Government Calls For Offshore Safety Culture, But Is Anyone Listening?

deepwater horizon explosionOne of the most valuable things to come out of all of the studies and reports that followed the Deepwater Horizon tragedy was a push for improved safety culture.   It marked a recognition that new regulations, increased training and improvements to technology would only have limited success if the company working offshore couldn’t pull all of those pieces together into one coherent approach.  It is like weaving different strands of yarn together into on piece of fabric. We call that fabric the company safety culture.

In the last month, a group called the National Academy of Sciences, which was tasked by government regulators to study offshore safety culture, came out with its final report.  You can access it here and anyone who cares about offshore safety should read it.

Unfortunately, it received very little attention from the industry, the media or even the government officials who asked for it.   The group made a number of important observations and recommendations, including:

  • Leadership on safety culture is uneven.   Some companies have fostered very strong cultures, but with others, “Leaders who reward productivity but do not consistently recognize safety performance or send intentional or unintentional messages that safety is not a priority, is too expensive, or is an effort made only to comply with regulations create an environment in which a strong safety culture (and safety) cannot be properly maintained or strengthened.”
  • There is no one ‘Offshore Industry.’  A lot of companies with a lot of roles means there is no shared understanding of safety. “Because of their differing safety perspectives and economic interests, offshore oil
    and gas companies do not all belong to a single industry association that speaks with one voice regarding safety. The fragmented nature of the industry, heterogeneity among companies, and diversity among employees make it a challenge to set consistent goals and implement them through industry-wide agreements. “
  • Regulators have a hard time understanding and enforcing culture. Not a knock against the government agencies, but regulators do best when they enforce concrete, quantifiable standards, not squishy softskills.  As the report says, ” One challenge for all regulators is changing the mind-set of inspectors from inspecting for compliance to advocating safety culture. To this end, inspectors’ skill set will need to be developed such that they are able to help offshore companies implement a safety culture philosophy.”

The real problem and the reason why this report may have received so little attention may be that concepts like safety culture are so hard to nail down and so difficult to change.  For starters, every company has a safety culture already.  It is just that some of them are not very good.   For example, a company that believes that accidents happen and there isn’t much you can do about it, just described a really bad safety culture.

Additionally, offshore E&P is largely an engineer’s world and things like safety culture, human factors and behavioral psychology don’t fit very well on a spreadsheet.  It reminds me of a meeting that offshore regulators had with industry representatives some years ago.   The official said, “We will be lenient if the company was making a best-faith effort to comply with the regulations,” to which an oil company engineer asked, “What does the ‘best-faith effort’ form look like?”   Energy industry and regulators alike always take a compliance approach and safety culture doesn’t fit in that box.

The classic definition of a safety culture is one that starts with safety commitment at the top, has open communications throughout the organization and is  constantly looking for ways to improve safety.  But there are plenty of companies where the C-suite doesn’t get involved in deck-level safety but have good records because the front-line workers watch out for each other.  Similarly, we know companies that look like they are doing everything right and have a string of unfortunate incidents.

In my experience, the critical factor is whether the supervisors are committed and how they perceive their role in protecting their crews.  I see them as safety culture “gurus.”  Management needs supervisors and mid-level managers to be the leaders on safety.   When they are doing their jobs right, front-line workers model their behavior.  They are the people who are most likely to recognize hazards on scene and they are the people you need to listen to when a new process is implemented in the company.

The most immediate problem we find in the oil and gas industry right now is the impact of low prices and cuts on safety culture.   I maintain that safety done right does not have to be prohibitively expensive.   But it is perceived as a cost center and so safety programs are vulnerable.   The National Academy report recognizes this threat: “The cyclic nature of the offshore oil and gas industry translates to frequent reductions in experienced staff during downturns and subsequent employment and training of relatively inexperienced workers during upturns.”

One thing is clear, safety culture is not a mathematical formula or a recipe for baking brownies.  Each company is different.  It is like a famous quote from a Supreme Court Justice in an obscenity case.  He said he couldn’t define it, but “I know it when I see it.”


Where is your safety culture?   Does your company send one coherent message on safety to your employees, your customers and government regulators?   If you would like to talk about improving safety culture or identifying proven steps to integrating safety throughout your organization, contact us at info@lifelinestrategies.com.

 

 

Want to keep workers safe and healthy? Start with your supervisors.

Empire State Building workersAccording to a study by Deloitte, American businesses spend $70 billion a year and corporate training is growing by 15% a year.  The question is not whether your company needs to train employees; it is where your investment in training will have the biggest payoff.

The evidence is growing that spending on training for your supervisors and front line managers may be the best investment of your training dollars if you want to increase productivity, improve safety culture and reduce the cost and severity of injuries.  Part of this is just commonsense.  Supervisors spend more time with employees and have more direct impact on shaping attitudes, engagement and culture than any other position within a company.  In companies where new workers learn on the job, supervisors may have the most important role in the company.

