s your people,” he said. He also cautioned that aviation as an industry is too focused on training and not focused enough on education. That sentiment was echoed by Andy Evans, director, Aerossurance, who said, “I’m not against training, but I’m more for learning.”