Monday, November 8, 2010

Economics- How to Excel in a Tough Economy

As we’re all faced with the realities of a depressed economy, it’s not unusual for some to believe it’s reasonable to lower a few expectations. After all, how realistic is it to sustain a high level of safety excellence when morale is suffering from the economic uncertainties that come with layoffs, pay cuts and a seemingly unending stream of gloomy forecasts?


There are lessons here, as I’m reminded of my late father-in-law’s perspective on the Great Depression:


“If elephant overalls were selling for a dollar, I couldn't buy leggings for a canary.”The lesson: conserve cash to be able to survive and live — and engage — for another day. Companies, local governments, and individual consumers are doing this now, and it’s unlikely to change until we have reasons to believe that the economic climate is improving. Things will get better, but it will take time, even as it did in the ‘30s.


“When times are rough, if you’re gonna survive you gotta be tough.”
Individuals and organizations have to look to different approaches to be successful. Many old ways have to change in order to make it through the difficult times. The classic definition of insanity, “doing the same thing and expecting different results” applies. In many areas we have to make some tough decisions and stick with a new course that is uncomfortable, yet seems to have a better chance of success than the old ways.


If you are looking for comfortable, life ain’t the place to be.” 
Complaining doesn’t make it better. Face reality and work through it.


As an example of all the above, in 1998 I took over as managing director for a nearly bankrupt munitions manufacturing facility. The lagging indicators were terrible: the company had not been profitable in 14 years, it had been successfully sued for fraud on multiple occasions by the federal government, the previous six managing directors had been fired in less than six years, management and employee relations were miserable, and safety performance was horrid (e.g., severity rate of 142, annual explosions, etc.). As you’d expect, morale at all levels of the organization was abysmal.


The safety department had a staff of nine degreed professionals who followed the locally accepted model of writing more procedures, training the same sleep inducing regulation-based material, and conducting inspections that often ended with “power plays” like closing down operations for any kind of supposed violation. 


The facility had shelves full of procedures, in part because the onsite government inspectors made sure of it. Internal specialists and government inspectors coexisted, but the “partnership” was rarely pretty. It wasn’t unusual for the frequent condition inspections of these two groups to have widely disparate conclusions. Observation programs were ineffective throughout the 43,000-acre facility, but worst of all were the turf wars, power plays and other assorted miseries that doomed the entire safety culture. More policies, procedures, or observations did not help the safety incident rate, production performance, or morale. In our dire economic straits adding staff personnel was not an option, everyone had to be doing, or unfortunately, be laid off.


My decision was to begin a kaizen culture of continuous improvement teams in every work cell, one that would hopefully bring together both hourly and salaried workforces. It was a hard sell to the management, at-large employees, and the safety department. Every work cell began an improvement team that focused on eliminating all impediments to excellence in operations. 


Our mantra became “Complaint = Goal,” which replaced the previous unofficial “Complaint = Grievance.” In addition, we worked to promote a “no excuses” approach and pushed everyone to be engaged and actively involved in developing solutions. 


Our old culture of “They should have . . .” or “She should do. . .” was no longer acceptable (i.e., no one was allowed to “should on” anyone). The point was to focus on solving the problems at-hand by putting emphasis on the issues we could control at the moment. The high injury rate (poor safety performance) was an absolute necessity culture change initiative. Each of the self-directed improvement teams was tasked to resolve both operations difficulties and the many safety issues that existed. The safety professionals had to become accountable to actively participate with positive efforts that helped us improve in every work cell.


Getting started was difficult. There was a significant, palpable negativity by the majority of all employees to any change, especially one that involved teamwork between “warring parties.” This was reality, even though the CEO had let everyone know that there would be no 8th managing director; failure meant facility closure with a total layoff of all personnel, including the 7th managing director (me).


The safety pros were similarly uncomfortable with a change in roles, responsibilities and associated accountabilities. I explained that they were not members of ASSC (American Society of Safety Cops), but the ASSE, and we all desperately needed them to get engaged with people, not more procedures, and to start doing some of that “engineer stuff.” 


In our dire straits none of us could afford to be interested in our own personal comfort. We had to be about personal and team growth. We had to stop whining and engage in the hard work of culture change. There was to be no hesitation about shutting down an operation faced with “red” (immediate) risks. However, we agreed that a red-yellow-green danger rating system ensured that safety decisions would no longer be a “one size fits all” proposition. 


And for every safety CAR (Corrective Action Request) that was written, they were to become a part of the solution, and not just a part of the problem. Our world was now Complaint = Goal, this included the safety department team as well as the managing director. They (we all) had to become mentors and coaches of how to become a zero error culture. Injuries, incidents and “sudden deflagrations” (aka explosions) were neither to be a part of our present nor our future.


Sure, there was resistance, particularly during the “heavy lifting phase” of culture change. However, when we looked back after 12 months our new culture was delivering:
The first profit in 15 years
637 small, documented improvements (kaizens)
A severity rate that plummeted from 142 to 9
Zero sudden deflagrations


In the following year our interactive teams completed more than 700 kaizens and we had gone from “worst in safety injury performance” to placing among the top third of all the corporation’s facilities. Morale, as you can imagine, was at an all time high! As year three began, the two surviving safety pros along with the much leaner team of all employees were well on their way toward their first 1,000,000 hour LTI-free celebration in more than a decade.


In the end — and with our current difficult times in mind — I believe that you can learn more from bad times than you can from good.


So, what should safety professionals do proactively in our current time of economic troubles?


-Become interactive, interpersonal problem solvers that relentlessly assist in solving issues (safety and otherwise) that exist in the organization
-Turn complaints into goals
-Stop worrying about your own comfort and focus on growing yourself and your organization
-And, as Winston Churchill once said: “Never, never, never give up!”


The Doc

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