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 / Winter 2012 / Issue 69(originally published by Booz & Company)


The Thought Leader Interview: William J. O’Rourke

Central to O’Rourke’s beliefs about executive leadership is the importance of unyielding personal and professional adherence to one’s moral and ethical principles. From his perspective, any executive who gives in to immoral, unethical, or illegal behavior, no matter what the pressure to do so, is propagating undisciplined habits, unsavory relationships, and permissive leadership that will ultimately undermine a company’s long-term value.

Bill O’Rourke came to the attention of strategy+business through a talk he gave about his Russian experience at the Carnegie Council for Ethics in International Affairs. In August 2012, we caught up with him at his home outside Pittsburgh. Sitting at a patio table piled high with articles, his course syllabi, and a copy of Clayton M. Christensen’s How Will You Measure Your Life? O’Rourke talked about his three-plus decades with Alcoa, his second career as an ethics management professor, and his views on the sources of a person’s moral grounding.

S+B: What were the conditions of the Samara and Belaya Kalitva plants when you arrived in 2005, as the new head of Alcoa Russia?
The plants weren’t just unsafe; they were a disaster. We took 40,000 tons of steel scrap out in the first four months. They were also huge. The Samara plant alone sits on 388 acres, and has 129 buildings — plus the world’s largest forging press and extrusion press. There was no maintenance. No one was wearing safety equipment. If one of Alcoa’s big manufacturing plants in the United States identifies 10 fatality risks a year, that’s a big deal. These two plants had averaged five fatalities a year for 50 years. The local managers thought that was just a part of doing business.

These behaviors were deeply rooted, but all of us at Alcoa, including Alain Belda, believed they could be changed. Even before we arrived in Russia, we decided to lead cultural change with safety — just as Paul O’Neill had when he took over as CEO in 1987.

We identified 4,000 serious safety risks in the first year. My original plan had been to find the safety problems and prioritize them, but pretty soon, I said, “Stop looking and start fixing.” We distributed safety equipment to everyone and did safety training for everyone, starting with top executives. We brought in seasoned health and safety professionals and auditors from Australia and the United Kingdom. We painted dangerous areas red. At one point I said, “We should paint the whole Samara plant red.”

In 2006, the first full calendar year we owned Samara, there were no fatalities. The Russians will tell you it was luck, but it was hard work. Today, these Russian plants have incident rates below the Alcoa corporate average and have not had a fatality in years.

S+B: It must have taken a lot of training to change behavior.
The Russians are smart people and well educated. Their literacy rate is among the highest in the world, higher than the United States’. It turned out our employees valued some of the education and training programs we offered more than they did the compensation. They recognized if they learned more, they could do more, and they would eventually earn more.

S+B: How did they feel about your investments in safety?
Leading with safety was essential for the performance we expected, but it also sent the right message: that we care about employees. The compliance on safety equipment was impressive. When we gave our Russian employees rules, they followed them. By the third month, about 96 percent were wearing safety glasses. In a plant in Italy, which we bought 15 years ago, they’re still not wearing their safety equipment the way they should.

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