Lagging productivity – what British companies may be missing

The hidden link between innovative safety management and operational performance

By Jerome Hart, Market Leader UK, DuPont Sustainable Solutions

& Garrett Forsythe, DuPont Sustainable Solutions US Consultant &
Principal, JGF Performance Consulting, LLC

“Early in my career, I was given the opportunity to lead the ~50 person operations and
maintenance team of a high hazard chemical operation. This was my first real operational
leadership role. The unit had a recent history of very serious safety incidents and numerous
operational challenges. My new supervisor, George, gave me some advice that has stuck with
me since that day. He said, “Garrett, if you focus on safety and your team’s individuals as
your first priority each day, you will have fewer and fewer production issues.” From his
many years of experience, he knew the link. He mentored me in genuine leadership, root
cause investigation techniques, improving the unit’s safety practices and compliance, and
gaining the commitments of all workers (with me having to be sure my behaviour modelled
and led the way). We also worked on predictive and preventive maintenance and improving
how the shift teams and maintenance group worked together. Not only did our safety
performance improve significantly, and the teams better identified and corrected situations
before they could escalate, but we began to break daily, weekly and monthly production
records as well. Morale improved too and turnover of our workers also dropped. Thirty plus
years later, the operation is still running strong, production rates have greatly increased, and
the safety culture legacy continues, reinforced by the many leaders that followed me.”
Garrett Forsythe –
over 37 years’ experience in various DuPont Business, Operational
and Supply Chain leadership roles

Despite a strong economy and the lowest unemployment rate in years, figures by the Office of
National Statistics show that productivity in the UK remains low and lags behind many other G7
nations1. While the causes are hotly debated, there is no doubt that sluggish productivity has a
negative impact on salaries, investment, growth and profitability – and morale. Beyond low capital
investment, an aging infrastructure, a skills shortage and lacking innovation, many commentators
also cite poor management, poor leadership and lack of employee engagement as root causes 2.

They may have a point. Companies could be looking at the subject from a fresh, innovative
perspective and examine what tools and approaches they can use to drive productivity. In our
history of working with global companies as operations management consultants, we have
repeatedly noticed the correlation between risk management and productivity. Some of our
customers such as German industrial engineering and steel company ThyssenKrupp claim to have
seen a sustainable increase in productivity of 30 per cent after working to innovate and improve
safety management. Lockheed Martin also reports that a stronger safety culture at its Paducah Plant
led to an increase in employee productivity of 24 per cent and cut factory costs by 20 per cent 3.

1
Office of National Statistics, Statistical bulletin: Labour productivity, UK: January to March 2018,
https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/labourproductivity/bulletins/labourproducti
vity/januarytomarch2018
2
www.huffingtonpost.co.uk/paul-sloane/uk-economy_b_17716224.html
3
https://safetylineloneworker.com/blog/is-safety-productive/
These reports are backed by independent research by the Aberdeen Group when it surveyed more
than 175 maintenance organisations. Best in class businesses, the top 20 per cent, were the ones
that had a very low recordable injury frequency rate of 0.18, at the same time ran at 90 per cent
overall equipment effectiveness (OEE) and achieved an operating margin vs. corporate plan of 23 per
cent or more4. By comparison, the companies that were at industry average with an injury frequency
rate of 1.01 only saw an operating margin of +4 per cent, and the bottom 30% with a 2.21 injury
frequency rate reported an operating margin that was down -4 per cent on the corporate plan. All
the companies that experienced zero injuries were best in class across all other metrics as well. Why
is that the case? And how can companies derive productivity benefits from management systems
originally designed to address risk and safety management?

The answer may lie in the fact that the processes and systems put in place to ensure a good safety
performance can act as a surrogate in other areas such as quality, efficiency, output, etc. The root
cause analysis process for safety, for example, is the same as for productivity issues.

Make it personal
Gallup’s 2017 study “State of the Global Workplace” 5 found that 85% of employees worldwide are
not engaged or are actively disengaged in their job. They also discovered that business units in the
top quartile of their global employee engagement database are 21% more profitable than those in
the bottom quartile. In other words, senior leaders need to engage employees to achieve success.

