• Is it unrealistic to be good at Safety & Profit ?

    Research: Unrealistic to be good at Safety & Profit at same time

    Is it unrealistic to be good at Safety & Profit at same time? Why do big organizations repeat big safety mistakes? Researchers think they know why.

    The study by the McCombs School of Business at The University of Texas at Austin focused on why large organizations such as NASA and BP have a tendency to make the same mistakes again and again, sometimes with disastrous outcomes.

    NASA’s space shuttle Challenger exploded shortly after take-off on Jan. 28, 1986, killing seven crew. On Feb. 1, 2003, the shuttle Columbia broke up while re-entering Earth’s atmosphere, killing seven crew.

    An explosion at BP’s Texas City, TX, refinery on March 23, 2005, killed 15 workers. On April 20, 2010, the explosion at the Deepwater Horizon rig killed 11 workers.

    Previous research implied that companies either learn from their mistakes or don’t. But this new research says organizations go through cycles of learning and forgetting, something the authors call “organizational oscillation.”

    After a company has just experienced a disaster or serious error, the firms are pushed toward a focus on safety that pulls them away from other priorities such as efficiency or innovation. This is a period of safety learning. Over time, the safety focus weakens, allowing other focus areas to come to the forefront. That in turn leads to safety errors, with the possibility that a serious one may occur again. That is a period of safety forgetting.

    Organizations can’t operate with their attention focused equally on both safety and non-safety objectives, according to study author Francisco Polidoro, an associate professors of the McCombs School. Safety and profitability aren’t mutually exclusive, but they do compete, according to Polidoro.

    “What we have found is that organizations manage these conflicting goals by oscillating between them,” said Polidoro. “One isn’t necessarily better than the other, but there has to be a compromise.”

    Previous research said companies can be equally good at two competing goals, but this research suggests that’s an unrealistic scenario.

    The researchers examined 146 pharmaceutical companies and found 33% experienced a serious drug error during an eight-year period. Following the serious error, drug companies react by significantly reducing patent applications (innovation) while increasing drug testing and scientific articles connected to new clinical trials (safety).

    Over time, however, the caution and investigation into potential problems declines, according to the new research.

    Pressures from external forces such as employee turnover, complacency (ex. an extended period of no serious errors), changes in organizational culture, investor tension and new executive leadership cause companies to fluctuate between learning and forgetting.

    On the other hand, other factors, such as the media, lobbyist groups and governmental agencies, push companies toward accountability.

    How can companies counter this tendency? Polidoro says they need to make safety more prominent in organizational decisions. Also, just being aware of the tendency to forget can help sustain focus on safety.

    That seems to correspond with advice that some companies already heed when it comes to addressing safety. Example: How do you make sure employees always wear their safety goggles? First of all, stop calling them “safety” goggles – they’re just goggles, a tool that’s required to get a job done just like a hammer or ladder.

    That might seem like nothing but semantics, and if it’s all a company did, that would be the case.

    But there’s a bigger point: Just as you would integrate goggles into the process for doing a particular task, safety needs to be integrated into business in a more seamless way. Safety isn’t separate from innovation, productivity and profits. It’s part of doing good, profitable business.

    The study was published in the journal Organizational Science.

    What do you think about this research? What has your company done to integrate safety into regular business practices? Let us know in the comments.

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    Posted on: February 16th, 2016 by IE Safety Services