2GET MANAGEMENT COMMITMENT

2.1 WHY GET MANAGEMENT COMMITMENT?

The simple answer to this question is that you will not succeed withoutmanagement commitment. Time invested in gaining management's commit-ment pays off in tangible support, which not only facilitates but also expeditesa long-term process such as PSM implementation. Commitment, as the termis used here, refers to explicit, concrete actions, not merely to rhetoric. "Weare committed to the principles of process safety management" is only the firststep. The goal for gaining management commitment is to complete thethought: "We are committed to the principles of process safety managementand we will devote the necessary staff and financial resources to implementing theseprinciples throughout our operations."

Without such a commitment from management, process safety manage-ment will be far more difficult and time-consuming to implement. An initia-tive that lacks a collective sense of urgency and priority is likely to be carriedout piecemeal, despite the best efforts and intentions of its champion. Overtime, piecemeal implementation is a false economy, since it is likely to takelonger and cost more; most important, it is very likely to be less effective. PSMis a continuous process, not an event, or a series of discrete activities. Withoutcontinuity, the process can easily break down.

Tangible support means not only resources but also standing relative toother company priorities. PSM needs legitimacy as a business objective to holdits own in situations requiring a trade-off between long-term process improve-ment and short-term commercial considerations. No matter how deeply com-mitted safety professionals may be, this legitimacy can only be conferred bytop management, who ultimately must make those trade-off decisions.

As a practical matter, support from top management also creates strongincentives at the implementation level. If PSM is known to be a priority for theboss, it is much more likely to attract active participation within the company.By contrast, initiatives that employees see as "flavor of the month" win (andusually deserve) little continuing employee support.

In addition, commitment from the top sets standards—and deadlines—forperformance. While no one wants to constantly invoke the boss (and it cancertainly be counterproductive to do so), specific, articulated expectationsfrom the top greatly improve the chances that individual commitments willbe met.

Hint:Informally review and consider major initiatives or campaigns (for example,facility safety, employee wellnesst community service, etc.) that have suc-ceeded in your company —along with those that have failed. What madethem work? Incentives to participation? Relevance to job or quality of life?Other? And what about the failures? Lack offollowthrough? Weak endorse-ment? Bad idea in the first place?

2.2 GETTING TOP-LEVEL COMMITMENT

Having established the value of management commitment, the challenge is towin it. While there is no single, fail-safe formula, there are some identifiablesteps to consider in the context of your own company. The ideal champion forPSM knows how the company works and what broad strategic priorities driveits business. In addition, the successful champion is skilled at gaining thesupport of colleagues and building consensus.

2.2.1 Selecting the Right Sponsor(s)

Each company has its own culture and management style, and in many casesthe functional organization differs from the one illustrated in a formal or-ganization chart. Selecting the right sponsor can depend on how well theseorganizations are understood. Also, expectations for the sponsor may varydepending on the organization; in some cases, the sponsor will take a veryactive, hands-on role, while in others endorsement and oversight will be thesponsor's primary contributions.

In addition, the source of sponsorship may differ, reflecting centralized vs.decentralized corporate structures. In either case, effective sponsorship re-quires two tiers: prime mover and key advocate, as shown in Figure 2-1. Theprime mover, or primary sponsor, is the one who authorizes the initiative,while the key advocate is the individual without whose explicit support theinitiative cannot go forward. To select the right sponsor for your company'sPSM initiative, start by identifying the appropriate prime mover and keyadvocate.

In a centralized organization, the most effective primary sponsor is likelyto be the CEO or Chief Operating Officer. In organizations like these, amandate from this level theoretically assures the cooperation and endorse-ment of facility-based management. (In no way should this suggest thatfacility managers' support can or should be taken for granted; rather, thisapproach highlights their key advocacy role.)

Decentralized operations, in which divisional managers have considerableindependence, require commitment from "top" management at a more local-

FIGURE 2-1. PSM Sponsorship Roles

Source: Arthur D. Little, Inc.

In DecentralizedCompanies, May Be:

Division PresidentProduct VPOther

Facility ManagerFacility TechnicalStaff

Local Staff

In CentralizedCompanies, May Be:

CEOCOOSVP OperationsOther

Facility ManagerGM-EHSProduct ManagerOther

Corporate Staff

Endorses initiative andsupports goals, providesresources

Oversees initiatives, setsgoals, supervisesresources

Drives the initiative, makesit happen

Key advocate:

Prime mover:

Champion:

ized level. In such companies, the primary sponsor may be a division presi-dent, a product-line vice president, or a facility manager. However, regardlessof operations managers' levels of autonomy, executive management must alsobe on board as key advocates to assure long-term continuity, consistencyacross the company, and conformance to corporate policy.

In either case, if s important to keep in mind that localized support isneeded for initial implementation, while corporate support sustains the ac-tivity over time.

Hint-In deciding where your primary sponsorship for PSM lies, keep in mind thatthe terms "centralized" and decentralized" can be misleading because theyare relative, not absolute. A company can be seen as decentralized becausemost operating decisions are made at the divisional level, working with broadcorporate guidelines. A division that is part of the decentralized companymay, itself, be a highly centralized entity, with key decisions coming from thetop of the division and most staff resources based at division headquarters,not in the field.

2.2.2 Selling the Need for PSM

Understand Your SponsorHaving selected the right sponsor and identified key advocates, the next taskis to sell them on the concept of PSM—and the need for an effective systemwithin your company. The first step in any selling situation is to know youraudience. It is up to you to do some informal research on the person or peopleyou want to endorse PSM; look for insights into their business priorities, theirtrack records with comparable initiatives, and their professional backgrounds.This will help you:

• Understand their business priorities These might include:—increasing market share—expanding of product lines—expanding into new markets—improving short-term financial performance—achieving other strategic objectives for the company as a whole

• The key point to remember is that your company's top management'sday-to-day priorities are almost certainly different from yours. Their jobis to guide the company as a whole, ever the long term. In determining howbest to do this, they must consider business operations in the context ofa range of factors (economic, social, political) that influence corporatestrategy.

A good place to gain insight into your company's business priorities isyour annual report, which, along with other shareholder communica-tions (quarterly reports, proxy statements), probably contains some dis-cussion of overall corporate goals.

• Determine how much detail on PSM principles to provide. This maydepend on the career paths and professional backgrounds of yourcompany's senior managers. Those who came up through the operationsside, or who have facility-based experience and/or technical training,will probably be more immediately knowledgeable about process safetyand its management than others whose backgrounds may be in finance,sales, law, or marketing. (Note that there are always exceptions! Be sureto consider this question on an individual basis, rather than making broadgeneralizations.)

• Keep your arguments focused. Everyone has had the frustrating ex-perience of listening to someone who takes forever to get to the point, andgets tangled up in irrelevant side discussions. A focused argument targetsthe listener's interests and agenda, and keeps background and side issuesto a minimum.

Examples and anecdotes are often useful; an overreliance on personalexperience or "war stories" loses attention. Similarly, an argument thattries to address every conceivable contingency, quirk, and variation willalmost certainly fail to convince, because of simple overkill.

• Frame PSM in terms of their interests. People pay more attention toinformation that is relevant to them, than to items of general or academicinterest. For example, "PSM provides a cost-effective means of improvingour company's safety performance" addresses two senior executive con-cerns: corporate earnings and exposure to liability. The discussion isframed in terms of the listener's interest; it also focuses on results.

