The Bottom Line Impact of Health and Safety Training

On a blustery October day in 1987, a herd of prominent Wall Street investors and stock analysts gathered in the ballroom of a posh Manhattan hotel. They were there to meet the new CEO of the Aluminum Company of America — or Alcoa, as it was known — a corporation that, for nearly a century, had manufactured everything from the foil that wraps Hershey’s Kisses and the metal in Coca Cola cans to the bolts that hold satellites together.

A few minutes before noon, the new chief executive, Paul O’Neill, took the stage. He looked dignified, solid, confident. Like a chief executive.

Then he opened his mouth.

“I want to talk to you about worker safety,” he said. “Every year, numerous Alcoa workers are injured so badly that they miss a day of work. I intend to make Alcoa the safest company in America. I intend to go for zero injuries.”

The audience was confused. Usually, new CEOs talked about profit margins, new markets and ‘synergy’ or ‘co-opetition.’ But O’Neill hadn’t said anything about profits. He didn’t mention any business buzzwords.

Eventually, someone raised a hand and asked about inventories in the aerospace division. Another asked about the company’s capital ratios.

“I’m not certain you heard me,” O’Neill said. “If you want to understand how Alcoa is doing, you need to look at our workplace safety figures.” Profits, he said, didn’t matter as much as safety.

The investors in the room almost stampeded out the doors when the presentation ended. One jogged to the lobby, found a pay phone, and called his 20 largest clients.

“I said, ‘The board put a crazy hippie in charge and he’s going to kill the company,'” that investor told me. “I ordered them to sell their stock immediately, before everyone else in the room started calling their clients and telling them the same thing.

Within a year of O’Neill’s speech, Alcoa’s profits would hit a record high. By the time O’Neill retired in 2000 to become Treasury Secretary, the company’s annual net income was five times larger than before he arrived, and its market capitalization had risen by $27 billion. Someone who invested a million dollars in Alcoa on the day O’Neill was hired would have earned another million dollars in dividends while he headed the company, and the value of their stock would be five times bigger when he left.

What’s more, all that growth occurred while Alcoa became one of the safest companies in the world.

Duhigg wrote about O’Neill in the context of focusing on one key habit, in this case worker safety, and how changing that one thing had a powerful and profound impact on an entire company’s culture.

Safety in Health Care

In an extensive interview with the Post-Gazette, O’Neill, who left Alcoa in 2000, describes his work on health care reform, and in particular, on improving safety for health care workers and patients.

“It’s been a frustrating experience.”

O’Neill was involved in one of the earliest experiments on reducing bloodstream infections, at Allegheny General Hospital. In a 2006 study published in the Joint Commission Journal on Quality and Patient Safety, he, and a hospital group led by Richard Shannon, showed that a team-based approach to analyzing and reducing bloodstream infections in an AGH intensive care unit lowered infections from 49 to 6 in a year, and cut deaths from 19 to 1.
Such dramatic improvements occurred in the three intensive care units at Allegheny General overseen by Dr. Shannon, O’Neill said.

“But then, we couldn’t even get the then-president of the hospital to adopt practices in the other ICUs that we had proven could save lives. It’s showed me that it’s really hard to get good, scientifically proven ideas through plasterboard walls.”

One major problem with patient safety initiatives in American hospitals, he said, is that “they are projects; they are not efforts to create an organizational culture. Most projects will create incredible results for a short period of time, but there’s a wasting away back toward normal because the changes don’t belong to the culture, they belong to a project.”

O’Neill’s story isn’t just about changing habits, it’s also about leadership, and how change – true and lasting change – occurs when leaders become committed to an ideal.

Changing Organizational Culture

Improving safety in a company may require a major cultural shift.

Culture influences everything: how an organization identifies and solves business problems, recovers from failures, and thrives in times of success. It serves as a guiding force for employee behavior, shaping mindsets, attitude, and effort.

Safety Is Not a Trade-off

Safety is often viewed as a competing interest in an organization. “Do you want to be safe, or do you want to make money?”

But is there really a trade off between saving money and saving lives?