Can safety improve profitability? Lessons from The Power of Habit By Charles Duhigg

Victor [00:00:00]:

Hey, and welcome to another episode of Ideas From Your Peers, where we explore strategies for improving workplace safety and building a culture of wellness. Now, predominantly, we do this by leveraging other people's ideas that they've used successfully in their industry, workplace, or anything in between. And today, we're doing that in a slightly different way. I wanted to explore a book that I've been reading recently, be called The Power of Habit by Charles Duhig. It's a bit of a classic. And there was one chapter in particular that I wanted to discuss because it really highlighted how improvements in small things can have huge ramifications across organizations, particularly in our case, and safety practices. So, in chapter four, Duhig tells the story of Paul O'Neill, who became the CEO of Alcoa. And it was a struggling aluminium company in the 1980s.

Victor [00:00:57]:

And O'Neill's approach was to make workplace safety the top priority of the company. And funnily enough, was a decision that was met with a lot of scepticism and resistance. He spoke to all the shareholders and the investors when he first became the CEO and said that a lot of them were rushing out the doors to sell their stock, saying this guy had lost a plot because he wasn't talking about improving ROI or decreasing the cost of production. He was literally saying, we want to make safety the top priority. And he believed that creating a culture of safety was crucial to the success of the company. And one of the key ways that O'Neill created Changer Alcoa was through communication. Look, he did things like give out its phone number to employees. He encouraged them to report any safety issues or concerns directly to him if they weren't acted upon by their supervisor.

Victor [00:01:57]:

This approach massively empowered employees to take ownership of safety. But it also helped O'Neill to identify potential problems and come up with solutions. They did things like reaching out to the manager. The manager would then talk to their higher-up, and that higher-up would then report back to O'Neill, and they would look at different ways and different solutions that they could tackle. And I think this is really important for organizations where either people lower down potentially in the organization, for lack of a better word, may not feel the ability or the space to be able to speak up or things. Don't get escalated from, say, middle managers higher up for fear that it may be looked upon, that it's their fault that these things are happening. And it creates kind of a systemic process and culture within your organization where these things keep happening, and we're never sitting back to actually identify ways of remitting them. And O'Neill also emphasized the importance of communication and collaboration among employees.

Victor [00:03:09]:

So he encouraged everyone in the company to share ideas and suggestions for improving safety, regardless of their position or department. And this approach helped break down silos, like I was just mentioning, and create a culture of teamwork and shared responsibility for safety. So certain things like rather than moving big pots of molten hot aluminium across the floor, they restructured the supply chain. So it was a more logical sequence of production. And then, not only that, it was, like I say, empowering their staff to make their decisions. Even things as simple as painting poles and steps and things yellow to highlight potential hazards and all of these things. All of these little things. By prioritizing safety and communication, he was able to create what they mentioned in the book as a keystone habit.

Victor [00:04:09]:

And that has a positive impact on every aspect of the organization. As decision-makers in health and safety, talent acquisition, HR, and finance, we can learn a lot from this approach and focus on creating safety, a culture of improved safety, but also open communication within our organization. Often we think that it's the latest thing that we can implement in our organization. We often miss these lower-hanging fruits like open communication with our employees up and down the chain. And so what this led to was Alcoa becoming one of the most profitable companies and having the lowest that they really focused on that zero injury target and they had the lowest injury rates and in that industry as well, death fatalities across the country, and that's continued well on into the future. So from a fledgling business focusing on that one key aspect which I'm sure many of us are biased towards in the safety side of things. And rather than just thinking of it as a small cog, it can actually be a huge improvement within the organization to improve efficiencies and things like that. And then the flow on to profitability, which keeps the lights on.

Victor [00:05:37]:

So I hope you found this episode informative and helpful. Please share it with other people in the workplace safety space who you think might be open to it. And I highly recommend going and looking up buying the book called The Power of Habits, particularly chapter Four, which talks in depth about what we've touched on. Look forward to seeing you all in the next episode.