This creates a far more compelling argument than a detailed processdescription or a theoretical discourse on why accidents happen—both ofwhich may be interesting in themselves, but neither of which appealsdirectly to the listener's concerns.

In companies in which senior management has strong operating exper-ience, the concepts behind PSM are more likely to be self-evident. Similarly,some senior managers may have an ongoing interest in process safety and beknowledgeable about CCPS' initiative. In these cases you can limit yourpreliminary discussion of PSM principles to a brief summary.

In other companies, senior management7s knowledge of operations andprocess safety may be limited, meaning that your first task is to provide basicinformation. In either case, if s obviously important to assess—in advance—the information needs of the people whose endorsement you seek. Otherwise,

you can risk boring (or, worse, insulting) those who are knowledgeable, orconfusing (or, worse, intimidating) those who are less so.

Hint:Assessing your target audience's knowledge base and information needs isnot always an exact science, nor does it need to be an exhaustive process.Rely on your own judgment and experience and seek out the opinions ofothers whose insights you trust The key question you need to answer atthis point is, "How much information does this person need from me to makean intelligent decision?"

Hint:As a very general rule, it's better to presume less knowledge rather thanmore because it helps assure that you cover all the bases. It is also easierto shorten a presentation (even while it's in progress) to skip the details thanto add whole sections to fill in gaps.

Identify PSM BenefitsOnce you have a basic idea of who your audience is and what their prioritiesare, the second step in a selling situation is to match the benefits of your"product"—in this case, PSM—to their needs.

New regulatory initiatives (e.g., from OSHA and EPA) and industry pro-grams (e.g., the Chemical Manufacturers Association's Responsible Care®effort) have stimulated increased attention to PSM. While compliance is certainlya requirement in deciding to implement PSM, it is by no means the only benefit.Rather, compliance is the baseline from which other benefits evolve. Thequality and effectiveness of the system your company ultimately adopts couldwell depend on how persuasively those benefits are conveyed. Remember, atthis point in your initiative, the goal is to win endorsement of a concept, not approvalof a full-fledged plan. The core of that concept is the idea that PSM offersbenefits over and above compliance with new regulations, or conformancewith an industry initiative.

One simple way to start this task is first to identify those benefits as theyrelate to your company's operations. You might systematically review CCPS'twelve elements of PSM, asking yourself at each stage, "Why is this a goodidea?" "What's the benefit of doing this?" Then put yourself in the position ofyour selected sponsor and consider each element from that person's perspec-tive. Ask yourself, "How can this activity or approach make my sponsor's jobeasier?" "How would this activity improve my company?"

To broaden your input, you might ask others in your company (forexample,divisional or facility-based safety professionals) to conduct the same review—

both from their individual perspectives and from the position of the chosensponsor. Then compare the responses.

This exercise can yield the core of your selling message, framed in terms ofmultiple benefits both for specific operations and for the company overall.Taking the time to do this up front helps to focus the initiative, and will helpframe the rationale required for senior management buy-in. In addition, if youbring others into the exercise, you can lay some groundwork for futurecooperation. Taking a disciplined approach to identifying benefits also helpsanticipate questions and concerns from senior management and others.

Hint:Be creative and make sure your omnibus list includes all kinds of benefits.While your selling effort should emphasize positives, keep in mind that somelegitimate benefits may be avoided negatives. For example, a given PSMactivity may not yield actual profits but will help the company avoid a financialloss. Similarly, your best focus is probably on very tangible benefits, butdon'tignore those that are less concrete. These might include improvingemployee morale through teamwork or enhancing your company's imagethrough favorable publicity about PSM.

Some potential PSM benefits to consider include:

• improved efficiency arising from consolidating a range of discretesafety-related activities. For example: In reviewing your company'ssafety efforts against PSM guidelines, a facility safety specialist sees theopportunity to tighten up the procedure he follows for reporting nearmisses, ensuring a better mechanism for follow-up. A maintenance en-gineer recognizes that periodic corrosion testing can be incorporated intothe preventive maintenance program, and a plant manager remarks thatsome HAZMAT training courses could be offered to larger classes bysharing instruction with his counterpart at a neighboring company facility.

• cost savings from systematic review of new projects and identifyingsafety enhancements early in the design process. For example: Yourcompany is expanding a facility's capacity. On reviewing the processdesign against PSM guidelines your safety engineers discover that byadding a redundant cooling system, you can reduce risk. Retrofitting toachieve the same reduction would require a major disassembly andreconstruction.

• reduced downtime. For example: Improved maintenance at your facil-ity reduces the frequency of equipment failure. Managing process chan-ges avoids changes that result in process upsets and downtime.

• reduced maintenance costs. For example: Planned preventive main-tenance allows more efficient deployment of your local maintenance staff.Fewer equipment failures result in less equipment replacement.

• improved operations information. For example: Improved monitoringand data logging allow you to track variances in process operatingconditions. Greater reliability means fewer rejects and less rework orwaste.

• improved customer satisfaction resulting from enhanced quality. Forexample: Reduced downtime means you are able to deliver productahead of schedule. Another division, meanwhile, may be able to forestallan anticipated price increase, reflecting a reduction in maintenance costs.

• increased prestige within industry, among shareholders. For example:A major institutional investor scrutinizes your company's environmen-tal, health, and safety track record and decides you have less exposure toliability than your competitors, and thus present a better investmentopportunity.

• improved employee recruitment and retention. For example: Work-force turnover at your company has dropped from an all-time high of 40percent down to 5 percent. An employee survey reveals that your com-pany's employees consistently cite your company's commitment to safetyas an important factor in their level of job satisfaction.

• improved labor relations, through involving union leadership in PSM.For example: Your company took the step of inviting the union shopsteward to become a member of a PSM task team. In addition, yourmanagement agreed to circulate internal safety update memos and otherinformation to union leaders throughout your company. These actionshave helped improve ongoing communications between labor and man-agement, and resulting improvements in safety performance have re-duced the number of safety-related grievances.

Hint:Most senior managers make decisions at a macro level. For example, acompany's senior corporate management considers a $50 million acquisitionto expand into a new product line, hoping to capture 15% of a $5 billionmarket over five years. Decisions such as this require assessment ofcost/benefit to the corporation as a whole rather than in terms of impact ona specific process, facility, or activity (e.g., when a product or brand managerdecides to redirect the marketing budget.) It is up to you to demonstrate yourunderstanding of senior management's priorities and to frame your argu-ments in the context of the company and its industry standing. Present yourrationale for PSM in terms top management can appreciate, using languagethey can immediately grasp.

Make Your Case and Support ItOnce you have identified and prioritized PSMbenefits for your company, theymust be organized into an effective presentation. Presentation formats varyby company, so there is not a single "right" way to do this. Some companiesare very formal, requiring written agendas and leave-behind documents (forexample, Appendix 2.1), and expecting a very structured, scripted presenta-tion with questions and answers at the end. Others are more free-wheelingand presentations take the form of group discussions structured looselyaround a topic outline.

It is up to you to determine your company's style and your management'spreferences, and to develop your presentation in the way that best meets theirneeds and expectations. However, there are some fundamental techniques topresentation development and delivery that may be useful as you considerthis task. These ideas are equally applicable regardless of what form ofsponsorship you seek or what organization structure applies to your company.

