January 2017

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Viewpoint: Leadership commitment for safety and sustainability

Management commitment is an essential ingredient for building a healthy organizational safety culture. To achieve this objective, management must provide adequate resources, along with unstinted support and direction.

Dutta, H., Gupta, L. K., Maji, S., Essar Oil Ltd.

Management commitment is an essential ingredient for building a healthy organizational safety culture. To achieve this objective, management must provide adequate resources, along with unstinted support and direction. Any mismatch between what we say and what we do may result in mistrust among employees, which can lead to an environment that is not conducive to spontaneity. Although it is said that leadership should be visible, leadership commitment must be so deep that it almost becomes invisible. Employees should not have any doubt about management’s sincerity and genuine commitment, as reflected by its actions.

Organizations are also conscious that the impact of any catastrophic process safety incident would compel management to commit to safety to defend its absolute business interests and protect the company’s image. However, attributing safety breaches to human error only, and taking punitive action(s) as a result, are detrimental to creating a healthy climate.

The following are seven steps that will help in creating a reliable, safe and sustainable climate that is conducive to achieving business excellence.

Step 1: Short-term objectives vs. long-term vision, mission and goals

Business sustainability cannot be achieved unless the focus is on long-term goals. Short-term measures may be beneficial, but are not sustainable in the long run. For a business to prosper and leave its imprint on society, paramount attention must be paid to realizing the company’s vision. This can be achieved, provided the organization’s vision is shared and understood by all of its employees. Only engaged employees can attain the superordinate goals of the organization. The real challenge is how to engage the employees. This is possible, provided that they are included in the decision-making process, and that their ideas and views are heard and translated into action. This engagement motivates employees, which creates a culture of whole-hearted participation.

Essar Oil & Gas Ltd. (EOL) is committed to fulfilling its vision through the active involvement of its employees and all stakeholders. The results are encouraging: EOL has consistently maintained its performance in terms of realizing respectable gross refining margins. This accomplishment was possible due to uninterrupted and safe operations at the company’s Vadinar refinery, and the contributions made by every employee.

Step 2: Challenging the status quo and future orientation

Traditional leaders are comfortable working within established goals and organizational boundaries. Progressive leaders continuously challenge the status quo, which requires courage and conviction, and demands continuous learning, relearning and an adaptability to change. These leaders look for opportunities to excel.

EOL set a challenging target of setting up and safely commissioning 5,000 additional retail outlets by the end of 2016. This exciting task required constant innovation and out-of-the-box thinking. To achieve this ambitious goal, EOL moved away from an individualistic approach to an institutional approach. Reaching this goal enabled EOL to achieve sustainable results.

Step 3: Production at what cost?

Smooth, reliable and uninterrupted operations must be the greatest concern of leaders, rather than focusing only on capacity utilization. Productivity is more significant than production. No plant or piece of machinery breaks down without a warning signal. It is paramount that such signals are not ignored; nor should equipment be unnecessarily stretched or operated beyond the safe operating envelope. Equipment should not be denied maintenance or inspection for the sake of achieving set targets. For example, an operator must not allow a process heater to operate with a high metal (skin) temperature of its tubes solely to meet the target throughput.

To illustrate these points, EOL completed annual maintenance of its Vadinar refinery as scheduled, in lieu of completing the project ahead of schedule. EOL did not deny the plant or machinery its health checkup. With the sustained effort of all employees and contract workers, the plant’s maintenance was completed two days early, without any incidents.

Most unsafe acts in the oil and gas industry are attributed to the disregard for existing systems and procedures. In India, nearly 75% of unsafe acts or incidents could have been prevented if adequate adherence was paid to the fulfillment of standard operating procedures (SOPs). Violations of SOPs and work permit systems create more hazards than anything else; these are the unfortunate signs of over-confidence. Companies must constantly update and revisit SOPs with employees, and leadership must watch for signs of complacency. If complacent behavior or communication is detected, managers must arrest it and take corrective action to remove it. Complacency is the number-one enemy of leadership for any organization.

Step 4: Safety is an investment. Do we consider safety a cost or an investment?

It is, of course, an investment. Effective leaders must prioritize long-term process safety over short-term budget restrictions and profitability. At this crucial juncture, when industry is confronted with unprecedented economic recession, consumer spending is heading southward, and inflation rates are increasing the cost-cutting measures in all enterprises. During these periods, budget cuts in safety become the first target. This junction is a testing time for leaders.

