Institutionalization of HSE
By HSE Solutions, Inc.
OSHA, MSHA, Environmental and Mine Safety Expert Witness
OSHA, MSHA, Environmental and Mine Safety Expert Witness
Institutionalization of HSE is not widely discussed but is the highest level of achievement that HSE performance can achieve. It means that HSE has become part of the corporate culture and is the way "we do business". It has become as natural as breathing. This paper discusses how an organization can achieve this lofty level of success. It is not an easy road but when achieved is well worth the effort.
After 25 years working as an HSE professional around the globe, this author has struggled with the idea that HSE could be institutionalized into an organization. After working in a variety of countries on 4 different continents and having successfully institutionalized HSE, I am convinced that institutionalization of HSE is possible and achievable at any site which follow the principles outlined in this article.
Institutionalization of HSE-Defined
The simple definition of institutionalized HSE is when a company has “embedded HSE into the way the company does business, e.g., HSE becomes as normal a routine as production and maintenance”. It begins as a concept, which might be loosely defined as a mixture of culture and adopted norms of behaviour. It is a learned behaviour which over time becomes company culture. Institutionalization must be seeded and embedded and will not develop on its own. In short, it is a concept put into action through behavioural modification over time. When fully developed, HSE becomes such a norm that it is no longer considered as a separate task from production or other operations.
Eight (8) Distinct Characteristics of an Institutionalized Organization
This author’s experience has shown that organizations which successfully institutionalize HSE have 8 distinct characteristics:
A. Have good knowledge of HSE:
Everyone in the organisation from the Chief Executive to the shop floor laborer has knowledge of HSE concepts and principles with an emphasis on hazard identification and consequences. Getting to this point means that HSE training has to become part of the corporate training plan. HSE workshops or seminars would be planned and scheduled based upon perceived risks. Everyone from the CEO to the janitor is part of a training program based upon risk and their ability to control them.
Real Example: This author was conducting an HSE audit in a Middle Eastern desert oil field when a tea boy brought the tea tray to the auditors. The author asked the tea boy if he knew what HSE meant. He immediately replied, “yes sir, it means I know the hazards of my job and what I need to do to prevent them from harming me”. This tea boy exemplified institutionalization of HSE.
B. Set Challenging HSE goals and objectives:
Companies set challenging but meaningful HSE targets along with production targets. These targets/objectives play a role in job appraisal and bonus pay. As with the training plan, everyone understands their role in achieving specific HSE targets. The old cliché that “what gets measured gets done” is as true as ever. This means that managers set both general and specific targets and goals and measure results usually achieve them. For example a senior manager agrees HSE performance targets and then sets tangible work objectives to achieve these targets. Targets and objectives are achieved with written and endorsed plans. The shop worker and contractor level work with their line supervisors to agree their HSE targets including exactly what the crew can actively do to achieve the results.
Real Example: In the Asia sub-continent, an oil company chief executive set targets for himself which included site visits and audits, as well as setting goals for leading HSE workshops and shop talks. Of course, he also agreed to set plans in place to correct gaps found by independent auditors. This asset turned around safety in 18 months from bottom to top quartile.
C. Transparent Communication of HSE:
Transparent communication is a norm and includes feed-back from a cross section of the company on a routine basis. A variety of feed-back mechanisms are used but among the best are opinion surveys. The surveys are conducted by an outside party with absolute privacy and confidentiality. The results are usually conducted as part of a corporate survey which includes all aspects of the organization culture and style. Setting HSE aside for a separate attitude survey just perpetuates the misconception that HSE is something different or an “add-on” to the job. A company having HSE problems might receive warnings via negative survey responses which indicate hostile perceptions toward HSE. For example, a survey could indicate that workers believe their supervisors ignore safety/HSE regulations and allow or even encourage the workers to take risks. A progressive company sees this as a serious problem since it is irrelevant whether the supervisor really ignores HSE or not. The most important issue here revolves around the fact that the workers perceive it to be true. These surveys serve as a gauge of the HSE climate and will only turn positive based upon actions of management and their supervisors over time. Generally a survey is conducted before a company initiates efforts to institutionalize HSE. The survey with similar questions is then conducted annually to measure progress. These surveys become part of an overall corporate attitude survey. In companies who have achieved institutionalization of HSE, the annual survey can monitor and HSE assess attitudes such as, “Does your supervisor set an example for safety/HSE?” or “Does the company through its action show it really believes in HSE/safety performance?”