2. Start with an outline.Everyone learned this in school, but many people overlook its value in reallife. A solid outline helps keep proposals focused and can also be used as achecklist to assure that all key points are covered. In addition, a detailedoutline can be useful as a tool for midpoint review with colleagues or superiorswhose input would improve the finished product.

A sample outline and a presentation worksheet appear as Figure 2-2.

2. Prepare your proposal for the benefit of key people who mm/ not be present.Even in the least formal of organizations, effective proposals contain enoughdetail and information to stand alone, independent of an in-person presentation.

The opportunity to sell PSM should not stand or fall with a single meeting.As a practical matter, scheduling time with a company's CEO can sometimestake weeks or even months, and it may ultimately be more efficient to providea document that can be reviewed at leisure and then discussed.

A useful way to approach this is to develop your proposal (1) as if keymanagers are unable to participate in a meeting, but request a full briefing, or(2) as though you have a sudden emergency and a colleague must stand in foryou. This means you cannot rely on brief, cryptic bullet points on an overheadslide, or fall back on "I'll cover that in the Q and A." This approach meansmore work on the front end, but the discipline it requires is likely to pay off interms of results since it helps assure comprehensive treatment of the subjectand a more thorough appreciation from your audience.

3. Use examples.Selling a concept is in some ways more difficult than selling a specific productor activity because it is less easily quantified or described. For this reason, PSM

FIGURE 2-2. PSM Presentation Worksheet and Sample Outline

WORKSHEET

When is the meeting?

How much time is allotted?

What kind of meeting space?

What kind of audio-visual support is available?

Who is attending?

What is the format?• Forma! presentation

• Structured presentation with Q & A

• Informal group discussion

Other

Who is presenting?

If more than one person, what is each one's role?

What is the stated purpose of the meeting?

What do I want to achieve?

What are the three most important thoughts I want the group to come awaywith?

This example presumes a 90-minute meeting with senior managers, someof whom have relatively little exposure to process safety management.The PSM champion has decided to devote the first hour to a structuredpresentation, using the balance of available time for questions andanswers.

1. Introduction (5 minutes)Present agenda: what we will be covering, in what orderSpecify goal for the meetingAcknowledge contributions of others

2. Fundamentals of process safety management (15 minutes)What is PSM? Why is it important?What is required by regulation?Briefly describe CCPS' 12 elementsSummarize PSM goal and intent

3. How is this different from what's in place now? (10 minutes)Systematic vs. fragmented approachEmphasis on management systemsIntegrates PSM into business operations(Use examples from inside the company)

4. What are the benefits of a systematic approach? (IO minutes)Make the case that compliance can be achieved piecemeal, butcontinuous performance improvement requires an overall strategy.

Compare with TQM, other companywide initiativesEmphasize that PSM draws on existing capabilities and structureDemonstrate that performance improvements can yield:• cost savings (how)• reduced downtime (how)• competitive advantages (what are they)

(Use results of benefits identification exercise, section 2.2)

5. Industry comparisons (5 minutes)Present comparative intelligence:• What are other companies doing about PSM?• How do we stack up?• What can we learn from others' experience?

(Use formal and/or anecdotal examples from conferences, industryassociations, CCPS, etc.)

FIGURE 2-2. PSM Presentation Worksheet and Sample Outline

6. Next steps (10 minutes)Outline work to date (meetings with colleagues, fact-finding, etc.)Recommend establishment of task team (membership, responsibilities)Present process overview:• Define goals• Evaluate present status• Develop detailed plan• Develop specific PSM systems• Put the system into practice• Measure and monitor

Provide broad schedule parametersSuggest categories of resource requirementsCommit to delivering a detailed action plan within a specified time-frame

7. What is needed from senior management today? (5 minutes)Stress the need for senior level commitmentIdentify categories of necessary support:• setting goals• communications• resource allocation

Reinforce personal commitment as PSM champion• Ask for the order

FIGURE 2-2. PSM Presentation Worksheet and Sample Outline(continued)

particularly lends itself to illustration. Moreover, examples from your in-dustry help shed light on what the competition is doing, which puts PSM ina context that senior management will readily grasp. Published articles andindustry studies lend third-party support to your rationale for PSM; so doesanecdotal information gleaned from your counterparts at other companies.

Examples can be effectively woven into the proposal text, with documentsincluded as appendices. Another approach is to incorporate all supportingexamples in a single section devoted to "Industry Perspective/'

4. Prepare an executive summary.This section, usually only a page or two long, summarizes the subject, theproposed course of action and its rationale, and the next steps. Its organizationtracks the proposal outline.

Executive summaries can be very useful because they help your audienceremember the highlights of a lengthier presentation, and provide them witha "script" on the subject. For example, a CEO or division president may decide

to brief your company's board of directors on the company's PSM initiative;a manager may want to provide an overview to facility staff. A conciseexecutive summary provides PSM sponsors with ready access to key informa-tion. Figure 2-3 shows an example of an executive summary.

Depending on your company's style, the executive summary may be theprimary selling document, with the full proposal acting as backup or providedas an appendix.

5. Rehearse.If your selling opportunity includes an in-person presentation, rehearsal canbe a wise use of time, especially if your company tends toward more formalmeetings. If possible, ask a group of colleagues to spend an hour or so listeningto the presentation and providing a critique. Your boss7 participation inrehearsal can also be very helpful in reinforcing his or her support andaddressing concerns prior to meeting with senior management.

Hint:In conducting a dry run, pay particular attention to the question and answersession: ask your colleagues to play devil's advocate and challenge yourproposal. If you are preparing by yourself, review your proposal critically andtry to anticipate the toughest possible questions.

Hint:As you prepare your PSM proposal, ask yourself at each stage if it answerstwo questions: "Why should we do this?" and "Why should we do it this way?"Keep your audience and their agenda in mind at all times.

2.2.3 Selling the Need for Top-level Commitment

All right, says senior management, you've convinced us that PSM is a goodidea, and we like your ideas. Now, what do you want from us? Alternatively:All right, says senior management, we're sold; go do it. What do you need usfor?

Define the NeedAnswering these questions requires having a clear idea of what role you wantsenior management to play and being able to articulate very specific recom-mendations for their participation. As discussed in previous sections, the roleof senior management in implementing PSM may vary company to company,reflecting differences in style and structure.

However, there are three broad areas in which top management can bevaluably deployed, regardless of individual structure or style. These are

Following is an example of an executive summary developed to accom-pany the presentation shown as Figure 2.2. Executive summaries highlightthe key points of a detailed presentation for easy access. The longerand more complex your presentation, the greater the value of anexecutive summary, which should be organized to parallel the structureof the longer document.

Executive summaries generally appear at the beginning of a document,just after a table of contents.

PROCESS SAFETY MANAGEMENT:CHALLENGES AND OPPORTUNITIES

/. Introduction and BackgroundPrompted by new regulation, industry standards, and good business prac-tice, our corporate safety staff has prepared recommendations for the CoreManagement Group concerning Process Safety Management (PSM).PSM, which applies a management systems approach to process safety, isrequired by OSHA 1910.119, The Center for Chemical Process Safety(CCPS) has issued guidelines for recommended PSM practices.

//. Applying PSM Principles to Our Business OperationsPSM improves overall safety performance by organizing safety-related ac-tivities in a consistent manner that promotes continuous improvement.While most of the components of a PSM system are already in place, thereis no unifying management system that knits them together and maximizestheir value.

