Money makes the culture go 'round
Google the term â€œsafety cultureâ€ and youâ€™ll quickly turn up about 61,500,000 references. In safety and health circles culture is on everyoneâ€™s mind these days. And thereâ€™s no lack of opinions about what makes for a healthy and effective one. It must start at the top. Teamwork is at its core. You need safety champions throughout.
In ISHNâ€™s December issue (on page 50), Dr. Dan Petersen lists ten factors that shape an organizationâ€™s culture, including decisions, rewards, measures, history, systems, supervisors, managers and engagement.
What about money? Specifically, profits. Can you have a quality safety culture if your organization is hemorrhaging dollars on the bottom line?
Winners and losersIn our 22nd annual White Paper survey of ISHN readers this year, we compared responses from organizations that experienced sales and profit increases in the past 12 months with those that saw sales and profits decline.
First, it should be noted that winners far outpaced losers in 2005. Fifty-eight percent of White Paper respondents reported bottom line gains; only 15 percent saw their bottom line take a hit. Sales and profits were flat for about a quarter of responding firms.
In assessing how profit performance impacts safety and health activities, hereâ€™s the first thing we noted: on paper, you donâ€™t see many differences.
By that we mean there are few gaps between financial winners and losers when it comes to having the basic building blocks of safety and health programs in place. For example:
In fact, in some areas financial losers look better, on paper at least, than the winners. Sixty-three percent of firms reporting profit losses provide formal training for safety committee members, versus 58 percent of profit producers. Seventy-one percent of firms struggling with sales and profit report writing specific safety responsibilities into all job descriptions, compared to 66 percent of financially healthy firms.
There is one area of program activity, an important cultural component, where profitability makes a difference: long-range planning. Fifty-four percent of respondents in firms that made money in the past year report their site has a three-to-five year safety plan, compared to 41 percent of respondents in firms where profits declined.
Digging deeperMore significant differences surfaced when we probed into personal perceptions. And as Dan Petersen writes, â€œPerception of culture is what makes or breaks safety.â€ For example:
The ability to improve safety systems and engage management â€” both crucial cultural components â€” were affected by the health of an organizationâ€™s bottom line. Only 12 percent of firms showing profit gains reported it was â€œdifficultâ€ or â€œvery difficultâ€ to improve systems such as lockout-tagout or confined space entry â€” compared to 29 percent of firms showing profit declines.
Asked about increasing management support for safety, 25 percent of profit-generating firms found it difficult or very difficult, compared to 38 percent of profit-draining firms.
Question of supportThe bottom line picture can definitely affect a safety proâ€™s relationship with top managers, especially when it comes to doling out resources. More than one-third (37 percent) of pros in firms with growing profits in the past year reported increases in budget and staff resources, versus only ten percent of pros in firms with declining profits.
And looking ahead, about one-quarter (24 percent) of pros in financially healthy firms say their budget will grow in 2006, compared to only two percent of pros in economically challenged companies.
As for staffing, cutbacks are three times more likely in firms losing money. Thirty-four percent of pros in the firms draining profits expect staff cuts in 2006, compared to 11 percent of pros in healthy firms.
So here is a bottom line assessment for you to consider: effective organizational safety and health cultures require, among other things, resource support, the ability to make system improvements, good relations with management, and a positive belief in managementâ€™s leadership. ISHNâ€™s 22nd annual White Paper research shows in many organizations, these cultural factors are directly linked to sales and profit performance.