Report:
Managing risk means managing culture

Does your organisation have a true safety culture?

Our experience advising leading organisations, and our research for this and other papers, has shown us that leaders of strong safety cultures answer yes to the majority of the following questions:

Leadership / recognition

• Are your senior leaders directly accountable for safety and aligned around an agreed approach to managing risk?
• When your front-line staff suggest safety improvements, do they feel adequately listened-to and supported by their leaders? Personal mindsets / values
• Does everyone at your organisation challenge themselves continuously to improve safety and achieve excellence?
• Does your organisation have an open and honest environment in which individuals do not fear any kind of reprimand for raising safety concerns?Is everyone at your organisation aware of the consequences of their actions on people, assets and the environment?

Behaviours

• Do individual members of your staff feel able to stop unsafe activities on their own initiative, without reprimand?
• Are your staff proactive in giving feedback to others, to support continuous improvement?

Processes / plant / procedures / organisational structure

• Does your organisation have robust, documented and consistent management systems in place to ensure each of its businesses can manage its assets, people and learning safety and efficiently?
• Does everyone at your organisation adhere to the documented processes, whilst helping to revise and improve them?

Transparency and learning

• Is there clarity at every level of your organisation in terms of leading and lagging indicators of performance?
• Is there a clear and consistent approach across the organisation to the measuring, prioritisation and reporting of risks?

Resources, capabilities and rewards

• Have you allocated adequate resources to continuous improvement in safety, in terms of management, culture initiatives and learning?
• Do your key staff have the necessary capabilities and competencies to incorporate continuous improvement into their roles?

Executive summary

Major safety failures can boil down to one simple thing: complacency. You can have great commercial results, a great safety record and even great evidence that your safety provisions are adequate, yet still suffer a catastrophe. It's a counter-intuitive lesson that the chief executives of many leading companies have learnt the hard way in recent years. And it's one that, in our opinion, shows safety and operational performance are intimately entwined.

"Their belief in safety was a mirage." That's what the International Nuclear Safety Advisory Group (INSAG) said in 1991, about the managers of the Chernobyl power plant. And their turn of phrase remains salutary today. Any company in an asset-intensive industry will tell you that safety is central to its business. It will have a health, safety, security and environment (HSSE) function. It will have a risk committee. It may even keep track of "near misses" in hazardous environments.

So why do such companies appear on the news so often, in relation to people-related and environmental accidents? How do brands that pride themselves on safety suddenly find themselves suffering long-term reputational damage over what should be aberrant events? And how do CEOs know the extent to which they and their organisations are being complacent?

One problem is that companies spend too much time developing processes in an effort to improve their HSSE performance, and not enough time developing a "safety culture". That's one of the key findings of this opinion paper, which is based on interviews with senior executives from a variety of global companies in energy, chemicals, utilities and transportation.

CEOs often tell us they are making adequate provision for safety throughout their organisation, only for middle-managers to tell us a very different story. Corners are being cut. Procedures are being ignored or revised, without oversight, on the fly. Inadequate investment is being directed to critical deficiencies. The problem with human beings is that their attention dwindles, and this is especially true at work. Small oversights compound until eventually the prevailing attitude is one of "That's how we do things around here". So the challenge of safety is to make it a cultural imperative and to retain a sense of vulnerability and challenge.

Fortunately, a systematic approach to this challenge is possible. It's a bit harder to be systematic about safety than, say, business process re-engineering - safety is an intangible state, so its quality is difficult to measure and monitor; and when you're managing safety, you're doing so in order to prevent something rather than to make it happen. However, the pay-back is immense. From our research and experience, we know that building a strong safety culture invariably results in stronger overall performance.

The five prerequisite organisational qualities are: strong leadership; openness and learning; rigorous processes; aligned values and behaviours; and the required capability and resources. You'll find these detailed below, along with best-practice advice from our interviewees and details of tools to help you follow their example.

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Managing risk means managing culture report