Zero Injury Culture: More Than a Mantra2013 ASSE Heart of America Regional PDC Keynote

Calvin (Cal) BeyerApril 19, 2013

Hindsight is a wonderful thing but

foresight is better, especially when it

comes to saving life, or some pain!

-- William Blake

Productivity

Quality

Risk

Safety

Integrated Risk Management Model: PQRS Levers for Profitability

Injury Prevention

Claim Management

Cost Containment• PPO enrollment • Utilization

review• Modified duty

Return to Work

Integrating Safety &Claim Management

Business Case & Sustainable Advantage

Workers Compensation: A Call to Action

Safety Culture Building Blocks & Zero Injury Culture Lifecycle Development

Risk Performance Metrics

Discussion Topics

Foundational Questions

• Is Workers’ Compensation a source of competitive advantage for your company?

• How does your company measure safety performance?

• Does your company consider safety as the absence of injuries or the reduction of risk?

• How do you know if safety is ingrained in the hearts and minds of your employees and embedded in the culture of your company?

A (Wake-Up) Call to Action

• Downward trend in WC payroll due to recession is reversing• Hiring uptick and increased frequency of new hire injuries• Musculoskeletal disorders comprise ~ 1/3 of occupational injuries• Aging workforce claims increasing• Workers Compensation is distressed and carriers increasing rates • NCCI WC experience modification formula change• Medical cost inflation and other indirect cost multipliers increasing• NCIB reports of escalating WC claimant fraud (37% increase in

2012)

Crisis = Challenges or Opportunities?

$ 10000$ 10000Largest Premium 1

$ 30000$ 30000Loss Leader2

$ 50000$ 50000Frequency of Severity3

Workers’ Compensation: Lead Line of Insurance

Up to 45-50% of insurance buy

Sprains/strains can be >50% of claim costs with highest development costs

Most frequency & severity of claims

Workers’ Compensation: Competitive (Dis-)Advantage?

Game on! There are Winners and Losers in Workers’ Compensation

1.18 M cases with lost workdays

Rate = 117/10k full-time workers

~ 3 M occupational injuries & illnesses

Rate = 3.5/100 full-time workers

4,609 in 2011

Rate = 3.5/100k full-time workersFatalities

Injuries/Illnesses

Lost Work Days

2011 Occupational Injury Statistics

Source: www.bls.gov/news.release/cfoi.nr0.htm

17

14

13

10

Transportation & Transportation & Warehousing Warehousing

ConstructionConstruction

UtilitiesUtilities

ManufacturingManufacturing

Median # of Lost Work Days By Industry(Overall median = 8)

Source: http://www.bls.gov/news.release/osh2.t01.htm

28

27

25

10

Carpal Tunnel (tendonitis = 14)Carpal Tunnel (tendonitis = 14)

FracturesFractures

AmputationsAmputations

Sprains/Strains/TearsSprains/Strains/Tears

Median # of Lost Work Days By Injury(Overall median = 8)

Source: http://www.bls.gov/news.release/osh2.t05.htm

Falls

Caught Between

Electrocution

Struck By

OSHA’s Big 4 Construction Hazards

Focus attention on Hazard Recognition & Employee Orientation/Training

Manufacturing Workers’ Compensation Claims

Top 5 claims types= 84% of frequency and 88% of severity (major insurance carrier report)

1. Sprains/strains (35% of claims; 45% of costs)2. Caught between3. Struck by/against4. Lacerations5. Foreign object in eye

Institute Behavioral Safety Observations

Stop Relying Solely on Traditional Measures

Examples of traditional measures• Incident rates• Severity rates (DART)• WC Experience Modification Ratings• Average claim costs• OSHA inspections, citations and fines

Limitations of Traditional Measures

Breakthrough Solutions Require New Approach & Measures

• “More of the same” does not yield a different result

• Typically yield incremental improvements

• Do not drive or reinforce cultural development

The Risk of Driving Forward While

Looking in the Rear-view Mirror

Copyright © 2012 Rockwell Automation, Inc. Used with permission.

18

Hierarchy of Measurement

Information with or without

context

Data

Statistics highlighting

past performance

Measures

Perspectives of past and

current results to forecast

future performance

Metrics/KPIs

Insights driving

business decisions and performance

Analytics

Key Challenge for Safety Profession: Leverage Analytics into Insights

Copyright © 2012 Rockwell Automation, Inc. Used with permission.

Lagging vs. Leading Indicators

Lagging Indicators“Downstream” measures or trailing indicatorsFeedback on data collected and analyzed “after-the-fact”

Passive metrics of prior results

Don’t provide insight into the prevention-based activities that influenced these results

Leading Indicators

“Upstream” measures

Prospective and “before-the-fact”Designed to influence real-time outcomes & current activitiesFocused on behaviors and outcomes

Provide almost immediate feedback on present activities

Copyright © 2012 Rockwell Automation, Inc. Used with permission.

Risk Performance Metrics Safety Example

Lagging (past results)

Current(present

snapshot)

Leading (prevention activities)

• Workers’ Comp Experience Modification Rating

• OSHA recordable incident rate (TRIR) or Days Away from Work Restricted or Transferred (DART)

• Total lost workdays• Average cost per

claim

• % participation in pre-shift “stretch-n-flex”

• Daily record of inspections

• End-of-shift record of injuries or incidents

• Daily job safety observations

• % of machinery in compliance with standards

• # of pre-placement assessments completed

• # of safety orientations conducted

• % of safety inspections completed

• # of safety briefings held

Copyright © 2012 Rockwell Automation, Inc. Used with permission.