Real Example: This author witnessed dramatic turn-around in the results of several attitude surveys. In one case, the HSE attitude responses changed from 70% negative to 85% positive in one year while the accident rate improved by inverse proportions, i.e., improvement of 75%. There is almost always a direct correlation between positive attitude and HSE results.
D. HSE Involvement at all levels:
HSE activities are diffused from the top to bottom, so that everyone has a role to play in HSE. This is developed in the HSE plan which starts as corporate HSE goals and objectives and is diffused downward from the board room to the work site with each layer of management/supervision playing a role.
Real Example: In an un-named country in the Middle East there was competition between the various field sites for the Safety Award for Excellence. Invariably, the winner was the asset that had the most HSE involvement from top to bottom. They set high standards, goals, and objectives for HSE.
E. Regular Commending and Correcting of HSE:
Commending/correcting of HSE performance is common place. Praise for achieving production targets is commonplace and is commonly expressed by one-on-one praise from the supervisor to the worker. Rewards may also be expressed through monetary bonuses, letters of recognition, work-place parties, off-site dinners etc. The key here is that the recognition fit the local culture. Some cultures like social recognition, others prefer money or even gifts.
Real Example: In South America, the author found that rewards which were given soon after HSE success was extremely well received and had lasting impact on the recipient. For example, rewards to HSE local staff varied from cash awards to a pat on the back or a letter of commendation. In the oil fields, laborers appreciated free telephone cards and associated them with good safety performance.
F. The Majority views HSE as an integral part of their daily job.
A sure sign that a company is moving toward or has already reached institutionalization is when most workers believe that HSE is an integral part of their daily routine and not a separate add-on activity. Supervisory walk around audits such as SAA (Spot Activity Audit) developed by this author is a good way to ensure that HSE is integrated into the daily routine. This audit uses feed-back from employees to their supervisors to instil and reinforce the “right way to do the job every time”. Supervisors communicate in a positive manner and encourage workers to perform the job in the “right and safe manner”. These techniques also result in improved productivity and morale. Other systems besides SAA may be utilized as long as the supervisor takes time to converse with employee in a positive manner concerning performance of the worker’s task.
Real Example: This author has enjoyed performing dozens of positive SAAs. This means that the worker being audited has performed his task in an exemplary manner and was deserving of commendation. Experience has shown that positive SAA awards occur only about 5% of the time at the start up of SAA but increases to 10-15% after SAA implementation.
G. Company has achieved top quartile HSE performance
Although this seems obvious, top quartile performance does not happen easily or overnight.
Real Example: This author has seen assets on 3 separate continents move from bottom quartile to top quartile performance in approximately 18 months by using the techniques listed in this paper. The minimum improvement in safety was 50% over this period.
Steps To Getting There
Experience has shown that 12 steps must be engaged in order to achieve institutionalization. They are:
1. Senior management HSE commitment.
This is by far the most important step in achieving institutionalization of HSE. This also may be the most difficult step. This author’s experience has shown that management commitment usual revolves around 3 key issues: a) HSE success means brand success, b) HSE success adds income and profitability, or c) HSE failure means loss of reputation and therefore legal costs and lost profitability. Many senior managers believe that it is important for their company to be viewed as “green” which translates in management speak as an “environmental friendly company”. In recent years, the environmental cause has merged with safety and health and thus HSE is now generally viewed favourably by most large corporate entities. Many times a corporation will establish a high level position such as VP-HSE, where he/she has responsibility for establishing and overseeing HSE standards and practice for the corporation. This person has the ability to influence senior management through persuasive arguments which justify HSE status being equal to operations.