Highly effective safety management systems rely on the introduction and application of KPIs,
standards, procedures, etc. just like other management systems do. Where safety management
systems differ is in their direct effect on employees. Safety is personal. If, instead of just writing a
few well-chosen words in annual reports and mission statements, business leaders can visibly
demonstrate commitment to employee safety that will have a tremendous impact on mindsets and
behaviours throughout the organisation and ultimately change company culture. Morale and
purpose are likely to improve.

All employees in a company should be empowered to take decisions, raise issues, make
recommendations and look at operations with a critical eye. Engagement in safety gives employees
the opportunity to have a voice, to feel enabled to look out for themselves and others, and to derive
personal benefit from their actions. That can lead to greater personal investment in the company
and a form of “self-leadership”, in which employees take on ownership and accountability for their
actions. They become people who follow the rules because they want to, not because they have to.
The spill-over effect is a change in attitude to quality, output, productivity. Systems that are in place
to share know-how on safety across multiple sites, to track performance, to discuss ideas, to provide
and listen to feedback directly between management and the workforce can also be used to track
and address other management issues. Organisational characteristics that foster "interdependence"
– characteristics such as stepping outside your own role to help others, becoming a networking
contributor by collaborating and sharing knowledge, developing organisational pride, caring for
others and helping them to flourish – can help companies not only to reduce risks but also improve
productivity.

Problem solving, innovation capabilities and risk mitigation

An updated version of the original DuPont Bradley Curve shows this correlation between safety
performance and productivity. It pinpoints the four stages of safety maturity: Reactive, Dependent,
Independent and Interdependent (see Figure 1). In 2009, the vice president of Global Workplace
Safety at DuPont demonstrated the connection between an organization’s safety culture strength

4
Aberdeen Group Compliance Management in Environment, Health and Safety, April 2013, p. 4
5
GALLUP, State of the Global Workplace, 2017
and its incidence rate6. In his study, interdependence was associated with the highest safety
performance. An organisation that has reached culture maturity has all the ingredients of an
engaged workforce, including the problem solving and innovation capabilities to achieve the dual
competitive advantage of effective risk mitigation and superior value creation.

Figure 1: DuPont Bradley Curve: Operational excellence link to operational risk management

If improved safety management has such a positive effect on productivity, does the same apply in
reverse? If companies focus on achieving productivity gains, might that not lead to better safety?
Experience has shown that this is not the case. Many companies develop innovative technologies or
introduce a new culture in order to expand. But when the emphasis is more on processes and
systems improvements designed to yield growth and less on mindsets and behaviours, organisations
often neglect the consequences of a failure to address risk in a holistic way. The results can be
harmful to both reputation and safety performance as Amazon’s, Tesla’s and Samsung’s recent
experience has shown. In fact, the weaker safety performance can then also have an immensely
negative influence on productivity and lead to the exact opposite of what the company initially set
out to achieve with its productivity drive. Tesla, for example, temporarily had to shut down its
facility while Samsung had to pay significant worker compensation claims.

Prevention and cure

If organisations want to improve safety and productivity at the same time, they need to start from a
good understanding of the current company culture. DuPont Sustainable Solutions uses an
employee Safety Perception SurveyTM to gain a clear picture of the status quo, to identify silos within
the organisation and to evaluate leadership mindsets by seniority level. We overlay the survey
findings with site observations to check perceptions against operational reality. Reliable knowledge
of the current company culture challenges allows for the development of the most effective, tailored
improvement plan. This always focuses on safety first, but provides an extremely sound basis for
improvements in other operational areas, including productivity.

Vision and commitment by senior leaders

6
http://www.dupontdenemours.fr/content/dam/dupont/products-and-services/consulting-services-and-process-
technologies/consulting-services-and-process-technologies-landing/documents/A_Key_to_Sustainable_World-
Class_Safety_Performance.pdf
For companies to identify the opportunities for better engaging the organization through an
effective and holistic approach to safety, there needs to be a clear leadership vision and
commitment. People do what people see. When there is a clear commitment to safety, and the
processes, procedures and leadership practices are in place, improvements to productivity naturally
follow. Worker engagement increases and benefits result in many different aspects of the business.
In other words, performance in all areas is not just down to systems and processes, but to leaders
who show they care, who lead by example and visibly follow the culture they want to promote. For
many companies, a strong safety culture is the enabler that allows them also to continually and
sustainably improve productivity.