What is Culture?

• Complex system of shared beliefs, values and behaviors

• Set of prevailing and enduring characteristics:– Woven into the organizational fabric– Organizational DNA that is transmitted to new employees

Every company and work group has a prevailing culture and may have one or more subcultures

Culture = Workplace Norms

• Defines the norms of the “workplace”• Norms = accepted precursors and performance– Spirit and attitude– Rules of conduct– Motivating factors – Determinants of success vs. failure

Requires conscious and deliberate effort to change culture

Overview of Corporate Safety Culture

• Elements of safety culture

Copyright © 2012 Rockwell Automation, Inc. Used with permission.

Beliefs Values

Assumptions Norms

Attitudes

Safety Performance Gap

The difference between what is expected

vs. what is accepted by the company’s

leadership, supervisors & employees

Accountability

Responsibility

Reinforcement

Recognition & Rewards

Buy-In

Awareness

Education

Compliance

Enforcement

Commitment

Investment

Continual Learning

Process Improvement

Safety Culture: The ABC’s

Expanding the Vision and Reach

Incident & Injury-Free® CEO Forum

Incepted 2010-11

Partnering with insurance industry

Incident & Injury-Free (IIF®)

JMJ Associates

Circa 2003

Celebrating 25th year in 2013

Making Zero Injuries a Reality

Construction Industry Institute

2003

9 high impact techniques

Zero Injury Techniques

Construction Industry Institute

1993

Listed 170 techniquesZero Zero

Injury Injury CultureCulture

History of Zero Injury Culture

Notes: 1. Construction Industry Institute (CII) at the University of Texas (Austin) 2. JMJ Associates (JMJ.com) serves mining, energy and construction industries is celebrating 25th anniversary in 2013 3. As of March 2013 there are 17 construction companies participating in IIF® CEO Forum.

9 High Impact Zero Injury Techniques

1. Demonstrated management commitment

2. Staffing for safety3. Planning (pre-project

& pre-task)4. Safety education

(Orientation & specialized training)

5. Worker involvement6. Evaluation and

recognition/reward7. Subcontractor

management8. Accident/incident

investigations9. Drug/alcohol testing

Focus on Injury Prevention

• Establish top-down management accountability culture• Employ hiring standards and practices• Institute new employee orientation • Embrace engineering controls and factory automation• Foster proactive safety supervision• Institute behavior-based safety process

– Recognize safe work practices– Correct “at-risk” attitudes and behaviors

Expect and Only Accept Safe Work Attitudes, Behaviors & Conditions

OSHA

Recordkeeping

Behavioral Safety

Loss Analyses

Safety Committee

Injury Prevention Enablers

Management

Accountability

System

Critical Incident

Response

Workplace Stretching Program

Wellness Program

Injury Prevention Force Multipliers

Challenging Status Quo

Overcoming Resistance to Change

Renewing Focus

Convincing Stakeholders

Raising Up Leaders (“Torch Bearers”)

Zero Injury Safety Culture Life Cycle Process

Zero Injury Safety Culture Development Life Cycle

Source: Building Profits (Jan/Feb 2013; Construction Financial Management Association. Used with permission.

Life Cycle Elements

Assess Current Situation1

Safety Culture Health Check2

Present Business Case3

Execute Plan & Monitor Results4

Summary Action Steps

Instituting Zero Injury Culture

Obstacles to Overcome

• Creative, innovative problem solving abilities fosters shortcuts• Rationalization of inherent hazards• Changing field jobsite conditions• Resistance to change (status quo)• Production/schedule pressures• Traditional work methods: “Old guard” mentality • Organizational silos• Industry norms

Employ change management techniques to institute cultural change

Change Management Cycle

Attitudes

Time

Unaware

AwareConcerned

Involved

Ownership

ChangeChange

Reducing Cycle Time of Change

• Seek assistance and resources from insurance partners• Identify desired end-state (vision & expectations)• Benchmark “best of class” companies• Solicit supervisory & employee participation in setting and

measuring performance objectives• Conduct baseline safety culture assessment• Consider outside facilitator/consultant to help as change

agent and process master

• Celebrate successes!

Business Case for Change

• Align safety focus with productivity and profitability results• Dual focus: loss minimization and profit maximization • Shift to leading indicators to focus on prevention-based activities • Add indirect cost multiplier to calculate total cost of accidents • Apportion premium and charge-back loss costs to operating units

(departments/divisions)• Fund for preventive and corrective actions from corporate budget

(costly to have accidents, not to prevent them)• Promote and incent through bonus managers & supervisors based

upon both safety & production performance

Creating Sustainable Advantage

• Becoming or remaining an employer of choice • Experiencing less voluntary employee attrition• Retaining existing customer base• Attracting new customers• Expanding market share • Enhancing the ability to forge strategic partnerships and alliances• Differentiating from competitors

Make Safety Your Brand!

Risk Leadership

“The ability to learn faster than

your competitors may be the only

true competitive advantage.”

-- Arie DeGeus

Cal BeyerMurray Securus

39 N. Duke StreetLancaster, PA 17608

Phone: 717.397.9600www.murrayins.com

cbeyer@murrayins.com

www.linkedin.com/in/calvinbeyer/

@Riskleadership and @ContractorRisk

Contact Information