PSM builds on what is in place, and seeks to integrate safety issues intoongoing business operations"as opposed to imposing an elaborate exter-nal structure. The goals of PSM are process-oriented, not procedure-driven, and reflect the Total Quality Management principle of continuous im-provement.

///. PSM Benefits at Our CompanyThe ultimate goal of PSM is improved safety performance. In addition, overand above the mandatory compliance with OSHA standards, there arepotentially significant business benefits to implementing PSM, including im-proved efficiency, cost savings, and competitive advantages.

These can be achieved through reduced downtime, consolidating safety-related activities, improving operations information, facilitating processdesign improvements, minimizing exposure to liability, and improving cus-tomer satisfaction.

FIGURE 2-3. Sample Executive Summary

IV. PSM Industry PerspectivePSM commands a high priority in our industry and our counterparts andcompetitors are actively pursuing PSM initiatives. The primary competitorof one of our divisions has become highly visible in promoting its PSM sys-tem, and several others are active on the topic at conferences and inprofessional journals. Our safety staff is continuously monitoring newdevelopments and seeking opportunities for information exchange.

V. PSM Action Plan.Our corporate safety staff proposes a team approach to implementingPSM1 drawing on expertise throughout the company to:

1. Define company goals for PSM2. Evaluate our current PSM status3. Develop a detailed plan for management review and approval4. Develop specific PSM systems5. Test the system at a selected pilot site6. Measure and monitor progress

By this means the team can:Establish benchmarks for performanceCapitalize on existing structures and activitiesOrganize the process against a schedule and budgetEnsure sufficient management inputTest the system prior to large-scale implementation

VI. PSM Resource RequirementsThe team will develop a detailed plan, including timetable and cost es-timates. In the meantime, it is estimated that the process, from startthrough pilot testing, will require about 120 staff-months over a period of ap-proximately 18 months, including time from corporate division and facilitypersonnel. A more rigorous estimate will be made before we move intoPSM system development.

VIL ConclusionPSM is a cost-effective means of improving safety performance while:

—improving efficiency;—realizing cost savings; and—achieving competitive advantages.

The Core Management Group's continuing endorsement and support ofPSM will be critical to success. Our corporate safety staff stands ready tolead the PSM initiative, and seeks the Core Management Group's approvalto proceed.

FIGURE 2-3. Sample Executive Summary (continued)

discussed in further detail in Section 2.3, but are presented here to help clarifyyour thinking about defining the need for management support.

• Setting corporate goals for PSM. These may be tangible (e.g., dollarsavings, percent reduction in accidental releases, etc.) and /or philosophi-cal (e.g., "Our company will be an industry leader in process safety").

• Communicating the importance of PSM. This includes internal as wellas external communications and may be part of broader corporate com-munications strategy or a freestanding effort.

• Providing resources for PSM. This means recognizing that PSM willrequire some level of investment and authorizing appropriate allocationsof staff and other resources to achieve PSM goals.

In addition, some common denominators probably apply across the board:

1. Senior management's role supports but does not duplicate the efforts of the PSMchampion. The boss should understand that you do not expect anyone todo your job for you. At the same time, senior management should recog-nize that there are some activities—such as allocating resources, or repre-senting the company in a high-level business forum—that you cannotappropriately undertake.

2. Senior managers generally respond better to specific requests than to broadexpressions of need. "First we need a mission statement" is likely to draw aquizzical expression and limited assistance. "The task group has devel-oped this mission statement for your review and signature; we plan todistribute it to all plant locations to kick off the effort" tells the boss exactlywhat you need and why you need it, and establishes that you expect tocarry the ball.

3. Top-level support is often most valuable when it is highly visible. Perhaps themost useful role senior management can take on behalf of PSM is toendorse it explicitly—both inside the company and externally. Seniormanagers' active participation in communications about PSM lends cred -ibility and generates awareness of PSM as a company priority in ways thatnot even the most dedicated staff team can achieve.

4. Senior management may appear to have a short attention span. It is importantto stress that PSM implementation is a long-term process, and thereforethe commitment requested involves long-term participation. In otherwords, a simple "yes, go do it" is unlikely to be sufficient; it is up to youto clarify your expectations for senior executives' involvement over time.

The following section provides some suggested ways to use managementcommitment and may help you further define the role you propose for yourcompany's senior PSM sponsor.

Hint:Try framing your expectations of senior management in terms of a jobdescription. This may help you focus your own thinking and provide the basisfor this section of your proposal.

Hint:Make sure your expectations for senior management and others are consis-tent with your company's operating style. For example, a CEO who isaccustomed to delegating most decisions is unlikely to accept a role thatseems to take away divisional authority, while a facility manager with littlefunctional autonomy will probably be leery of taking a highly visible rolewithout approval from a superior.

Ask for the OrderOne of the most common mistakes in closing a sale is forgetting to ask for thebusiness. Even sales professionals make this error, sometimes out of a mis-placed sense of nicety or a reluctance to appear pushy. In the case of sellingPSM, you are asking for senior-level support of an important initiative. Youwill need this support to be effective and you should not hesitate to request itexplicitly.

2.3 USING TOP-LEVEL COMMITMENT

Having won commitment from the top, the next challenge is to put it to gooduse. As summarized in the previous section, the most effective application ofmanagement commitment involves three kinds of activities, as detailed here.

2.3.1 Setting Goals for PSM

Goals set for PSM at the senior management level will tend to be very broad,as distinct from the far more specific objectives a PSM champion will establishas part of the planning process. These broad goals help define the company'sposition with regard to a PSM initiative and provide a focus for achievingconsensus.

Hint:The relationship between broad goals and specific objectives is comparableto the difference between policy and procedures. Goals help establish whatyour company expects to achieve, while objectives delineate how thosegoals will be met.

PSM goals will vary from company to company, both in style and in substance.For example, a company with very little currently in place and few resourcesmight decide on the simple goal of achieving full regulatory compliancewithin a specific timeframe and budget. For companies with more to buildupon, more ambitious goals mightbe established; forexample: "Our companywill become recognized in its industry for our process safety managementinitiative/' PSM goals can be qualitative, quantitative, or a combination ofboth. For example:

• By year-end 1993 all process engineers will have completed hazardanalysis training.

• By year-end 1994 we will reduce releases by 50 percent companywide.• By year-end 1995 we will have implemented a fully integrated process

safety management system throughout our worldwide operations.• Over the next 12 months we will reduce downtime by 25 percent com-

panywide.

PSM champions can play an important role in helping management setgoals. Since they are likely to be knowledgeable about the specifics of PSM aswell as about the company's operations, they should be well-equipped torecommend realistic, workable goals. Depending on the company's culture,developing goals for management review and approval may be an appro-priate task for the PSM champion; in other organizations, the managementgroup may take this on itself. In either case, the PSM champion should beprepared to stay close to the process, offering the appropriate level of support.

Keep in mind that goal-setting is not a finite event, but rather should beseen as an ongoing process in the spirit of continuous improvement. Processsafety management is never "over," "finished," or "done;" as objectives areachieved, new and more ambitious goals replace them. Over time, as PSMbecomes integrated into your company's business operations, safety manage-ment goals should become part of your company's business planning.

