Your Company Can’t Do Risk-Management

What our research has shown is that most companies cannot do risk-management, whether by their own design or using our solution-set. In fact, most companies cannot ever achieve the risk-management paradigm shift. This proclamation would be depressing but for the explanation of why this is the case, which exposes the actual problem isn’t the risk-management solution-set, but choices being made. So, here are the top ten reasons your company can’t do risk-management, presented as statements. If management says even one of these, they are never going to successfully transition to real management, and will remain in chaos mode forever.

1. Our workers don’t know safety.
2. Our workers are safe only when we’re watching them.
3. Our safety program is world-class.
4. Our safety personnel are experts.
5. Our accident rates are below the industry average.
6. We believe anything more than zero-incident rates is unacceptable.
7. We are constantly doing more safety activities.
8. We are always training.
9. We are receiving safety awards for our excellent workplace safety.
10. We are a safe company.

While harsh to say, the instant any one of those statements is made with anything other than a sarcastic edge, management is choosing to maintain status quo. Real effort is not likely to be expended, or maintained, to make any changes, because things are “good enough.”

The problems with those statements helps expose why they are dangerous:

1. If a manager says workers don’t know safety, then what they are saying is the people who provide all operational productivity do not care about their own wellbeing. Saying that is masking the real statement, which is usually that “workers are doing things that negatively impact our productivity.” This attitude that workers are ignorant is not only false, but makes the entire provision of safety a farcical effort: without engagement there is no uptake. Workers need to be viewed as resources, assessed on a per worker basis over time, and brought collectively to a standard of safe operations that imparts higher overall productivity by way of risk-aversion and effective control compliance. Not believing workers can provide value to the safety effort, undermines their contribution.
2. If a manager says workers are safe only when we’re watching them, then what they are actually saying is our workers are poorly trained, poorly deployed, and poorly managed. Well-trained workers doing jobs for which they are qualified are not inherently safer when watched. Yes, people become complacent, but that is about communication, not monitoring. Monitoring is the data driver that makes for good feedback and communication, not an answer to worker complacency. Believing that watching is managing is a display of ignorance about how people function, and says a great deal about management but nothing about the frontline workers.
3. If a manager says the safety program is world-class, what they mean is that it is good enough for their needs. The reality is even risk-management doesn’t allow resting on laurels. Processes that impart safety are never wisely measured as world-class, because the sad fact is the world isn’t a safe place. The manager who says, “good, yes; great, never” is always going to be world-class by default, because they are always forcing change management into operations, seeking efficiencies, and maximising the risk-aversion of their workers. Just like safety is an outcome of process, so too is world-class a default outcome of pursuit of better process.
4. If a manager says safety personnel are experts, what they may as well be saying is, “I don’t want to know; tell the person I hired.” There is no such an animal as a safety expert, because individual people are incapable of a broad enough view to be mechanically objective. We see what our experience allows. This doesn’t degrade the value of safety expertise, but what it does is qualify that the safety expert is not valuable beyond the scope of their knowledge and experience. Far better to have a safety professional who actually manages the processes that underlie and produce safe conditions. The expertise there is the same expertise that a good human resources manager has, because so many processes that affect safety are about human relationships to processes.
5. If a manager says accident rates are below the industry average, they have basically shrugged. It is fairly easy to be above average in most aspects of life, given that mediocre is the modern standard for performance for most purposes. Does that satisfy anyone? Does it engender growth, revenue generation, or profitability? Does being better than the other losers really imply a pursuit of excellence? Sadly, it seems to for many; but it is observable that the companies that really excel never express such attitudes. They are far more likely to proclaim they are not yet good enough.
6. If a manager says we don’t accept anything more than zero-incident rates, they are being wilfully ignorant. Business requires operations of some sort, and operational activities require risks undertaken. To believe, even for an instant, that it is possible to exist in a zero-incident state forever is foolish. But focusing on the zero in that declaration, will often create conditions where suppression of incidents is commonplace, increasing risk until inevitably the exposure exceeds chances of avoidance, after which the massive impact of the accident will eradicate the entire organisation. For an example, look no farther than Bear-Stearns, a company that assumed enormous risks and consistently expressed how risk-aware and averse they were, bilking investors out of billions. Lip service does not create risk-aversion, it enhances risk.
7. If a manager says we are constantly doing more safety activities, they are really saying, “I get lovely reports with many numbers that mean nothing, but damn they look important.” Corner such a manager and ask them a question like, “How does doubling the number of safety meetings impart more safe outcomes?” Their answer, if they are conscientious will rightly observe that better communication can actually do that. Now, say to them, “Prove it has.” Suddenly, those obscure counts, unrelated to anything – or, worse, in reality often showing no impact on accident rates – mean very little. Smart managers see through the numbers to the realities, and question efficacy because they realise scarce resources are being applied to activities that may have no value returns associated.
8. If a manager says we are always training, a commendable idea, ask them, “Why?” better than 90% of managers we have asked that question achieve glassy stare status in seconds, and the best ones always admit they haven’t a clue. They seldom even know, at the executive level, what people are being trained to do. When they find out, they often sit in stunned silence and can observe that traditional safety, being how often it takes the easy path, frequently applies pointless easy training without ever checking value at all, and lags far behind on more complex critical training needs. Training is an ongoing process, but has to also be explicable. It better matter, since it is one of the highest cost aspects of control imposition faced by any company.
9. If a manager says we are receiving safety awards for our excellent workplace safety, unless they are smirking, they really need to educate themselves to what it takes to get a safety award. If you are in an industry that kills a handful of people every few months, you might end up at the top of that heap and awarded for only killing Bill in shipping. There isn’t anything enviable in being the best or the worst, or a certificate that is awarded based upon statistical tricks that have no connection to any reality. Try getting an award if you report every actual recordable in an industrial setting. Your statistics will betray you make you look awful, and you can easily be beat by a company that has killed a handful of people and not bothered to diligently report their recordable events. The fact the near misses you recorded meant you killed no one matter not whit to the statistical formula.
10. If a manager says we are a safe company, what they mean is “We haven’t killed anyone recently, or injured anyone recently.” Safe is a purely subjective term. A quality management team at the executive level will always balk at making such a statement, because an easier and more truthful one sounds so much better: “We try to be a safe company, and it takes a lot of effort to maintain that.”

What it takes to do risk-management, producing real safety from the process, is recognising that attitude is almost everything. You have to want to become safer, stay safer, and reduce your costs to do that. You need to commit to the long-term value of being able to measure your progress, focusing your resource applications to produce improvements, and understand that at the end of the day you never end the effort. Risk-management becomes a profit-driver because it is a productivity-enhancer, which just has the odd side-effect of producing safer workplaces.