The Escalating Consequences of EHS Incidents

for High Tech Manufacturing Industry David Turberfield

Consequences of EHS issues

Business success depends on

innovation, cost control, timely

output delivery, supplier

management…

EHS management

» Its dynamic and a source of

increasing risk to business

» Community locally, new

graduates, competitors and

customers increasingly care

about it

Poor EHS management

» Taints success – of

organizations and individuals

» Can have very significant cost

implications

» Damages reputations 2010 Deepwater Horizon @ $60B

Mitsubishi Materials Corp. Yokkaichi, Japan,

January 2014 (Youtube screenshot)

SK Hynix, Wuxi, China,

September 2013 (BusienssKorea)

Co

mp

an

y

Perf

orm

an

ce

Stakeholder

Expectations

Growing Gap

Actual performance

• Incidents/ accidents

• Compliance

• Eco-efficiency

• etc.

Time

A source of increasing risk to the business

Media

Incidents

Education

Science

Regulation

Declining tolerance of risk

A B C D

In a recent survey,

99% of our clients

believe we are now in

the lift-off phase

Anticipating big challenges

Strength defined by where its weakest

Performance varies across teams/operating units/divisions

Almost all organizations have areas where performance is more fragile

Activity specific

Specific regions/geographies

Organisational entities/departments

If it goes seriously wrong, its most likely to do so in these areas

Often in areas where leaders don‟t „get it‟ … and are resistant to changing the status quo

Identifying these weak spots is critical

Performance

Great project teams and not so good ones

Each and every team has its own culture, performance

standards

Culture a product of leaders‟ actions and especially their

reactions

Quality of leadership in the team the most critical factor by far

in determining

Performance on EHS and everything else

Whether the team has

accidents

Behaviour

Behaviour =

We can only change how people act if we get them to think

differently

Thought

+ Action

Performance all depends on leaders’ actions

Risk Control /

Accidents

Compliance /

Non-Compliance

Acceptable /

Unacceptable

Impacts

Achieving a zero noncompliance culture

Better outcomes only if front line personnel change their behaviours (i.e., if

people think and act differently)

Behaviours on the front line will only change if their leaders up and

down the line change their behaviours

How do you quickly change the behaviours of leaders … especially leaders

of operations which present the greatest risks for the business – the ones

that „don‟t get it‟?

Causing improvement - getting leaders to think and act differently

Telling leaders to change is a big ask. And it probably won‟t work!

Simple steps to deliver and sustain improvement

Get the leaders WANTING change – up and down the line

Equip them to deliver behavioural change down the line

Make it real in the field – robust hazard recognition for leaders at all

levels and their interactions with folks absolutely critical

Assessment for leadership alignment on the need for change

Risk Control /

Accidents

Compliance /

Non-Compliance

Acceptable /

Unacceptable

Impacts

1. Observations and

photos of at risk

conditions and work

practices

3. Discussion

with leaders on

extent to which

their

behaviours,

culture they

create,

processes they

use are giving

rise to

behaviours on

the front line

2. Discussion

with folks on

the front line to

understand

why they are

behaving in a

way which is

creating

suboptimal

outcomes

Graphics

What‟s this layout for?

Plain slide without a text box –

used for inserting graphics e.g.

pies, bars or images

Time to Act Actions Outcomes Building on…

Field observations and causal

analysis with escorts

Working sessions with the

leadership lead by the escorts

1-on-1 sessions with leaders

High impact closing with photos

Case for change for the

leadership

Status in the field

Breakdowns

Here and now

Personal

Data you have

Prior exercises

Established

programs

Element

EHS Leadership

Training: Providing

leaders up and down the

line with the means to

change behaviours

Coaching Leaders on

Hazard Recognition

and High Impact

Interactions

Mobilizing Champions

to Sustain and

Improve Performance

Leadership Alignment/

Diagnostic

8 high intensity hours in the

classroom with leaders at all levels

Leaders make choices

Impacts of accidents

How it is now and why – case for

change

Define a new path

Choosing a different path

Impacts of accidents

Safety: a matter of

choice for leaders

Its not ok

Practical changes they

can make

Data you have

Prior exercises

Established

programs

2.5 hours in the class room

5.5 hours in the field with coaches

(1:2 or 1:3)

Peer sharing changes and

focus on 2 fundamentals

Hazard recognition

Creating a culture of

oversight

3 hours in the classroom and 5

hours in the field – Coaching Based

Interventions

Building capacity to

support leaders in the field

Data you have

Prior exercises

Established

programs

Positive Interventions – Socratic Questions

ASK. DON‟T TELL. 1. First Encounter to Establish

Rapport

2. ”Do you see anything not quite

right with what A is doing? –

Helping B to identify the hazard

3. “What could happen here?” –

Helping B to identify the

Consequences

4. “Why did you not notice it before?”

- B feels he’s let his colleague down

5. “Don’t you want to watch out for

each other?” - B makes a

commitment to watch out for his

colleagues

6. “Would you do that by getting C

and asking him the same questions

that I asked you?” – B shows his

commitment by spreading his

learning

The Asian Challenge…

Steadily aging assets

Week enforcement

High risk tolerance

Command and control

leadership

Reluctance to report bad

news

Mixed cultures and

languages

Skills and competencies

Systems and leadership

We have helped our clients improve outcomes and transform EHS performance

“This day-and-a-half has changed the way I think about my job and the way I interact with others. I can‟t

wait to get out there and try it.”

“I left here yesterday and told my men that from now on they would be seeing my true colors. I‟m going

back now to show them that I can be better than I‟ve been.”

“If I leave this project tomorrow, this training will be something that I take with me for the rest of my life

and career. It has made me a better leader and a better communicator.”

Project Citation

Oil Refinery, Singapore 55% reduction in Total Recordable Incident Rate over a period of six months - endured two years. HSE Manager “our best year ever”.

Chemical Manufacturer, South Korea

- Unsafe behavior rate for inhalation of dust: 35% to 4% - Unsafe behavior rate for slips, trips and falls: 24% to 5% - Observation Rate increased five fold - Unsafe Conditions Reported: 77 to 144 - Corrective action completion rate: 50% to 93%

Pharmaceutical Manufacturer (API), India

Regional Corporate HSE Director “what we all could not do in the last 15 years, you guys have done in 6 months. We were trying to take the horse to the water and make him drink, but he wasn‟t drinking. But now the horse himself is saying that he wants to drink the water. We see significant change in the leadership‟s thought process, they are taking a full and active lead on safety matters for the first time.”

Chemcial Manufacturer, Indonesia, Japan, Argentina

Global EHS Director “An enhancement to our traditional program that we apply to priority sites that need a more attention in improving their safety performance. The process is very effective in identifying high priority gaps, identifying root causes, and inspiring change.”

Conclusion: Four Imperatives

1. Focus initially on senior most leaders, then leaders at all levels

together

FLLs, Senior Leadership, Middle Management

Employees and contractors

EHS functional staff have a critical role to play

2. Field and consequence focussed

Use photos at first (bring the field conditions to them)

Then with leaders in the field

3. Use high impact presentation, training and interview techniques

4. Externals provide activation energy, expertise and focus – but

changes only driven from within

Carefully selected champions of change engaged throughout to embed capabilities

to sustain improvements

Growing concerns about EHS performance in Asia

• A bigger issue today and a much bigger issue in future …

• A source of increasing risk and opportunity to your business

• Rising to the challenge

Changing behaviours in the field … for good

Through their leaders or not at all

• The heart of the sustainability challenge

• Our challenge

Contact: David Turberfield david.turberfield@erm.com Mobile: +65 9711 8611