2. Develop a sound HSE Management System.
A company must have a sound set of HSE standards since an HSE management system serves as the guidepost to what gets done. When developing an HSE Management system, don’t re-invent the wheel. Successful systems may be found among the top Fortune 500 companies. Most will gladly share with you. Start by contacting industry associations such as OGI (Oil & Gas Producers Institute). The ASSE via its web site also has a variety of publications available for purchase which outline successful Safety and HSE Management systems. Upon evaluation you will find that the varied HSE systems contain similar categories and elements although they may be listed and organized differently. This author prefers systems which categorize the HSE requirements by topic. For example, Management leadership, auditing and inspections, contractor management, risk management are all topics (elements) where “expectations” can be attached. An expectation is “what generally is required to be done to meet the general intent of the element”. Usually a list of processes is attached to each expectation. A process is defined as “an activity the company plans and undertakes in order to achieve the expectation”. An example would be: Element – Auditing & Inspections, Expectation – The company will have an HSE auditing & inspection program which identifies hazards and conformance with established procedures as well as proposes corrective actions, Process(es): Annual HSE Audit/Inspection Plan. There may be several processes which implement the same expectation. Many times a single process will apply to more than one expectation. In the example listed, the Annual HSE audit plan (a process) will also affect expectations related to risk management, senior management, contractor management etc.
3. Implement for the long term.
That means setting annual targets for all levels of the organization as well as 5 year goals for the company at large. HSE targets must be rolled into the corporate planning process so that HSE targets are decided in same arena of discussion as are the financial and production targets. Annual HSE plans should be developed which outline the expected goals as well as targets for every level of the organization. The continuity of seeing HSE targets every year along side the production and financial targets sends a vital message that HSE is viewed by senior management in the highest regard.
4. Set fit for purpose HSE targets
I can not emphasize enough the old adage that “what gets measured gets done”. HSE targets must be set which adequately challenge the workforce and supervision. The targets must also be “fit for purpose”, which means the targets must be realistic and are proportional to the industry, level of mechanisation, culture and the over risks involved. If not, the targets may be considered irrelevant and ignored. An example of an irrelevant target might be the requirements for extensive (several sessions) of training for hazards which don’t normally exist in the workplace.
5. Manage “Change”
Most change is resisted within organizations. Change of culture is extremely difficult and will be resisted. The first step to initiating change is having senior management on board both in action and words. The message from the top when presented in a forthright convincing manner directly and immediately affects actions of subordinates. This action by the lower management and supervisor is many times viewed with suspicion by the workforce since they have seen changes which were no more than a “flash in the pan” or as this author has heard many times, “the flavour of the month”. Only through consistent support and reinforcement over time will HSE will taken seriously by the lower rung of supervision and their workforce.
6. Diffuse HSE
Diffusion refers to assigning HSE duties at every level of the organization so that HSE is planned/managed within all realms of responsibility. For example, the senior management team may approve the general HSE plan for the company. They may also have agreed tasks to perform such as reviewing HSE performance during regular board meetings. Individual senior management may even have an occasional HSE site visit listed as part of their annual HSE task plan. Going down the line, each level will review and decide what tasks they would be involved in. For example, an operational manager may conduct HSE meetings with his divisional managers. Again HSE responsibility flows all the way down to the first line supervisor who in reality has the most impact on HSE.
7. Ensure maximum involvement of workforce.
The success of HSE institutionalization is directly proportional to the amount and intensity of the workforce involvement. This may mean use of safety committees, designated safety/HSE reps, and periodic HSE open forum meetings. The more that the workforce has a voice in HSE planning and participation in HSE activities, the easier it will be to institutionalize HSE.
8. Communicate, Communicate
Josef Stalin was attributed as saying “if one tells a lie enough times, people will believe it”. Well this is only partially true. Lies can not “stick” when people can see actions which do not match the words. However, people will believe the message when it is reinforced by the validity of actions which match the words. Without saying, consistency of actions is critical to institutionalization of HSE.
Communication of HSE must be embedded as part of regular briefings to the stakeholders, e.g., shareholders, partners, labor unions, NGOs, government regulator agencies or employee associations. Regular open communication meetings should always include a statement regarding HSE. All management meetings should have as a minimum a summary of HSE progress.