Now research from Liberty Mutual Insurance shows that training supervisors in the soft skills of how to communicate with and gain the trust of an injured worker is a significant factor in how long that worker stays off the job and the severity of certain injuries. The study looked at work-related musculoskeletal disorders (WMSDs), such as low back pain and upper extremity disorders.   They found that the supervisor’s interaction with a worker with WMSD had a lot to do with the level of treatment necessary and how long the worker was away from the job.  Now surprisingly, if the supervisor blames the worker for the injury and complains about delays in production or impacts on OSHA recordables, it has a negative impact on the injury.

But the most interesting result of the study was that a short training class for supervisors dramatically improved the outcome of future injuries for employees working under that supervisor.  Training supervisors on how to relate to employees and what to do immediately after an injury helps keep workers and the company bottom line healthier.

In another study, a food service consultant named Alchemy found that when they taught supervisors how to reinforce worker training with corrective observations, the companies involved in the study saw a 26% improvement in safety compliance.   Again, company programs and worker training may be wastes of time and money if supervisors aren’t on board with implementing them.


How are you training your supervisors?  Are you teaching them the skills that are proven to improve safety and production, like communication and responsibility?   Our supervisory and leadership class, Buddy-to-Boss, is designed to help line managers make the career transition to manage crews and represent the company.  Unlike most leadership classes, we can tailor classes to your specific needs and policies.  Contact us at info@lifelinestrategies.com to learn more.

 

Four Things Oilfield Companies Need to Do (But May Not Be) During The Downturn

Rigzone just published a very thoughtful article from a trio of professors from Rice and Kent State University who looked at the impact of cutbacks on the energy sector.  Their basic points are that:

  • In the service sector, people provide the service and,without those people, core business suffers.
  • During the downturn in the 1980s, industry did long-term damage to itself by cutting too many and the wrong people.
  • Industry needs to be smarter about how it engages and retains its employees than it was in the last downturn.

They base their findings on extensive research on long-term shareholder value.  That study showed that “Long-term shareholder value is created only if firms consistently treat both customers and employees well.”

The problem is that many oilfield companies have to balance the need to maintain an effective workforce with the very real financial difficulties they face.  One of the main factors that companies need to weigh is how they address risk and, based on the research outlined in the Rigzone article, there is a substantial risk that a company will not have the human capital to compete in the service sector.

Let me suggest four things that a wise investments, even at a time when companies are trying to save every penny:

  1. Worker Engagement – The research is already very clear that an engaged workforce is one key to increased productivity and profitability for companies.   Employees will disengage if they believe their company’s approach to layoffs is arbitrary or ill-planned.  On the other hand, a shared sense of purpose and the idea that the company, its leaders and its workers are “in this together” can help hold engagement even during the toughest of times.
  2. Safety Culture – No matter how tight budgets get, companies cannot afford the perception that they are taking short-cuts on safety.   It is often said that all companies have a safety culture; it is just that some companies have good safety cultures and others have bad safety cultures.  Nothing creates a bad safety culture faster than the belief by workers that their safety is at risk because the company is in cutback mode.   On the other hand, a culture that is consistent from the C-Suite to the deck plate and shares the belief that the company can get the job done and make sure no one gets hurt has a strong advantage.
  3. Training – True, training is an expense during times of budget cuts, but it is also a cost-effective investment:
    • Training can improve productivity and can reduce incidents, which in turn saves money.
    • It is cheaper to train people for additional responsibilities than to hire new people.
    • Finally, when companies are hiring a lot of people, training entry-level employees can be inefficient because of turnover.  During downturns, more training dollars go into existing experienced workers, making it a more efficient use of the time and money.
  4. Skills and Knowledge Competency – This is the time to develop a system to evaluate workers on their skills and knowledge for a couple of very good reasons:
    • Right now, companies need their best workers and, if layoffs are necessary, they need to identify the least productive workers.   A good system for evaluating workers helps determine who is qualified to perform their job functions and that is very important right now.
    • While we don’t know when the downturn will end, we know it will.  Until then, every new hire is critical.  Once the business cycle returns, we know from history that injuries are likely to increase and productivity is likely to suffer as new hires are brought in.  A solid worker evaluation system helps make sure the right people are hired for the right jobs.

Lifeline Strategies focuses on helping companies keep workers engaged through a positive safety culture and in developing the mix of training, skills and knowledge it takes to meet the demands of the oil and gas industry.  Let us know if we can help your company in any way.

Safety Culture – You Know It When You See It.

One of the most famous quotes to come out of the Supreme Court came when a Justice, asked whether something was or was not obscene, said, “I will know it when I see it.”  

A lot of things are hard to define, including “Safety Culture.”   It is very hard to say what constitutes a “Great Safety Culture,”  but it is clear that actions speak louder than slogans.   When I read this list of best practices by leading companies, by Howard Mavity, Fisher and Phillips law firm, all I could say was, “Wow! He nailed it.”

