The McWane Mess

February 11, 2010
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What do you do when your culture is unsafe — and profits are soaring?

Some safety pros cringe at this question.

But if you read the series of articles in early January, 2003 in The New York Times (or saw 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?

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.

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 1200) 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?

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.

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!”

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’.”

Just you wait Most safety pros, from the OSHA chief at the time, John Henshaw, on down the ranks, firmly believe most companies want to do the right thing. In a letter to The New York Times, ORC Worldwide, a consulting firm, 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?

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:

  • Safety ranked 15th out of 18 on the list of top organizational values, according to the American Management Association’s 2002 Corporate Values survey. Empowerment and employee job satisfaction ranked even lower.
  • 70 percent of companies surveyed were guilty of micromanaging; 59 percent failed to give credit; and 36 percent engaged in “kill the messenger” behavior.
  • A Gallup survey reveals that 70 percent of U.S. workers are not engaged in, or are actively disengaged, from their work. Only 44 percent believe corporate leaders are trying to do what’s best for their employees.
  • Only 44 percent of human resource managers surveyed by the Society for Human Resource Management say their organizations effectively communicate strategic direction to employees.
  • 81 percent of owners of businesses with less than 250 employees did not personally attend any sort of safety training seminar in the past 12 months, according to a survey by the National Federation of Independent Business. 87 percent do not have safety committees in their business. 45 percent do not have written safety rules or policies.


Are we prospering and succeeding in safety in spite of ourselves?

What kind of successful safety culture micromanages; shoots the messenger; fails to give credit; fails to value safety, empowerment, and employee satisfaction; fails to engage employees; communicates poorly; fails to model safety leadership; and dispenses with safety committees and policies?

Reactions So how do safety and health pros in the trenches react to these conflicting messages about culture? With typical pragmatism…

“We never said that a company could only make money if they are safe and healthful,” says one consultant.

“Safety and health does not always pay,” says industrial hygienist Lisa Cullen. “Anyone knows that sweatshops can be profitable. Selling drugs and loan sharking are profitable. A good safety culture is the optimal way to manage a decent and ethical company,” says Jim Spigener, vice president, performance improvement technology, BST, Inc.

“This is a moral failure, not a safety culture failure,” says safety professional Hank Grotewold. “Your system must be grounded from the start in a strong moral foundation.” That’s one way. But you’re free to choose your path to profits. “Welcome to America, home of the best and the worst,” says consultant David Pierce.

“Makes you appreciate the beauty of capitalism within the U.S.,” says Paul Esposito. 6 lessons learned Let’s return to our initial question: What kind of lesson is the McWane mess for investing in a total safety culture?

Culture — assumptions, values, beliefs, the way things are done — will influence performance, safety or financial. But so will strategy, discipline, technology, assets, geography, demographics, and the nature of your industry. Cultures don’t exist in vacuums.

Plants located in remote areas drawing on a semi-skilled workforce without a lot of job prospects play by different rules. The paycheck rules. And if you’re making sewer pipe, not baby’s Pampers, your cultural reputation is not a brand issue.

Corporate culture is not the silver bullet, no more than behavioral safety, EHS management systems, employee screening, audits and performance metrics. For years Enron won plaudits and awards for its go-go culture and progressive social responsibility policies. No, culture is but one part of the safety mosaic.

Never argue that the only reason for a safety culture is finances. Says former OSHA boss Charles Jeffress: “Safety is good for business, but you have to care about your fellow humans on the planet.”

Arguing that doing the right thing is justified by economic rewards sends the wrong message to employees. That’s not a culture of caring. Plus, there is still a nagging lack of evidence proving a causal link between safety and health and market performance. CEOs want more sound empirical evidence. “The VPP stuff is feel-good stories without hard proof,” says one EHS pro. Where’s the research?

Varieties of culture and absence of that definitive business case for safety point to one essential: The role of the CEO as champion of corporate values is more critical than ever. Just look at the companies in VPP. They wouldn’t go through the trouble without support from the top.

“In order to change a company culture, senior management must embrace this change,” says Casey Conway, manager, health and safety - North America, Spicers Paper. “If they do not, nothing will change. If they’re open to the idea, safety professionals must show how this culture change will add value to the corporation.”

Your culture change initiative better deliver the goods. “We fundamentally changed the culture 180 degrees at IBM,” says former chairman Louis Gerstner, Jr. “IBMers bought into it. Now if we hadn’t been successful financially, they would have said, ‘hey this isn’t working’.”

Choose you this day the culture you will serve — or try to improve. There are plenty to choose among, a few to walk away from.

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