Tips for Talking Safety to the CEO
What do you do if your organization's CEO questions the return on investment of safety and health programs? How would you negotiate safety programs into your organization's long-term business plan?
These questions were asked of safety managers gathered at the American Society of Safety Engineer's conference, The Business of Safety: A Matter of Success held in Baltimore March 13 and 14. The overall theme of the conference explored ways to help safety professionals enhance communication with management and secure a seat at the financial and strategic planning table.
Following are several gems of insight from attendees and presenters at the conference to answer those two questions.
Be strategic-minded. Be strategic-minded and professional in all dealings with the organization's executives; they generally do not like emotional responses to their questions or inquiries, according to Michael Behm, PhD, CSP. Be prepared to present current costs and benefits with projections that show the outcome of a "keep everything as it is" scenario, and the costs/benefits of one or more alternative plans with projected outcomes. Include your recommendation and the justification (e.g., documentation, calculations, expert support) for your proposal.
Ask for help. Tap resources within your own organization for help preparing your proposals in the format and business language preferred by the executive team. If they prefer spreadsheets and charts for interpreting financial information, learn to use spreadsheets and charts to present proposals.
Be clear when discussing financial values and when discussing intangible values. Make it clear when you are discussing monetary or financial cost/benefits and when you are addressing non-financial or less tangible values like company reputation, employee morale, or ethical considerations.
Stress productivity and efficiency gains from safety. Highlight examples where safety programs yield improved worker productivity or greater efficiency, according to Stuart Wood, and independent safety and health consultant. For example, a container company saw a 20 percent increase in the number of boxes produced per day on an assembly line after an ergonomics consultant recommended operational changes to eliminate repetitive arm and shoulder injuries. In such cases, efficiency improvements can justify a return-on-investment when the usual cost/benefit numbers don't add up.
Do not just rely on cost avoidance. Avoid using "soft numbers" to make a business case, added Mr. Wood. An example of a soft number is cost avoidance. Making a case for saving money on the basis of costs incurred in the past that is not on the books for future projections won't help. For example, don't try to project a reduction in worker's compensation premiums from the year before if your safety proposal is adopted. Just one or two low-probability injuries can drive up premiums, but it is extremely difficult to make a valid case that the same injuries will occur next year if your safety proposal is not adopted. Instead of relying on cost avoidance, try first to make the case for revenue generation or profit through efficiency.
"No" is not the final answer. "No" does not mean "no forever," and often means "no" only in the context under which the request for resources was made, according to Patricia Kagerer, CSP, ARM. For example, Ms. Kagerer initially presented her case to a company CFO for a worker wellness program but was turned down. She went back to the CFO with information about how a wellness program could reduce the company's health insurance premium rates. This time she got approval for the wellness program.
Be honest. Don't try to make a return-on-investment case if the financial data is not supporting it. It is extremely difficult to restore credibility in your case if you can't reasonably justify or document your findings. When financial returns can't be demonstrated, present the case for gains in "hidden" values such as company reputation, employee morale, or reduced compliance risk.
Track proactive and reactive measures of safety. Track and measure proactive measures of safety as well as reactive measures if you aren't already doing so, says Dan O'Brien, CSP. Reactive measures such as lost-workday rates are critical to track, but they show what happened in the past and do not reliably show present conditions. Proactive measures such as employee training, management commitment, and employee-management communications can be evaluated using a standardized, internal scoring system.
These questions were asked of safety managers gathered at the American Society of Safety Engineer's conference, The Business of Safety: A Matter of Success held in Baltimore March 13 and 14. The overall theme of the conference explored ways to help safety professionals enhance communication with management and secure a seat at the financial and strategic planning table.
Following are several gems of insight from attendees and presenters at the conference to answer those two questions.
Be strategic-minded. Be strategic-minded and professional in all dealings with the organization's executives; they generally do not like emotional responses to their questions or inquiries, according to Michael Behm, PhD, CSP. Be prepared to present current costs and benefits with projections that show the outcome of a "keep everything as it is" scenario, and the costs/benefits of one or more alternative plans with projected outcomes. Include your recommendation and the justification (e.g., documentation, calculations, expert support) for your proposal.
Ask for help. Tap resources within your own organization for help preparing your proposals in the format and business language preferred by the executive team. If they prefer spreadsheets and charts for interpreting financial information, learn to use spreadsheets and charts to present proposals.
Be clear when discussing financial values and when discussing intangible values. Make it clear when you are discussing monetary or financial cost/benefits and when you are addressing non-financial or less tangible values like company reputation, employee morale, or ethical considerations.
Stress productivity and efficiency gains from safety. Highlight examples where safety programs yield improved worker productivity or greater efficiency, according to Stuart Wood, and independent safety and health consultant. For example, a container company saw a 20 percent increase in the number of boxes produced per day on an assembly line after an ergonomics consultant recommended operational changes to eliminate repetitive arm and shoulder injuries. In such cases, efficiency improvements can justify a return-on-investment when the usual cost/benefit numbers don't add up.
Do not just rely on cost avoidance. Avoid using "soft numbers" to make a business case, added Mr. Wood. An example of a soft number is cost avoidance. Making a case for saving money on the basis of costs incurred in the past that is not on the books for future projections won't help. For example, don't try to project a reduction in worker's compensation premiums from the year before if your safety proposal is adopted. Just one or two low-probability injuries can drive up premiums, but it is extremely difficult to make a valid case that the same injuries will occur next year if your safety proposal is not adopted. Instead of relying on cost avoidance, try first to make the case for revenue generation or profit through efficiency.
"No" is not the final answer. "No" does not mean "no forever," and often means "no" only in the context under which the request for resources was made, according to Patricia Kagerer, CSP, ARM. For example, Ms. Kagerer initially presented her case to a company CFO for a worker wellness program but was turned down. She went back to the CFO with information about how a wellness program could reduce the company's health insurance premium rates. This time she got approval for the wellness program.
Be honest. Don't try to make a return-on-investment case if the financial data is not supporting it. It is extremely difficult to restore credibility in your case if you can't reasonably justify or document your findings. When financial returns can't be demonstrated, present the case for gains in "hidden" values such as company reputation, employee morale, or reduced compliance risk.
Track proactive and reactive measures of safety. Track and measure proactive measures of safety as well as reactive measures if you aren't already doing so, says Dan O'Brien, CSP. Reactive measures such as lost-workday rates are critical to track, but they show what happened in the past and do not reliably show present conditions. Proactive measures such as employee training, management commitment, and employee-management communications can be evaluated using a standardized, internal scoring system.
posted by Ergonomic Partners @ 12:11 PM
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