Zero Accident Culture
ROI = ROI
How to make your return on investment (ROI) equal your reach of influence (ROI).
John Wayhart
As you may recall, in the June 2012 issue of Waste Advantage Magazine, I spoke about mid-term reviews of your safety program and mentioned the simple phrase ROI = ROI. You may have scratched your head wondering where that equation came from and what it even means. For years, one of the areas of greatest concern for employers in regards to safety is that it’s been difficult to articulate what exactly is a reasonable return on investment when it comes to an organization’s safety program.
In fact, when economic times are tough one of the first layoffs that companies make are to the safety personnel. That decision usually accompanies reduced budgeting for safety programs, initiatives and safeguards. Sadly, some waste and recycling owners feel that as long as the company is in OSHA, DOT and MSHA compliance, there is no need for a robust safety program that promotes a Zero Accident Culture.
Changing the Acronym for ROI
Another area of concern for waste and recycling companies is the major highs and lows or lack of energy that is necessary to advance and continuously improve upon safety performance. When there is a lull in incidents, which should be a positive, workers tend to become more relaxed and not as invested in continually promoting and improving upon safety training, measures and exposures. In turn, managers tend to feel less compelled to continually remind and train even seasoned employees on proper safety precautions.
What I have found in companies that feature safety excellence as a core competency of their business is that everyone has been assigned (whether self-assigned or through a manager) a degree of responsibility in the area of safety, risk management, exposure reduction and professionally confronting safety concerns immediately. These companies have what I call a very high ROI or “reach of influence”. Reach of influence describes in many ways the culture of your company and its organizational strength. It is what your management team and employees do when left to their own devices. Furthermore, it defines the work ethic and operational results you would expect in a well-run organization. So how do you get started on building ROI = ROI within your waste company?
The Right Equation
Does 100 percent of your company believe they have the support and guidance when it comes to
workplace safety? The best place to start is by examining your current state for safety performance. No matter the size of your workforce, the goal is to reach 100 percent of all employees in terms of safety expectations on a daily basis. Achieving this goal can be difficult as it requires the discipline from the top down, to perform a job the correct and expected way with favorable outcomes. However, reaching this goal provides clarity, efficiency and continuous improvements in your operations. Safety should be addressed as an integral part of workplace excellence, revenue growth and customer brand. In other words, safety isn’t separate from business; it’s a significant part of its success.
Figuring Your ROI
The ROI = ROI observation is easy to calculate when using Chart 1. Based on the description for each influencer, rate how effectively that individual is being used and/or promoting Zero Accident Culture for safety. The higher your overall reach of influence is the greater your return on investment (i.e. insurance premium and workers’ compensation reductions, lower cost of risk, greater operational efficiency and reduced business interruption) will be.
Owner/President
Ownership and/or Senior Executive fully support and have signed off on a corporate safety mission statement. This is used as a backdrop in production, operational and safety meetings, as well as in the hiring process and new employee orientation. The owner is keenly aware of workplace safety initiatives and makes it a part of their daily interaction to reinforce positive, safe practices, such as glasses, seat belts, reflective clothing, steel-toed shoes, etc.
Chief Financial Officer
The CFO fully discloses the Experience Modification Rating and operational costs of workplace injury, as well as communicates the progress being made in terms of reducing the frequency and severity of incidents. The CFO discusses with the executive team and/or owner the available budget for workplace excellence incentives and celebrations.
Vice President of Operations
This person is the field executive responsible for carrying forth the safety and workplace excellence message daily to all of the operations. He or she sets the tone by ensuring employees follow through on compliance of workplace hazards, therefore, avoiding or eliminating loss exposure.
Human Resources
HR acts as the administrative executive by hiring safety conscious individuals and preparing them for the job. Selection, training and evaluation come through this company function.
Foreman/Supervisor
This person or group is the daily reinforcement for safe practices and emphasizing each employee’s responsibility to themselves, their family and the organization. They are thoroughly involved with their workers’ individual performance and attention to safety.
OSHA/DOT/Fire/Police/Insurance Representative
What is the degree to which your company uses tax payer services or insurance representatives that are part of your overall insurance premiums? Tremendous value and return on investment is embedded in everyone’s business by these outside resources.
Come on! Although the song is notorious with weddings, the motto is still applicable to the workplace. The influencers, while constantly reminding employees about a safe culture, should also celebrate success and recognize safety roles models among employees. Positive reinforcement builds the idea of role models for employee behavior. Senior level employees need to bring energy to their jobs and the people they “touch.” When recognition becomes absent, your organization can fall into a lull of complacency that merits more frequent incidents.
The Big Picture
ROI = ROI is a significant picture of an organization and how prepared, ready and experienced they are as it relates to workplace excellence. Strategically examining the influencers in your company can be rewarding for both your employees and organization in terms of return on investment.
John Wayhart is a Senior Vice President at Assurance (Schaumburg, IL). With more than 29 years in the insurance and risk management industry, his expertise lies in providing solutions for a wide range of businesses including the waste and recycling industry. In the 1989, John trademarked the Zero Accident Culture® and continues to teach, coach and mentor this process to help drive down the cost of risk to improve operational effectiveness and financial results. This successful approach to insurance and risk advocacy is indeed a market differentiator. John can be reached at (847) 463-7161 or [email protected].