Troubleshooter:Make sure your company's short-term objectives (e.g., updating all P&IDs)are consistent with broader PSM goals (e.g., accurate process safetyinformation), and communicate them in ways that clearly encourage workhabits and procedures that support PSM performance. For example, youremployees need to understand that the company will achieve its goal ofreducing reportable incidents by changing its PSM procedures, not itsreporting processes.

Vision StatementsMany companies find it useful to express corporate goals as vision statements,which articulate top management's operating philosophy concerning a given

initiative. Effective vision statements contain enough specifics to be meaning-ful but are expressed broadly enough to be applicable throughout the company.In addition, vision statements are usually written in a manner appropriate forwide dissemination. A well-written, well-thought-out PSM vision statement canbe the centerpiece or launch for internal and external communications.

Hint:Once you have agreed on broad goals for PSM, consider enlisting someonefrom your company's corporate communications or public relations staff tohelp you draft a formal vision statement. This will help you: (1) assure awell-written document and (2) win communicators'support by involving them.

Hint:Vision statements that lack substance are easily dismissed as window-dressing. Once it's drafted, review your PSM mission statement critically forthe "fluff factor."

Hint:If your company is actively involved in industry initiatives such as Respon-sible Care®, a formal mission statement may have been prepared that couldbe helpful as a guide.

An example of a PSM vision statement appears as Figure 2-4.

Group Mission Statements and ChartersGroup mission statements express more specifically the role and function ofa given group within the company. In essence, a group's mission statementor charter officially empowers the group to take on a particular job. It conferson the group the approval of top management, and outlines the company'sexpectations for its performance.

These kinds of mission statements, while not confidential, are generallyintended for distribution within a company, not outside it.

Hint:If your company has established a formal product stewardship or other majorintracompany program, a charter designating a work group, committee, ortask force may have been developed that you can use as a model

Following is an example of a broad vision statement a company mightdevelop and disseminate once its management has made a commitment toPSM implementation.

[What is the commitment]Company X is committed to the continuous improvement of process safetymanagement (PSM)1 the discipline that helps assure that we conduct ourbusiness operations in a manner that protects and promotes the health andsafety of our employees and our neighbors.

[Why is it important]We recognize that the effective management of process safety is critical toour continuing business growth, and that, to be effective, PSM issues musthave an integral role in our daily business operations and decisions.

[What does it mean]To meet this challenge, we have adopted a comprehensive approach tothe management of process safety throughout our operations, which buildson our existing strengths. The goal of this approach is to assure that, in allof our businesses, we maintain PSM standards and practices that:

—meet or exceed all applicable regulation;—are continuously reviewed and upgraded;—establish us as an industry leader in safety performance; and—create a competitive advantage through increased efficiencies

and enhanced company reputation.

[How we will achieve it]Goals such as these can only be achieved through an ongoing, company-wide effort. We endorse and promote process safety management as apriority throughout our businesses, and will dedicate the appropriate resour-ces—time, skills, money—to assure continuous improvement.

FIGURE 2-4. Sample Vision Statement

Hint:Mission statements and charters are often most useful when expressed interms of job functions rather than of individuals, especially for long-terminitiatives during which there may be turnover in the composition of thedesignated task team.

An example of a group's PSM mission statement appears as Figure 2-5.

Following is a sample charter or mission statement, establishing acompany's PSM champion and task group, endorsing their activities, andbroadly defining their responsibilities.

Memorandum

To: All Company X employees

From: Chief Operating Officer

As you know from the policy statement distributed last month, we recog-nize continuous improvement in process safety management (PSM) as acompany priority.

I am pleased to announce that the Management Committee has desig-nated (corporate safety director) to lead the development of our com-panywide PSM initiative. In this capacity, (name) will be responsible forrecommending a detailed plan of action for review and approval by theManagement Committee, Our expectation is that, once approved, the planwill be tested at a selected site to be determined, and ultimately imple-mented throughout the company.

An important part of (name's) mandate from the Committee is to assurethat our plan for managing process safety reflects our businesses* diverseneeds and takes full advantage of our resident experience and specializedexpertise. To do this, (name) needs your help; effective implementation ofPSM can only be achieved as a team effort. For this reason, we have en-couraged him to identify and call on experts throughout Company X towork with him.

I know I can count on your assistance, which will contribute strongly to ourefforts by assuring that the right mix of divisional and technical perspec-tives is represented.

In the coming weeks, as the PSM initiative takes shape, you'll be hearingmore about our plans and progress. In the meantime, if you have ques-tions, please don't hesitate to call (name) or me.

Please join me and the Management Committee in congratulating (name)on his new assignment, and in supporting our commitment to excellence inprocess safety management.

FIGURE 2-5. Sample Group Charter or Mission Statement

2.3.2 Communicating the Importance of PSM

With goals established and agreed upon, the next step is to communicatethem. The form and content of PSM communications will vary greatly, de-pending on the individual company, but some general principles apply tovirtually any companywide initiative:

• Communications support is critical to the success of any major companyeffort, especially in cases such as PSM that are both relatively complexand inherently long-term.

• Communications serves two functions: information and promotion. Bothare important to the success of PSM, which requires a significant amountof intracompany information transfer as well as sustained high levels ofemployee participation.

• Communications addresses both internal and external audiences. Bothare important and neither should be ignored. However, the extent andthe nature of their interest are often very different, and so are theirinformation needs.

• Communications, like PSM, is a process, not an event. Whether it's a staffmemo or a "publicity blitz/' a one-time effort is generally a waste of timeand money. A more effective approach considers communications as along-term priority, a core component of the overall initiative, rather thanas an "add-on" or an option.

• Communications can take many forms, both formal and informal, but thecontent must be essentially consistent to be effective.

• Communications should be two-way, incorporating mechanisms (e.g.,questionnaires, response cards, callback numbers, etc.) for soliciting feed-back from the people receiving information. This is particularly true ofcommunications that support initiatives like PSM that require coopera-tion and may require changes in working habits.

Hint:If your company has people responsible for internal and external com-munications, seek them out Consider inviting a member of your company'scorporate communications or public relations staff to join a PSM discussiongroup.

Work with What's in PlaceIn considering how to communicate the importance of PSM, a useful place tostart is by reviewing the ways in which your company ordinarily communi-cates. Make a list of every company communication you receive. Then con-sider how you get the information you need to do your job and how youcommunicate with your colleagues and subordinates. Make a list of theinformation sources you rely on professionally. Finally, make a list of all the

materials you can think of that your company routinely distributes to a wideexternal audience.

The combined lists should yield a preliminary inventory of the communica-tions vehicles available to you within your company, for example:

• Formed internal communications: newsletters, chairman's letters, bulletinboards, video conferences, staff meetings, etc.

• Informal internal communications: memos, hallway meetings, drop-invisits, conference calls, training sessions, electronic mail, etc.

• External information sources: industry groups, professional associations,technical journals, print and broadcast media, professional developmentcoursework, etc.

• External communications: quarterly and annual reports, press releases,new product announcements, existing product information and updates,customer newsletters, community newsletters, etc.

Keep in mind that there may well be other communications vehicles inactive use within your company. For example, employees at operating facil-ities may rely on pre-shift meetings to get information summaries; somedivisions and facilities may have their own newsletters in addition to acompanywide publication.

Hint:Find out where your company's formal communications originate. Who is incharge of putting out press releases, newsletters, product information?Arrange to meet with those responsible, to see how you might incorporatePSM information into these publications and offer to provide sample texts.

