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Dear subscriber:

DOES IT PAY TO BE GOOD?

Safety pros cringe at this question. Of course it does, right?

But did you read the series of articles in early January in The New York Times (or see the PBS documentary) about fatalities, injuries, and safety and environmental abuses at plants across the country owned by McWane, Inc.? The privately-held company based in Birmingham, Ala., is one of the world's largest manufacturers of cast iron sewer and water pipe.

Allegations against McWane make you question the importance of culture - a hot topic with safety pros.

Here's a company that for 80 years has profited very well, been able to compete and grow against low-cost foreigners, though at least 4,600 injuries have been recorded in McWane foundries since 1995, according to the report. And McWane plants have been cited for more OSHA violations than their six main competitors combined, according to the articles.

"You put people at risk," a former plant manager told a reporter. "We did it every day."

All the elements expected in a healthy organizational culture appear absent, according to reports: No trust. No fairness. Poor communication. Injured workers harassed and disciplined. Hazards ignored. Turnover at some plants nears 100 percent annually.

Yet the bottom line: the company is "enormously profitable", according to The Times. Successful enough for the owners to contribute millions to various causes.

What kind of lesson is this for investing in a total safety culture? For selling managers on the business benefits of safety? For engaging the energy of employees?

In this edition of ISHN's e-newsletter, we examine the hype and realities of "corporate culture", particularly as they apply to workplace safety.

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THE BANDWAGON ROLLS

Corporate culture matters. Happy employees are hard-working employees. There's nothing new about these notions - they have been around for about 100 years.

In the early 1900s, IBM employees sang songs at conventions and sales meetings - "We're Watson's great crew, we're loyal and true / We're proud of our job and we never feel blue". The goal? Instill "the fine spirit of loyal cooperation and good fellowship which has promoted the signal success of our great IBM Corporation," according to the company songbook.

"Safety culture" as a concept first came on the scene in 1987, in a report on the 1986 Chernobyl disaster, according to Dominic Cooper of Indiana University. Since then, many companies around the world have shown keen interest in developing a "safety culture" to reduce the potential for both large-scale, Chernobyl-type disasters and routine accidents, says Cooper.

Now in a new century, the trend shows no sign of letting up. Consider these seminars at the upcoming American Society of Safety Engineers' annual conference in June: "How to Build an Activity Caring Culture." "Effective Safety Cultures: Myths, Magic & Reality." Plus sessions on boosting culture, changing culture, examining culture, and implementing culture.

OSHA's on the culture kick, too. One of its strategic goals from 1997 to 2001: Change workplace culture to increase employer and worker awareness of, commitment to, and involvement in safety and health.

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WHAT'S THE BUZZ?

So why is everyone interested in cultures of safety?

No less an authority than OSHA says that its Voluntary Protection Program work sites (almost 900) and independent research prove that strong safety cultures are the single greatest factor for reducing accidents in any process.

According to OSHA, companies with strong safety cultures typically have fewer at-risk behaviors, low accident rates, low turnover and absenteeism, and high productivity.

"I'm a believer in good safety supporting good profits," says an industrial hygienist. He worked with a corporate president who directed all 50 of his plants to adopt VPP-type programs in a quality-like quest to reduce variability in all management areas. As safety improved, so did operating profits.

Here's more proof: The Gallup Organization has found what it calls a strong link between engaged, committed workers and higher profits. It uses 12 questions (called the Q12 survey tool) to get at employee feelings and attitudes. How your employees answer these questions will tell you something about your own workplace culture:

• Do you know what is expected of you at work?
• Do you have the materials and equipment you need to do your work right?
• At work, do you have the opportunity to do what you do best every day?
• In the last seven days, have you received recognition or praise for doing good work?
• Does your supervisor, or someone at work, seem to care about you as a person?
• Is there someone at work who encourages your development?
• At work, do your opinions seem to count?
• Does the mission/purpose of your company make you feel your job is important?
• Are your associates (fellow employees) committed to doing quality work?
• Do you have a best friend at work?
• In the last six months, has someone at work talked to you about your progress?
• In the last year, have you had opportunities at work to learn and grow?

In recent years this survey has been used by more than 87,000 divisions or work units within corporations, and approximately 1.5 million employees have participated. For companies that were able to provide data across units, comparisons of scores reveal this: those with high Q12 scores experience lower turnover, higher sales growth, better productivity, and better customer loyalty.

