Safety is Job 2?

Safety isn’t Job 1, as so often claimed. If safety were Job 1, we’d never leave the house. We’d never cross a street. We’d never get in a car or on a plane.

If safety were Job 1, companies would go out of business rather than send employees out to drill for oil, mine iron ore, operate a drill press or a band saw, or drive a truck in New Jersey.

Let’s admit it. Doing the job is Job 1. Doing it safely is Job 1 ½, or Job 2, or Job 1.2, or whatever you want to call it. Are there times that the safety risks are such that the job shouldn’t go on? Sure. Is it every employee’s responsibility to make those decisions at times? Yes. Is it leadership’s job to help ensure those decisions are made properly and supported? Absolutely.

Even more importantly, it’s leadership’s job to minimize the likelihood that front-line employees and managers have to make those difficult decisions about walking off the job or doing the job unsafely. But it’s also leadership’s job to ensure that customers are pleased, shareholders and lenders are satisfied, employees are respected and treated fairly, and laws are obeyed. At different times, those are all Job 1. Balancing those jobs is difficult in the best of times.

That’s the challenge leaders face every day, but especially in companies under stress. When the price of your product drops by half, survival is Job 1. We all know it. Companies under stress face huge demands to cut costs, reduce margins of safety, and do whatever it takes to get the job done faster and cheaper.

There are no easy solutions. But there are some important questions to ask and steps to take. I explore those challenge and questions in a new article on “Managing Risks Under Stress: Challenges for Leaders.” I invite you to take a look at the article and share your own experiences and insights here.

As that article notes, leaders cannot be paralyzed by these risks; if they are, their companies will not survive. The companies that succeed are the ones who adapt, not abandon, their risk governance.

[Scott Nadler is a Senior Partner at ERM and Program Director at US BCSD. Opinions on this site are solely those of Scott Nadler and do not necessarily represent views of those quoted or cited, ERM or its partners or clients, or US BCSD, its members or partners. To share this post, see additional posts on Scott’s blog or subscribe please go to snadler.com. I also invite you to follow me on Facebook or Twitter.]

Risk, resilience and the rear-view mirror

Over the last month, in client work sessions and in conferences in San Francisco and Chicago, I’ve had conversations with over 40 corporate EHS/sustainability leaders. Behind closed doors, despite lots of hard work and good progress, there is more unease than complacency. I heard three related aspects of that unease.

Risk: What’s keeping us up at night?

When asked “what’s keeping you up at night right now?” the leaders gave a surprisingly consistent answer: Basic performance. No matter what the numbers say, are we going to hurt or kill someone? Is everything really working as well as we’d like to believe? If it isn’t, will we find out before something really bad happens? Will we find out in time to fix it?

When asked “what keeps you up around the longer term?” they gave much more varied answers. There was a common thread around emerging or rising expectations and regulations. The details varied but included carbon, safety and sustainability-related reporting (including SASB).

Resilience: Are we prepared to cope with those risks?

Resilience is getting a lot of play. Whether resilience is an important concept or “just the new buzzword” (as one Environmental Director suggested skeptically) is open for discussion.

Resilience can be an important concept. There is important work being done around it, including how resilience might provide a different way to interpret and apply sustainability.

At the same time, it is a popular buzzword. Some use resilience as jargon to dress up “just recover from bad stuff faster than the competition.” That’s important, but it’s way too narrow.

Resilience raises key issues. Resilience is the ability not only to survive, but to thrive in the face of change which may be disruptive, discontinuous and dissonant. That change can come from anywhere, including in your organization, geography, business, or the climate (political, physical, regulatory or economic). At its best, resilience is not just getting better at reacting, responding and recovering when bad things happen – a fatality, a devastating release, loss of a key part of your supply chain. Rather, resilience is anticipating, adjusting and adapting to changes without having that fatality, devastating release, or loss of a key part of your supply chain in the first place.

In one conference, I illustrated that by pointing out a friend in the audience. Let’s call him John. I said I hoped I never had to go to John’s wife, whom I know, and tell her that John had been hurt on the job – and was never coming home. If I did have to do that, though, I didn’t think it would help her much if I then added brightly: “But the good news is, we’re resilient. We recovered so quickly that we replaced John already. John’s dead, but we lost only a few hours of production. Isn’t that great?” That’s not the kind of resilient I want to be.

Resilience therefore poses a challenge to your management systems: Do your management systems help “risk-proof” your company, or are those systems themselves something you have to worry about risk-proofing? Do your management systems help prepare you for the things you can’t prepare for?  Do they actually give you capabilities that are resilient, or just more rigid plans?

Put another way, do your management systems help you sleep at night – or are they something else that keeps you up at night?

Rear view mirror: Where are we looking for insight into those risks?

If resilience is about anticipating and adapting, not just responding better, how do we anticipate the changes and understand the risks?

There’s a big focus on data and information systems. Clearly, we learn more each day about Big Data’s capacity to gather more information about everything (including us, like it or not). Focusing on data has its own risk, though: existing data, by definition, is historical and backward looking. Focusing too heavily on data is like driving down an urban freeway at rush hour with duct tape over your windshield, looking only in your rear view mirror.

The interesting question is, can information systems help you understand the past, manage the present, and anticipate the future? There’s a lot of energy going in that direction, especially in intriguing things like predictive analytics that might help you look forward.