Any or all of these communications vehicles can offer an opportunity forconveying information about PSM. Using existing vehicles is usually moreeffective than creating altogether new ones. In addition to the obvious benefitsin terms of time and money, using familiar communications media reinforcesthe idea that PSM is part of your company's ongoing business, not a new-fangled notion that is being imposed.

Identify Priority AudiencesAs indicated previously, PSM information and messages have different valuesfor different audiences. Your company's workforce has a more immediate andspecific interest in the initiative than people who are less directly affected, suchas plant neighbors, shareholders, or the general public. This doesn't meanconfining communications efforts solely to company employees; it simplysuggests that you organize communications priorities to reflect levels ofinterest and information needs.

Listing all the people you want to reach and then ranking them helps tofocus your communications efforts. For a company that is undertaking PSMat the facility level, such a list might look like this:

• Internal—Facility management group—Facility safety professionals—Shift supervisors—Shop stewards—Employees

• Intracompany—Division president—Other facility managers—Facility safety professionals

• Intermediaries—Union leaders—Regulatory authorities

• External Constituents—Key customers—Local officials—Community activists—Neighbors

As this list suggests, the first priority for this facility is its own people, whowill require the most comprehensive information and who should receivepriority attention. Others on the list have widely varying information needsand levels of interest, all of which the facility manager must take into accountin developing a communications plan.

Introduce PSMA company's PSM initiative deserves some special treatment to attract theinitial attention that will help give it momentum. Depending on what isalready in place, a special edition of the company newsletter could be pro-duced, including a letter from the CEO and a copy of the PSM vision statement.Other information might include identification of the proposed PSM cham-pion and a summary of the company's preliminary plans. (Two examples ofsuch summaries appear as Figures 2-6 and 2-7.)

The same information could be provided in a letter to all employees, postedon local bulletin boards or mailed to employees' homes. On a grander scale,senior management may address employees through a specially producedvideotape, distributed to all locations.

Hint:A questions-and-answer format, or an "Interview with the Chairman (or othersenior sponsor)" can help present PSM information and messages in aconversational manner that many readers find more interesting than a morestatic narrative.

External communications about PSM can parallel internal efforts. For ex-ample, the CEO or other senior sponsor might take advantage of a publicspeaking opportunity or a media interview to discuss the company's commit-ment to PSM and the ways it has devised to implement it.

Similarly colleagues who participate in professional conferences may wishto incorporate PSM information in papers or speeches, to highlight the com-pany's approach and accomplishments.

Hint-Prepare a briefing document, drawn from the PSM proposal and executivesummary, that executives, colleagues, and staff can use in responding tomedia queries or in crafting speeches and other presentations.

Regardless of the form of initial PSM communications, it is important topromise future information and regular updates—and to deliver.

Hint:If you have established a schedule for PSM meetings, this can provide atickler for updating internal communications. Otherwise, establish a time-table (e.g., monthly) for providing your internal "sources" with current infor-mation about progress.

Troubleshooter:Beware the "big splash;" it's a hard act to follow. Large-scale publicity—-whether inside or outside a company—raises expectations of immediate,radical benefit or change that are often unrealistic, and puts your credibilityon the line. Make sure PSM communications are consistent, timely, accurate,and persuasive to build and maintain credibility over time.

Troubleshooter:Be sure to get appropriate approvals for any information you disseminate,especially outside the company. The news media can be very valuableconduits for conveying information so long as you work within yourcompany's guidelines.

Following is a plan summary that a decentralized company might use in in-troducing its corporate PSM initiative, either as a stand-alone document oras part of a larger communications package.

What are our process safety management plans?

First, we have identified (name) as our PSM "champion" to lead the initia-tive. His first task will be to assemble a task group representing our bestthinking in a range of key disciplines, such as safety engineering, designengineering, occupational health and safety, facility management, andprocess safety. In addition, the task group may call on other specialistsfrom throughout Company X, to lend special expertise as needed.The team's composition will be announced as soon as it is finalized.

(Name's) task group has responsibility for developing detailed recommen-dations for implementing PSM throughout Company X, and overseeing itsinstallation at a pilot site to be determined. We expect the process to takeapproximately 18 months, during which the group will submit regularprogress reports to the General Manager of Environmental, Health, andSafety, and provide the Management Committee with periodic updates.

These progress reports will be circulated to facility managers for review,comment, and input at each stage, to assure that the end result fullyreflects local concerns and capabilities.

At Division A, the Facility Managers' Council has accepted similar respon-sibilities, under the direction of the division's Vice President of Environmen-tal, Health, and Safety. We expect ongoing interchange between the twotask teams, which will facilitate the process throughout Company X andhelp us take advantage of the full range of our process safety experience.

The overall process is expected to include the following steps:

1. Define goals. The task groups will define the company's goals forprocess safety management. These may be qualitative or quantitative; theywill take into account the varying needs of the company's different opera-tions. Estimated time required: one month

2. Evaluate current status. Because PSM builds on what is alreadyin place, the teams will research and assess our current status,to identify strengths and opportunities for improvement.

Estimated time required: three months

3. Develop a plan. Based on established goals and current status, theteams will develop detailed plans for implementing a process safety manage-ment system, including projections of time and staffpower requirements andother resource needs. When completed, these plans will be our blueprint forPSM implementation, subject to refinement based on experience.

Estimated time required: two months

FIGURE 2-6. Example of Preliminary Company Plan Summary

4. Develop specific process safety management systems. Workingwithin the plan, the task groups will develop specific systems and proceduresfor implementing PSM. The Division A team will focus on its own opera-tions, while (name's) group will direct its efforts toward the other divisions.

Estimated time required: eight months

5. Put the system into practice. Pilot sites will be selected in collabora-tion with facility management, to test the new PSM system. By this means,we can assure that the system works and identify any areas needing refine-ment, in a cost-effective manner.

Estimated time required: as systems are developed In step 4

6. Measure and monitor. Installation at the test sites will be closelymonitored against an established timetable, as well as in terms of our es-tablished PSM criteria and goals. Throughout this process, we will solicitfeedback and other commentary from the pilot sites for incorporation intoongoing process improvement.

Estimated time required: as step 5 is performed

These timeframes are "guesstimates" at this point, and are subject tochange. Similarly, at each stage of the process there will be a number ofactivities that may affect overall scheduling. On completion of this process,we are confident that Company X will be well on its way toward achievingits goal of industry leadership in process safety management.

FIGURE 2-6. Example of Preliminary Company Plan Summary (continued)

2.3.3 Providing Resources

The third area in which top-level support is needed is assuring that the PSMinitiative receives the resources required for success. It is only realistic toexpect that PSM implementation will require a significant level of funding—either direct or indirect.

Senior management will probably expect the PSM champion to develop adetailed budget estimate as part of the implementation plan. Well in advanceof that, however, management needs to know orders of magnitude, types ofresources, and approximate levels of effort to make the commitment required.No executive is likely to offer a blank check without at least a rough idea ofwhat is needed. Resource estimates both for the short-term planning task andfor the longer-term implementation should be developed; your estimate ofshort-term needs can be relatively detailed, while your long-term estimate willsimply communicate the expected range of resources needed.

There is no single formula for estimating resource requirements, which area function of two variables: what's planned (PSM goals) and whaf s already

This sample is designed to summarize the key steps in the process acentralized company or division plans to follow in developing PSM. Notethat the primary differences indicated relate to reporting requirements andtimeframe; the process components remain the same regardless of or-ganizational structure or management style.