So an open, caring, trusting, supporting culture pays, right?

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ANOTHER CULTURE CLUB

But the McWane allegations fly in the face of this "link". Here is a company, according to the press reports, where employees are not respected. Management is not trusted. There is fear about bringing up concerns, or speaking out.

McWane's culture seems to fit the description of Judith Erickson: "If top management believes that people are basically untrustworthy or lazy, it might make sure that employees are controlled and closely monitored. . . It will often blame employees for causing their own injuries and accidents."

A plant nurse at one of McWane's pipe factories quit after four months on the job, according to the articles, because she believed the company routinely targeted injured workers for dismissal.

McWane also seems to fit the type of corporate culture described by Robert Jackall in his book, "Moral Mazes: The World of Corporate Managers":

• Corporations are in a constant state of upheaval.
• Conformity is enforced.
• Managers adjust their personalities to the whims and wishes of the CEO.
• Morality is doing what the boss wants.
• Compromise is not moral defeat, it's a fact of organizational life.
• Managers do not want evangelists working for them.
• Things like injuries are ordinary in a corporation. "Accidents will happen." You adopt an ethos of pragmatism to get ahead. Adhering to absolute principles gets you fired.
• The rules: Don't bypass your boss, tell him what he wants to hear, drop it if he says so, do your job and shut up.

"I was like a robot," said a former plant manager. All that mattered was getting machines moving again after an accident.

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THE PAYOFF

Turnover at one McWane plant at times approached 100 percent, according to the articles. Morale plummeted, but profits soared. In 1996, the plant earned more than $50 million - double the reported profits for the five years before McWane took over, according to the articles.

"Companies like this will always exist," says one safety director. "Money is the only motivator for them and if it comes at the expense of company culture, so be it. In fact, it is their company culture!"

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OTHER SIDE OF THE STORY

McWane officials paint a different picture. They say the company has invested in safety - spending on safety-related projects increased to 16 percent of all capital expenditures by 2002, according to written statements provided to reporters. Millions of dollars are spent each year on safety, according to statements. More than $100 million in state-of-the-art safety, environmental and other compliance systems has been spent recently.

But "virtually none of this current information made it into the story," McWane President G. Ruffner Page, Jr. said in full-page newspaper ad in response to the press coverage. He admitted to "terrible accidents" at McWane plants, but said the company began renewing efforts to improve job safety long before the Times' articles.

Indeed, McWane's president outlined all the essential trappings of a safety culture. The company published a comprehensive model safety program as the "bedrock" of its safety efforts. That program includes monthly safety training, regular safety inspections, reporting unsafe conditions, safety committees, plant audits, annual conferences for all safety personnel, return to work programs, a corporate vice president for safety supervision, and 38 full-time safety and environmental professionals working at facilities.

Yet culture is not captured on paper. It's the way things are done around here, as experts say.

Since the articles were published, an East Texas congressman met with 24 current and former employees of Tyler Pipe, one of the McWane factories, who told him about injuries and terminations at the plant. And a United Steelworkers union official said his efforts to tour Tyler Pipe with a safety and health specialist have been rebuffed twice. The foundry's president said no determination has been made about the request.

Safety pros know about top-down disconnects. Says one risk manager: "Especially in privately-held companies, there's a separation between top executives and plant supervisors. They'll typically respond to a safety failure by saying, 'I'm shocked, shocked that our stringent procedures were not followed by our people at the plant'."

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JUST YOU WAIT

Most safety pros, from OSHA chief John Henshaw on down, firmly believe most companies want to do the right thing. In a letter to The New York Times, Organization Resources Counselors wrote: "The vast majority of the most successful companies in America understand that to be competitive and prosperous they must first protect, respect, and value their workers."

And most pros believe a bad culture will get its comeuppance. "These people will pay the price for their foolishness," says one. "I've experienced that type of mentality up close and personal in my last job. It caught up with them. Sooner or later, it always does."

"If you squeeze versus nurture your resources, it catches up with you in the end, even if it takes 80 years," says Paul Esposito, CIH, CSP.

"At some point, this company will disintegrate from pressures and failings from within and without," says David Sarkus, CSP.

Really?

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MIXED SIGNALS

Consider this contradiction: In the 1990s, America experienced its longest period of economic prosperity ever. The good times rolled. And injury rates declined to record low levels. But look at these disturbing barometers of corporate culture that occurred at the same time: