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The Wheel of Safety.

Production, quality, service, and safety all keep your business rolling toward profit--but is the "safety wheel" on your organizational cart properly greased? Or is it squeaking?

Organizations with poor safety performance pay a high price for continual mishaps. So do those that slip in and out of a pattern of serious injuries. In contrast, organizations with strong, consistent accident prevention skills, a clear risk management strategy, and a commitment to the well-being of their workers gain clear competitive advantages by preventing injuries before they happen.

Businesses with undesirable safety records sometimes have a shortsighted view of the true costs of accidents. The financial impact of lost work time, low employee morale, high staff turnover, and reduced client services is estimated to be between four and 10 times the insurable workers' compensation costs for any given business. Seldom tracked or analyzed in financial statements, the indirect costs of workplace accidents nevertheless impact profit and loss.

Excellent safety performance depends on greasing the "safety wheel" of the "organizational cart." Imagine the wheels of production, quality, service, and safety propel your organization on its journey toward sales, growth, and profitability. The amply greased production wheel ensures customers receive their materials on time. The wheel of quality assures customer satisfaction, and the service wheel provides the confidence customers need to use your products. Even if "service" happens to be your end product, all of the wheels are really the same on the cart. When the safety wheel is given its fair amount of grease, productivity, quality, and service are delivered--accident-free.

The cart presents a vision of balance and interdependence encompassing all disciplines within an organization. Each wheel relies on the others during the journey. If one starts to squeak, it's telling you there's a problem that requires attention before it slows your cart down. Fail to grease it and the others may chime in which might stop the organizational cart entirely. Organizations with sustained favorable accident records typically recognize and manage this interdependence. Businesses seeking to improve safety performance may not yet have realized how production, quality, and service are connected to safety. It is the difference between luck and skill with sustained accident-free performance.

Safely is Integral

Some organizations don't calculate safety as integral to their progress. Sometimes they may be left with overconfident assumptions about the state of their safety program. It is only after an accident significantly interrupts business that the wheel is found to be broken. They've missed the opportunities that could have prevented the incident and kept the cart rolling on its intended course.

Sound accident investigations usually reveal that the wheel was squeaking before it broke. Squeaks include poor housekeeping; widening gaps with preventative maintenance; high or rising accident frequency or severity; or instances of safety rule infractions being ignored and regulatory violations given low priority. Deeper analysis of contributing causes sometimes determines that changing business objectives-priorities such as growth, new product or service ventures, or consolidation--simply don't factor in associated loss risks.

One way to identify how well accident prevention is intertwined with the organizational objectives has been found in the aftermath of a significant or devastating loss. If the safety wheel is deluged with grease, such as the need for special memos from top management, new safety rules, and more signs, it's evident that safety has not been calculated or managed as part of the organization's objective.

Fortunately, few organizations suffer a crippling loss. Some receive a wake-up call--leaving them thankful that an accident wasn't more serious--and take sound preventative action. Businesses that fail to pay attention when they suffer a serious loss probably also never realize the cumulative effects of routine high injury frequency and severity on their organization. In contrast, organizations that recognize how safety keeps them moving grease the wheel consistently.

Perceived Cost

What prevents an organization from maintaining good safety performance? Usually perceived cost. From the mom and pop store to the Fortune 100 conglomerate, people are in business to make money and safety has been more readily associated with spending it.

Consider the wheels of productivity, quality, and service; these are driven by the desire to make money by serving the customer. The motivation to give the safety wheel its fair swab of grease must be driven predominantly by the desire to maintain a safe workplace. We have to be candid and accept that this is a bit more of a challenge, since the customer isn't going to pay you any more for their goods delivered free of injury to your workers. Safety efforts will tend to be disconnected from getting the job done, much less making money for an organization, unless such effort is consistently managed.

But satisfying consumers depends on the welfare of those who work in the shop or behind the counter. If workers are hurt, production demands cannot be met, quality goes down, service cannot be delivered, and costs increase. Every accident, even a minor one, is a business interruption, and a major one can bring the organizational cart to a screeching halt. Safety articles have described how some businesses never fully recoup after a major disaster, and some never make it back at all.

Business owners could be more motivated to invest in building a stronger accident prevention program if they recognize how this truly affects the bottom line. To this day, rarely are all of the factors analyzed that calculate the losses that accidents really have on the financial statement. This goes well beyond- insurance premiums and experience rating.

Customers won't give timetables for safety performance. But they will respond if there is an accident--they'll call another supplier. Recognizing this connection between customer expectations and accident prevention should provide more than enough motivation to keep the safety wheel running smoothly.

Ron Humphreys is Accident Prevention Manager for Royal & SunAlliance/EBI Cos., in Brookfield, Wisconsin.
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Author:HUMPHREYS, RON
Publication:Risk & Insurance
Date:Apr 17, 2000
Words:969
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