How does the division plan to develop a PSM system?

The Facility Managers' Council has responsibility for developing a recom-mended PSM system for facilities, under the direction of the division VicePresident for Environmental, Health, and Safety.

The four-member Council expects to draw on others within the division fortheir special expertise; for example, professionals with experience inprocess safety, safety engineering, and occupational health and safety,along with others, may be called on to advise the Council.

The overall process the Council will follow includes these components.Primary responsibility for each one will be assigned to an individual Councilmember.

1. Define process safety management goals: What do we want to achieve?2. Evaluate current status and activities: What are we doing now?3. Develop a detailed plan, including resource requirements and timetable:

How can we meet our goals?4. Develop specific PSM systems and procedures for installation:

What do we need to do differently to achieve our goals?5. Put the system into practice at a selected facility:

How can we translate our recommendations translate into practice?6. Measure and monitor progress against PSM goals and planning timetable:

What can we learn that can be applied throughout the division?

The entire process is expected to take six to eight months.

FIGURE 2-7. Example of a Preliminary Divisional Plan Summary

in place (PSM status). A company that sets very modest goals when it alreadyhas many PSM components already fully operational, obviously can achievethem with relatively few resources. (In such a case, the PSM champion mightconsider urging more ambitious goals for the initiative.) In other companiesthe decision may be made to use PSM as an opportunity to upgrade a wholerange of safety- and process-related activities well beyond compliance levels,requiring significant resource allocation.

The process outlined here is intended to help "structure the ballpark/' Asyou read through it, keep in mind that the goal at this stage is to providemanagement with a general sense of the nature and scale of PSM's resourcerequirements. In addition, applying this kind of discipline early in the gamehelps lay the groundwork for more detailed planning.

Identifying ResourcesOne way to approach this task is to identify categories of resources and definebroad parameters for their deployment for managements review. This willprovide executives with a general sense of what the PSM initiative will require,without committing themselves—or the company—prematurely.

The kinds of resources needed are fairly straightforward. The primaryresource requirement for most PSM implementation efforts will be staff-time,both professional and clerical/secretarial. It is also reasonable to expect toincur travel expenses at intervals throughout the process, especially for com-panies with multiple facilities. Support resources, such as telephone, com-puter time, facsimile, photocopying, and document production, will almostcertainly be required in any initiative.

As your planning evolves, you will probably identify other resource needsunique to your company, in addition to these three areas. However, takentogether, these three core resource categories provide a good starting point fordeveloping a rough projection of PSM resource needs.

Allocating ResourcesHuman resources, whether in-house or retained by contract, cost money, andrepresent either a direct or an indirect investment. In lobbying for PSMresources, be realistic about the time you think the effort will require: under-estimating the level of effort can raise management's expectations beyondyour ability to meet them. At the same time, estimates of staff required can'tignore prevailing company priorities; for example, a request for five newstaffers during a hiring freeze is unlikely to be favorably received.

One way to approach the human resources question is to consider not thepeople but the tasks to be performed, and the skills you think you will need.Especially in large companies, where bodies of expertise may be isolated fromeach other, this technique helps broaden the resource base. It also makes iteasier for managers to assist you: defining your needs in terms of skills sets,rather than of specific individuals, gives them greater flexibility.

The skills matrices shown as Figures 2-8 and 2-9 are provided as an exampleof one way to approach this task. The skills indicated are examples only; theremaybe others your company's initiative might need. The first matrix, Figure2-8, helps to locate skills within your company. Note that as a practical matter,one person may have multiple skills, just as several people may share one keyskill. Note also that this matrix can help identify "pockets" or concentrations

Com

pany

HQ

Div

isio

n A

EHS

Div

isio

n B

R&

D

Div

isio

n B

Man

ufac

turin

g

Div

isio

n B

Adm

inis

tratio

n

Div

isio

n C

EHS

Div

isio

n C

Man

ufac

turin

g

Faci

lities

Oth

er

Where Can We Find Them?

What Skills Do We Need?

Process safety

Risk assessment

Design engineering

Maintenance engineering

Operations

Operations management

Communications

Budgeting

Project planning

Other

FIGURE 2-8. Sample Skills Matrix

of desirable skills within your company that in turn can help you decide whereto locate the primary effort. For example, if you determine that most of theskills you need reside in a single part of your company, a mote localizedapproach may be suggested. On the other hand, if necessary skills are dis-persed throughout the organization, this may create the opportunity forintracompany collaboration.

This exercise also helps you identify gaps in your company's skill and staffbase. Where gaps exist—either because the skills are not represented, or thepeople who have them are not available because of other commitments—youmay wish to consider drawing on outside consultants. For the purposes ofresource allocation, consultants or contractors are best considered in terms ofthe value they add in either of two categories (or both): supplementary skillsand supplementary time.

The second matrix, Figure 2-9, helps you begin to estimate levels of effortand associated costs for your initial planning. Keep in mind that these can onlybe very preliminary estimates at this point. However, it's useful to start theprocess with this kind of discipline, recognizing that the results will be subjectto continuous refinement.

Hint:Who should lead the PSM system implementation effort? It is best toconsider skills and experience, not job title. You want someone with good"people" skills, a solid understanding of process safety, a track record ofearning respect within the organization, and good project managementskills. You need someone who can be both advocate and manager.

Hint:In considering human resource needs, don't forget to include your own role.If you believe your commitment to PSM may temporarily displace otherpriorities, make sure to include provisions for them.

Travel is relatively simple to forecast, once you have a broad idea of who withinyour company will participate. Keep in mind that in-person meetings providea means not only for information exchange but also for teambuilding; whilemuch of any team effort can be accomplished by phone or in writing, it isgenerally a good idea to bring people together at key points in the process.

Support resources more often than not directly reflect level of effort. Sometimesthese can be expressed as a percentage (15 to 20 percent) of the cost of staff.

FIGURE 2-9. Sample Level of Effort Allocation Matrix

* Estimated level of effort for initial planning phase only.

Hint:In weighing the pros and cons of inside staff versus outside contractors, themost useful determinant is long-range cost-effectiveness. It's easy to under-estimate the true cost of using employee resources, since these expensesare "buried" within ongoing business.

Process Safety Management Initial Planning Effort

What Skills Do We Need?

Process safety

Risk assessment

Design engineering

Maintenance engineering

Operations

Operations management

Communications

Budgeting

Project planning

Associated expense costs

How Much of Each?

Per

cent

age

ofT

otal

Effo

rt

35

9

2

2

35

9

4

4

2

Num

ber

of S

taff

Day

s*

1 0O days

1 5 days

5 days

5 days

1 0O days

10 days

1 0 days

5 days

5 days

Associated Costs ($)(Travel, Reports, Etc.)

$25,000 (total)

Hint:Regardless of whether most of the groundwork is developed by employeesor contractors, effective PSM initiatives are company-driven, not imposedfrom outside the company. Effective implementation relies on a sense ofinvestment among the people who ultimately will put theory into practice.

APPENDIX 2-1 SAMPLE DOCUMENT PRESENTING PSMTO SENIOR MANAGEMENT

Following is a sample "leave-behind" document developed for use in PSM presenta-tion to company management. Documents such as these are commonly developed tocapture presentation content for future review and/or for the benefit of key people whocould not attend.