9. Promote Supervisory HSE performance
Programs must be set in place to do this. This author stated earlier in this article that “what gets measured gets done”. Well this again is only partially true. In reality what gets measured and rewarded or punished gets done. Targets, goals, objective are meaningless unless backed up by reward or punishment mechanism. Let a supervisor get by with conducting only 50% of his required inspections with no feed-back from his superiors and soon he will be doing even less with less fervour. The impact on his workers will be more dramatic as they see HSE inspections taking a back seat to production goals. The implication is clear to the workers. However, a supervisor who takes the HSE message to heart should be commended and rewarded. His efforts will most certainly be seen by the workers as a sign that HSE is really important to senior management. Workers understand that the important messages flow from the top and those important and meaningful messages are followed up with actions. This author has seen many instances where senior management was fully engaged and behind HSE but the message never made it to the bottom because some managers failed to reward/punish their subordinates for HSE performance. This means that HR policy must be devised so that supervisors understand that job appraisals, bonuses, future advancement all depend upon good HSE performance and that poor HSE means no rewards or advancement.
10. Base HSE training on risk
Training can not be under estimated as a vital link to HSE success. The training must start at the top. Too often senior management hears of the need of HSE implementation and believes that this is a lower level issue which should not involve much if any of their valuable time. This could not be further from the truth. Senior management must have knowledge of the costs of not having HSE success and the penalty for failure. They must be informed of the positive aspects from the financial to altruistic gains. It is the author’s experience that senior management upon gaining this knowledge, enthusiastically endorse their roles in promoting HSE.
11. Develop HSE behavioural schemes
An underestimated aspect of HSE is that workers do really appreciate and desire rewards for good HSE behaviour. Different industries and different cultures appreciate different rewards. This author has found that some workers like monetary reward, while others prefer recognition amongst their peers. Behavioural scientists note that recognition along with some reward reaps the most advantage. This might include a name and photo on the bulletin board along with a small gift or recognition at a dinner or even a letter from a senior manager sent to an employee’s home.
12. Improvements are realistic.
Even when HSE systems are in place and targets are met or exceeded, new and challenging targets must be set. This does not mean setting unrealistic targets or continuously lowering the bar for HSE performance. It does mean that one should constantly evaluate the “risks” which presently challenge the company. For example, safety and environmental performance may be in the top quartile while health performance has several challenges. New governmental regulations or new advances in science may all present challenges. The best way to develop new targets and objectives is through the quarterly risk evaluation process which many companies do as a matter of routine. This involves groups of managers conducting risk brainstorming sessions where business risks (which include HSE) are plotted on a risk matrix. The risks can be rated as per severity, likelihood to occur, potential affect on the business, and ease to manage. The highest identified risks which are the most difficult to manage are highlighted for extra effort and emphasis.
Any company can institutionalize HSE if they are willing to persevere over time utilizing the advice presented herein. One reason safety/HSE has had such difficulty in meeting corporate targets is that HSE has been generally treated as an added cost or burden with little perceived benefit for the company. This author has seen dramatic improvement in company business/worker compensation losses, as well as improvements in productivity and morale which translated into financial rewards in subsequent years. The first step and critical step toward achieving institutionalization is for someone with authority to become the cheerleader for HSE and take this message to senior management. HSE will not evolve from the bottom up. It always progresses from the top down. A realistic and workable plan must be developed and presented to senior management which illustrates that HSE can not be an overnight success but will take their time and dedication to succeed. This author believes the outline presented in the paper can be a basis for the start toward “institutionalization of HSE”.
ABOUT THE AUTHOR: Ronald G. Hallmark, Owner & director, HSE Solutions, Inc.
Ronald Hallmark is a graduate engineer who has been a successful HSE Manager and Consultant on 4 continents for 35 years. In harsh 3rd world environments, Mr. Hallmark has had remarkable success in turning very poor HSE performers into top quartile performers using the priniciples outlined in this article. Mr. Hallmark presently leads an HSE Consulting firm in North Carolina which has clients throughout the USA and across the globe.
Copyright HSE Solutions, Inc.
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.For specific technical or legal advice on the information provided and related topics, please contact the author.