How to Use Safety For Profit

How to Use Safety For Profit

 

Lynne: So another large company that we can get some lessons from is Alcoa. Now there’s a great video out there that’s called Safety First At Alcoa. It’s about a four minute video where Bill O’Rourke who was a and V. P. over there, talks about how Paul O’Neill, who was the CEO for a number of years, made safety (at that time Alcoa had twenty eight locations and they were having about a workers comp claim a week at at every location) the priority.

David: Amazing.

Lynne: Right and so he walked in he said, “We are going to elevate safety to the same level as our financials, as customer service… it’s going to be top priority.” And he used that not just to stop workers comp claims but to act actually turn around profitability at the entire company.

David: I’ve also seen that video what’s fascinating about it is that you would expect him to start with what was at the time a struggling company and say, “We’re gonna increase profitability.” But he doesn’t. What he starts with, and emphasizes, is “ Employee safety as our number one priority and as a by-product of that, we are going to improve our company and we’re gonna improve our profitability.” That’s value! If I’m an employee, I understand that my value, as an individual, is the highest value for the company. That’s a place I want to work.

Lynne: Absolutely and it’s very doable actually for any size company if we can just shift how we see safety.

David: Absolutely, you don’t need very sophisticated tools, you don’t need expensive tools, you don’t even need a lot of time. What you do need is the right cultural foundation and some really fairly basic practical tactical solutions.

Lynne: Here’s  Paul O’Neill Alcoa trying to reduce worker’s comp costs,  but actually what he does is he empowers his entire company and he multiplies the profit of the company because the very things he’s doing to help employees to feel valued, to do work in a safer way, to help them to be more skilled, are the exact things that are going to grow and profit the company…and in the middle of it the company is not providing shoddy bathrooms or are giving people horrible work conditions or bad tools.

David: These most successful companies don’t increase their profitability by trying to skimp on their employees. They in fact do the exact opposite.  They reinforce how they value their employees. Disney does that every day, of course, extremely well. By reinforcing the value, by providing the employees with more, by making sure the employees know how valuable they are to the company, they increase their profitability. Seems counterintuitive but it’s not.

Lynne: Exactly. Exactly.