Note that this document closely reflects the presentation sample shown as Figure 2-2on pages 16-18. As an alternative to preparing a separate document, you mightconsider distributing copies of your overheads or slides, if they are comprehensiveenough to be meaningful without narration.

Introduction

This document presents an approach for implementing Process Safety Man-agement (PSM) within our company, prepared for the Core ManagementGroup's review. It is organized to include the following sections:

• Background: Fundamentals of Process Safety Management—What is PSM and why is it important?—Regulatory requirements and industry standards

• Applying PSM to Our Needs and Business Operations—How is PSM different from what is already is place?—Why change now?

• PSM Benefits—Improved efficiency—Cost savings—Competitive advantages

• PSM Industry Comparison• PSM Action Plan

—Task team formation-̂ Process overview—Benefits

• PSM Resource Requirements—Preliminary estimates

• Summary and Conclusion

/. Background: Fundamentals of Process Safety Management

What Is Process Safety Management (PSM) ?The Center for Chemical Process Safety (CCPS) defines PSM as "The applica-tion of management systems to the identification, understanding, and controlof process hazards to prevent process-related injuries and incidents/'

Why Is PSM Important?

• Regulation requires PSM• Industry endorses PSM• PSM supports good business practice

What's Required by Regulation?

• OSHA 1910.119 [Summarize regulation.]

What's Endorsed by Industry?

• CCPS has identified 12 elements that together make up process safetymanagement. [List 12 elements.]

What Good Practice Does PSM Support?PSM improves overall safety performance by organizing safety-related ac-tivities in a consistent manner that assures and promotes continuous improve-ment. PSM improves efficiency and reliability, reducing downtime, rework,and waste.

IL Applying PSM to Our Needs and Business Operations

How Is PSM Different from What We're Already Doing?

• Safety standards and practices tend to evolve opportunistically ratherthan systematically.

• Like most companies, we tend to make improvements incrementally,based on specific experience.

• This is a sound approach that has yielded many improvements. Forexample:—Division A revised its near-miss investigation procedure after last

January's incident.—Division B expanded its emergency response training when a neighbor-

ing facility had a spill.—Division C added safety professionals when we reorganized into busi-

ness units.

—Division D added process safety to the Facility Managers Council'sstanding agenda at the suggestion of their in-house auditors.

• We have high safety standards and committed people—thanks to whoseefforts our track record in process safety is a good one.

Why Change Now?We have all the components for continuous improvement. What we don'thave is a comprehensive management system that incorporates all of thesecomponents and maximizes their value to the company as a whole.

PSM offers a systematic approach to safety issues that

builds on these kinds of improvements;knits incremental changes into an overall strategy;integrates safety issues into business operations;recognizes critical differences among businesses; andpromotes employee participation in a flexible management system.

Ill PSM Benefits

This kind of approach can have many benefits to our company.By organizing and systematizing our safety activities, we can improve our

overall safety performance, and, in the process:

• Identify areas where we can improve efficiency,• Identify areas where we can save money, and• Identify areas where we can gain a competitive advantage.

PSM benefits can take many forms, including examples such as:

Improved Efficiencies and Operations Information

• We could gain efficiencies by consolidating a range of safety-relatedactivities. For example, if several of our facilities offer similar HAZMATtraining, plant managers might be able to share instructors—either withina single division, or across divisional boundaries.

• If we improve process monitoring and data logging, we'll be betterequipped to track and predict variances in process operating conditions.

Cost Savings

• We could save money by identifying safety enhancements early in thedesign process.—For example, Division A is expanding its Akron plant. PSM guidelines

for process design review might turn up risk reduction methods thatcan be incorporated into the design phase, instead of more expensiveretrofitting.

• We could save money by reducing downtime.

—Improving maintenance helps reduce equipment failure. In addition,managing process changes can help avoid process upsets and thusreduce downtime.

• Or by reducing maintenance costs.—If we are able to plan ahead for preventive maintenance, we deploy

maintenance staff far more efficiently.

Competitive Advantages

• We could gain a competitive advantage by reducing downtime.—If we reduce downtime, we can deliver product faster and keep our

prices lower.• We could gain a competitive edge by enhancing our value to the invest-

ment community.—Reduced waste and increased efficiency reduces manufacturing costs

and increases profitability. Reduced environmental, health, and safetyliabilities make us a more attractive investment.

• Or by improving employee recruitment and retention.—Our commitment to worker safety can help us attract good people and

reduce turnover.

These examples are provided to demonstrate that PSM offers our companya range of benefits over and above the minimum threshold of regulatorycompliance.

IV. Industry Comparison

Our competitors are moving quickly to develop and implement these kindsof PSM systems. While we haven't done an exhaustive study, we do knowthat:

• CMA reports that a majority of its members are starting up PSM activities,or reviewing existing programs.

• CCPS sponsors frequent conferences and workshops on the topic.• Division A's primary competitor presented a paper on PSM at the Spring

AIChE technical conference.• Division B's competition has established an in-house consul ting group to

provide PSM training seminars.

V. PSM Action Plan

PSM is required by OSHA, and we must comply. Our work to date stronglyindicates that, for us, the most efficient and effective approach is one that

reaches beyond compliance to achieve the goal of continuous improvementin:

—safety performance;—efficiency;—cost savings; and—customer satisfaction.

To achieve these goals, we propose the following preliminary action plan.

Establish a PSM Task Team.A sound PSM system needs the input, expertise, and support of a wide rangeof our people. A multidisciplinary, interdivisional team would provide theinsight and the skills this initiative requires.

Such a team should include experts from all four divisions, as well asrepresentatives from corporate staff. Key disciplines include:

—process safety—design engineering—facility management—risk assessment—operations

Process Overview.Once formed, the team would quickly establish specific responsibilities foreach member, and would work against the following process:

1. Define company goals for PSM2. Evaluate our current PSM status3. Develop a detailed plan for management approval4. Develop specific PSM systems5. Put the system into practice at a selected pilot site6. Measure and monitor progress

Process BenefitsThis process enables us to:

• Establish viable benchmarks for PSM performance• Capitalize on existing structures and activities• Organize the process against a schedule and budget• Ensure sufficient management input• Test the system prior to large-scale implementation

VI. PSM Resource Requirements

Undertaking a PSM initiative will require time, staffpower, and funding—direct and/or indirect. The task team's first priority will be to develop adetailed plan for the Core Management Group's review and approval, includ-ing specific schedules and cost estimates.

This level of detail requires understanding and agreement as to where weare and where we want to be.

At this point, it would be reasonable to consider—f or planning purposes—the following broad parameters: 120 staff-months, spread among a teamincluding corporate, division, and facility personnel over an 18-month period,at the end of which we can expect to have a PSM system that has been carefullythought out and fully tested, ready for implementation throughout the com-pany.

VII. Summary and Conclusion

PSM is a cost-effective means of improving safety performance that also offersus the opportunity to:

—improve efficiency;—realize cost savings; and—achieve competitive advantages.

We can achieve these goals with:—multidisciplinary teamwork;—intracompany cooperation; and—top management's endorsement and support.

We are ready to start work today, and prepared to stay with the initiativethrough its completion. To do this, we need this group's help to:

—Guide the process of setting PSM goals that support our businessobjectives;

—Communicate the importance of PSM throughout the company and tothe outside world; and

—Provide the resources needed to do the job right.

Most important, our process safety management initiative needs management'scommitment to proceed.