strategy+business is published by PwC Strategy& Inc.
 
or, sign in with:
strategy and business
Published: March 31, 2014

 
 

Zero Injuries, Waste, and Harm

How AkzoNobel NV, a leading manufacturer, is making its health, safety, and environment procedures stronger by making them more consistent.

When my company, AkzoNobel, set out to standardize its approach to safety in 2008 after a large acquisition, it was at a disadvantage compared to many of its competitors. AkzoNobel, which manufactures paints, coatings, and specialty chemicals, is a large organization with about 50,000 employees. We’re certainly not alone among chemical companies in having far-flung manufacturing assets. But the 200-plus plants we had were unusually fragmented: Many of them had come to us via acquisition, often one or two at a time. When you add assets in this manner, it’s pretty common to end up in the situation we were in—for example, a Brazilian plant that made emulsion paint might have one set of safety policies, a Chinese plant making epoxies might have a second, and a Swedish plant making calcium chloride might have a third. All three safety approaches could be effective, but the fact that they weren’t standardized made it hard for AkzoNobel, which is headquartered in Amsterdam, to gauge results or make systematic improvements. The fact that we had these three distinct lines of business was another complicating factor.

It isn’t easy to ask several hundred line managers who have grown accustomed to doing things their own way to adopt a uniform set of practices. In 2008, when we told the people in charge of our manufacturing plants that we would be moving to a common safety approach—and that this transition would involve annual safety self-assessments, comprehensive audits, and the publication of each plant’s safety “rating”—the response was predictable: The plant managers weren’t happy. In retrospect, there were probably a few things we could have done differently to sell the idea. Our approach had basically consisted of throwing people into the deep end and telling them to start swimming. But the important thing was getting the company organized around a more coherent approach. That’s what we did, and we’re becoming a better company for it.

Safety—or health, safety, and environment (HSE), to use the more formal terminology—has become an increasingly visible part of the corporate agenda over the past 20 years. A lot of industrial companies that have historically been at risk of workplace incidents or environmental damage now set public goals of zero injuries and no environmental harm. We aspire to these goals, too (and to a third goal, no waste). But we think we’re different because of the systematic ways we’re pursuing these objectives. When we began the process, our high degree of fragmentation made the problem seem especially challenging. But paradoxically, we think such a difficult starting point will propel us to a position of industry-leading safety over time, and help us achieve better financial performance along the way. Our diversity can also be a strength.

Why did AkzoNobel’s plant managers initially have such a visceral reaction to the changes we were making? To start with, it was one hell of a lot of work.

Why such a visceral reaction to the change? To start with, it was a hell of a lot of work.

The self-assessment documents that are at the heart of our HSE improvement efforts have 400 questions and take, on average, more than three days to complete. The categories include leadership involvement in risk management, security of people and assets, and site environmental impact. The section on emergency response and crisis management, for instance, has 19 statements, including “Emergencies and crises are handled as each occurrence requires” and “Emergency procedures are exercised with local authorities via joint drills regularly.” The answers (yes, no, or not applicable) become part of an overall safety maturity score for the plant that ranges from 0 to 10. The answers also help identify any safety gaps at the plant and inform an improvement plan. As of late 2013, the average plant at AkzoNobel had a safety maturity score of 6.4. Our goal, which has the enthusiastic backing of our CEO, Ton Büchner, is to get every plant above a score of 8 and to be in the top quartile within our industry by 2015.

 
 
 
 
Close
Sign up to receive s+b newsletters and get a FREE Strategy eBook

You will initially receive up to two newsletters/week. You can unsubscribe from any newsletter by using the link found in each newsletter.

Close