Here are my five favorites from his list:

  1. Project manager and superintendent bonuses depend on safety performance.
  2. Company and subcontractor incidents are investigated, and then the project team makes a presentation of the findings to management.
  3. “Stop work” award letters from the CEO are given to employees who take action to stop and correct an unsafe activity.
  4. After the first 250 hours of work, new employees are brought back through the process to see how they feel about safety and what the company should do differently in terms of bringing on new employees.
  5. Visit employees at home if they have been injured on the job.

The article lists 40 “best practices.”   A few may not be practical for your company, but all are worth considering.

What do you consider to be markers of a great safety culture?

Safety Culture – How Hard It Can Be

Safety culture is a hot topic in industry.    Google “Safety Culture” and you find 749 million references!   In the offshore oil and gas world, the regulating agency BSEE has made helping to foster safety culture one of its primary goals.

But we always have to remember that creating a safety culture is hard work.   Read this article  from the Harvard Business Review’s blog concerning the efforts of one mining company to change its culture and you can see just how hard it can be.  It included the indefinite shutdown of a South African mine while its safety program was revamped and the retraining of thousands of individuals.

Hopefully no one in the U.S.  oil and gas industry faces those kinds of challenges or has to take such drastic steps.  But we do know it takes a focused, tough-minded effort.   As a term, “safety culture” can be hard to define, but it doesn’t happen without work.   When you talk to companies that have a strong safety culture, they always say it is worth it, but they never say it is easy.

More Predictions – Five Trends To Watch In 2014

Yesterday I posted five predictions  that would drive SEMS in 2014.  There was a lot of interest so I am pulling out the crystal ball again to look at five trends for this year.    Note: a trend is a prediction that you are pretty sure might happen, but you don’t want to bet the ranch on.

So here they are:

  1. Operators continue to exit the Gulf of Mexico – Under SEMS a number of small operators  either sold off their assets or P&A’d their properties.  Some of that is the usual churn that always happens on the shelf, but you get the sense that something else is going on.   Some operators have always treated properties like an ATM – take out money when they can and put money in when they have to.    Some operators have held onto projects that are near the end of their life-span, delaying decommissioning until prices  justify wringing out the last few drops of hydrocarbons.   The compliance costs of SEMS add a new layer of risk and disrupt the economic model.   When BSEE started SEMS, it said there were 130 operators offshore.  In November it said there were 84.   A potential reduction in operators of 45% doesn’t make any sense, but clearly there has been a reduction.   And remember operators are taking out around 10 structures on the shelf for every new one they put in.
  2. Operators pare down their contractor lists – We are hearing from some pretty big operators that they want to scale back on the numbers of contractors they are using, maybe dramatically.   We have heard it before, but this time it has two new drivers.
    • Evaluating contractors under SEMS costs money.  The more contractors you evaluate. the more it costs.   The economies of scale mean it costs about as much to evaluate a small contractor as it does a medium contractor.  So, fewer contractors means cheaper SEMS.
    • Don’t forget that the point of evaluating contractors is to weed out the unsafe players.   As operators determine who “gets” SEMS and who doesn’t, it is only natural that they will lean on the ones that do.
  3. Larger contractors manage subcontractors more closely – See above.   Just because operators cut back on the number of contractors on their vendor lists, doesn’t mean they no longer need those services.   Larger contractors will absorb a lot of that internally, but there will also be a push for them to take a firmer hand in evaluating their subs.   Some of it will shift costs from operators to large contractors.   Some of it will shift liability.  Honestly, some of it is just the offshore pecking order.
  4. Safety culture takes hold – OK, is this a trend or just a wish?   A lot of operators and contractors have very healthy safety cultures, but that is by no means universal.   The push from BSEE in 2013 was to extend that safety culture throughout the industry.   We may see operators take up that call with their contractors this year for a key reason.   In several of the industry’s incidents over the last year or so, operators were blamed for not having enough oversight of their facilities and the contractors who work for them.   A contractor with a strong safety culture may still make mistakes, but they don’t have to be under the customer’s thumb all the time.   A company with a weak safety culture has to be watched constantly.   Who would you rather have work for you?
  5. BAST – In 2013, BSEE release a proposal for the use of Best Available and Safest Technology (BAST) in the development and use of offshore equipment.   BAST would require a life-cycle analysis of critical equipment, with a goal to maintain and replace that equipment before it fails.  Sounds good, but that is a very complex and controversial area, like predicting when your car will bite the dust.   The comment period closed last month and you can read the full record here.    What the final rule looks like is anyone’s guess, but the chances are it will mean a lot of equipment will need to be replaced over the next few years and that becomes yet another trend that affects which operators stay in the Gulf and who they use as contractors.

Oh, and one more thing – the Saints surprise the world by going on to the Superbowl!    Too far out on a limb?