EOL prioritizes committing budgets that improve reliability and safety, which are two sides of the same coin. Can uninterrupted and reliable operations be achieved without safety?

Step 5: Create a culture of transparency

Leaders must encourage the reporting of all near-miss incidents. Near-miss incidents provide great teaching moments, and the findings should be shared with all operating and maintenance personnel. A culture of judicious reporting denies plant personnel the opportunity to learn and, instead, encourages them to hide or suppress facts.

Barriers to the reporting of bad news must be actively removed, and an open culture for communicating process safety issues should be promoted. An additional step could be to advocate rewarding the bearer of the bad news.

Ascribing only human error for an uneventful incident is counter-productive, as well. Systems are operated and maintained by human beings, so it is enticing to attribute any failure to human error. Conversely, failures are seldom attributed to poor leadership. The practice of blaming individuals is not only detrimental to improving the system, but it obliterates employee morale. The desirable effect is to develop a culture of openness, where employees can come forward and share undesirable events without the fear of punitive measures. Incident investigations are undertaken to discover root causes and determine an action plan to prevent a recurrence, and not to blame individuals for the failures.

This creates an organizational culture that fosters openness and transparency, and will enable a company to achieve safety and sustainability.

Step 6: Developing and sustaining a safety culture

A safety culture relies on the attitudes and behaviors of employees. Cultural changes are slow and involve long-term, coherent, consistent and sincere efforts. Unless efforts are properly resourced, plans are prioritized and clarity of expectations from employees and contractors are provided, the chances of success are limited. However, we should guard ourselves against initiative overload.

Belief is deep-seated in our minds, and is not dependent of knowledge, proof or rationale. Often, the mind simply accepts belief as truth because of past conditioning. When knowledge confronts belief, we behave from the standpoint of belief rather than knowledge. It is easier to claim than to believe that all accidents are preventable. Changing belief, or introducing a new belief, requires tremendous effort. Creating a safety culture requires management’s total commitment, openness, transparency and sincerity. Effective communication, frequent conversations with employees, openness and an investment of management’s time go a long way to developing a healthy relationship. This maintains a company’s focus and awareness of safety issues, and sustains a high standard safety culture.

The mantra for success in today’s complex business environment is, “Listen to the plant and listen to the people.” This has become a necessity: the days of reciting instructions are gone; giving monologues discourages participation; and the absence of participation leads to a silo mentality.

Direct communication between employees and senior-level managers, along with regular shop floor-level meetings, facilitate problem-solving and employee participation. Traditional leaders discourage discussions to avoid responding to uncomfortable questions, which does great harm to the organization. All of these efforts are justified, as process safety failures result in loss of life, property, destruction of environment and loss of image.

Step 7: Paradigm shift in leadership

Finally, a shift in leadership style is essential to ensure sustainability. TABLE 1 provides the differences between a traditional and a progressive style of leadership. The progressive style focuses on an all-inclusive approach rather than overdependence on individuals. It requires courage and conviction on the part of leadership to challenge the traditional approach of prioritizing short-term gains over long-term sustainable benefits. Progressive leaders accept failures, learn from mistakes and then move on, investing in the most precious resource—time—to preserve constant focuses on safety, reliability and sustainability.

Sustainability

Sustainability is a key business driver, and is becoming more important for all businesses. Apart from the issues related to climate change, innovations in sustainability are changing the way we live. These include creating low-cost homes from innovative materials that are healthy to live in and use less energy to keep warm/cool, as well as developing better solar panels and producing biodiesel from algae. Solar electricity is gearing up to compete with fossil fuel-based electricity generation. India is now producing approximately 8,600 MW of solar power; this volume will eventually rise to 100,000 MW by 2022. EOL is planning to install 20 MW of solar power and 50 MW of wind power generation facilities inside the Vadinar refinery.

The issues outlined above are some of the small, yet firm, steps that can be taken to achieve excellence. The encouraging consequences reinforce the commitment for all-inclusive development. The positives that are experienced, coupled with the quest to achieve safety and sustainability, will help renew an organization’s vigor to ensure reliable, safe and uninterrupted operations with active employee engagement. HP

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