Then, at a dinner with some new ERM Partners (now new friends), I had the most energizing conversation of the month. They reminded me of the most powerful tool for looking forward: gathering smart people with different perspectives in structured ways to create powerful, insightful interactions. Getting and using that insight is subtle. You can mine data; you have to harvest insight. By creating the right platforms and processes we can help our people articulate, compare and combine insights. We can get better at sniffing out the weak signals already coming our way, and finding ways to amplify them without distorting them.

That may create a foggy and messy view through the front windshield, but it sure beats looking backward.

[Scott Nadler is a Senior Partner at ERM.  To share this post, see additional posts on Scott’s blog or to subscribe please go to snadler.com. Opinions on this site are solely those of Scott Nadler and do not necessarily represent views of those quoted or cited, ERM, its partners or clients.]

Sitting here in (strategic) limbo…

Many of us are sitting here in limbo (with all due respect to the reggae management guru Jimmy Cliff).  Senior management faces an uncertain and uncomfortable economic outlook.  It’s not a recession, but it’s not really a recovery. It’s… limbo.

In response, many companies are trying to continue growing, but caution and even hesitation are growing too.  The feeling is far from smooth.  Companies aren’t taking their foot entirely off the accelerator.  But the other foot is simultaneously starting to tap the brakes.  Inside many companies, you can feel the friction, the drag, even some jerky starts-and-stops.

So what are EHS/Sustainability leaders supposed to do in this strategic limbo?  While they are “…waiting for the tide to turn… waiting for the dice to roll”?  Charging ahead seems risky.  But sitting still – and perhaps becoming a sitting target for cost-cutters – is even riskier.

Some EHS/S leaders are taking advantage of this strategic pause to refresh their programs and teams.  As I explained in a new article in the on-line EHS Journal, they’re taking five concrete steps:

  • Look backward: catch up with the changes that came at you too quickly.
  • Look forward: think about what’s coming.
  • Look to the bottom line: think about how you help the company make money.
  • Look inside your program: in light of the past transactions, future scenarios, and bottom-line impacts, what does your program need to do?
  • Look at your people: all of these actions may give you new insight into what your group needs to do and, therefore, what you need out of your team.

A client used this 5-step approach yesterday to help define his strategic priorities. We produced a practical action plan that will help him break out of strategic limbo – and may yield important improvements in his EHS/S programs in the coming year.

For the full article, and more insight into what some companies are doing, check out “Is Your Strategy on Pause?”

[Opinions on this site are solely those of Scott Nadler and do not necessarily represent views of ERM, its partners or clients.]

“Don’t worry about job security…. You’re self-employed.”

1999 was a long time ago — at least two tsunamis, two recessions, several wars and multiple terrorism events ago.  Pundits hadn’t yet declared the world flat, and the biggest technology challenge we faced was the doomsday forecast for Y2K.  1999 was so far back that Apple only made computers then.

In April of that year, ERM held its first Business Integration Forum, kicking off a decade-long series of client events on three continents.  To wrap up that first Forum, James Kelly (a respected expert in management and then an ERM Board member) led a discussion on organizational and personal transformation.  Looking forward, he presciently told the 28 corporate environmental Directors and VPs:

“The business models that emerge will be…more connected but less rigid.  We will be more free to define our own jobs and make our own connections.  We will also be required to make our own connections.  Within our corporations, we will move from a concept of employment to one of self-employment – both in internal and external marketplaces.”

That’s not the future any more; that’s reality.  Hundreds of corporate EHS (environment, health and safety) leaders participated in our Forums in the decade after 1999. I’ve gone back recently to look at what’s happened to some of them since.  Some have retired, of course.  Some have remained in the same positions. Some have flourished, and are leading EHS or Sustainability programs in bigger or more dynamic companies, or are Senior Vice Presidents in the same company.  Others – respected colleagues and good friends –are on the job market.

What differentiates those who flourished from those who struggled?  On the surface, that is hard to answer. These people were all smart and hard-working; that doesn’t separate them.  Certainly some were luckier than others; good people had bad things happen to their companies through no fault of their own.  So I looked for different factors that might explain the different outcomes.

The biggest differentiator, I found, is who seized the initiative, defined their own jobs and made their own connections.  By and large, the EHS leaders who have flourished are those took on more challenges, who built new networks both inside and outside their companies, and who pushed themselves to tackle issues well outside their technical comfort zone.  For some, that meant creating their own luck, leaving seemingly comfortable jobs rather than waiting for events to dictate their career.

EHS leaders now are facing a period when defining their jobs may be mandatory, not optional.  As I wrote in an article just posted on the EHS Journal, the EHS VP may be an endangered species in the US.  The survivors are likely to be those EHS leaders who shape and embrace the emerging hybrid models that combine EHS skills with other pressing business opportunities or risks.

I don’t pretend this is easy.  In 2009 I “fired” myself from ERM’s global leadership team to carve out a role as a full-time ERM consultant.  I made a conscious decision to stay with ERM but in a different role. There was no clear precedent or path for returning to full-time consulting after giving up my clients, projects, teams and sales pipeline.  I had to define my job and build new connections. Taking my own medicine wasn’t fun.  Even with strong management support, it was hard and scary.  (Along the way, I learned some useful lessons that I’ll share in a future blog.)

As I felt all too clearly, the risks of making changes with our jobs and careers are daunting.  “The reality, though, is that the risks of not changing are probably greater,” as James Kelly said back in 1999. “Don’t worry about job security.  There is no job security.  You’re self-employed.”

Opinions on this site are solely my own and do not necessarily represent the views of ERM, its partners or clients.