In The Power of Habit, by Charles Duhigg, there’s a fascinating chapter on Paul O’Neill, the former CEO of Alcoa and Secretary of the Treasury. The following are experts from the book.
“I want to talk to you about worker safety,” he said at his opening speech as the new CEO of Alcoa. “I intend to make Alcoa the safest company in America. I intend to go for zero injuries…If you want to understand how Alcoa is doing, you need to look at our workplace safety figures. If we bring our injury rates down, it won’t be because of cheerleading or the nonsense you sometimes hear from other CEOs. It will be because the individuals at this company have agreed to become part of something important. They’ve devoted themselves to creating a habit of excellence. Safety will be an indicator that we’re making progress in changing our habits across the entire institution. That’s how we should be judged.”
“Within a year of O’Neill’s speech, Alcoa’s profits would hit a record high. By the time O’Neill retired in 2000, the company’s annual net income was five times larger than before he arrived, and its market capitalization had risen by $27 billion.”
“All that growth occurred while Alcoa became one of the safest companies in the world. Before O’Neill’s arrival, almost every Alcoa plant had at least one accident per week. Once his safety plan was implemented, some facilities would
go years without a single employee losing a workday due to an accident. The company’s worker injury rate fell to one-twentieth the U.S. average.”
“So how did O’Neill make one of the largest, stodgiest, and most potentially dangerous companies into a profit machine and a bastion of safety? By attacking one habit and then watching the changes ripple through the organization.”
“I knew I had to transform Alcoa. But you can’t order people to change. That’s not how the brain works. So I decided I was going to start by focusing on one thing. If I could start disrupting the habits around one thing, it would spread throughout the entire company.”
Prior to joining, “Alcoa was not a happy family…It was more like the Manson family, but with the addition of molten metal. O’Neill figured his top priority, if he took the job, would have to be something that everybody—unions and executives—could agree was important. He needed a focus that would bring people together, that would give him leverage to change how people worked and communicated.”
“I went to basics. Everyone deserves to leave work as safely as they arrive, right? You shouldn’t be scared that feeding your family is going to kill you. That’s what I decided to focus on: changing everyone’s safety habits.”
“I’m really glad to be here,” O’Neill told a room full of workers…”I’m happy to negotiate with you about anything, but there’s one thing I’m never going to negotiate with you, and that’s safety. I don’t ever want you to say that we haven’t taken every step to make sure people don’t get hurt. If you want to argue with me about that, you’re going to lose.”
“The brilliance of this approach was that no one, of course, wanted to argue with O’Neill about worker safety. Unions had been fighting for better safety rules for years. Managers didn’t want to argue about it, either, since injuries meant lost productivity and low morale.”
“The key to protecting Alcoa employees, O’Neill believed, was understanding why injuries happened in the first place. And to understand why injuries happened, you had to study how the manufacturing process was going wrong. To understand how things were going wrong, you had to bring in people who could educate workers about quality control and the most efficient work processes, so that it would be easier to do everything right, since correct work is also safer work.”
“O’Neill’s safety plan…Any time someone was injured, the unit president had to report it to O’Neill within twenty-four hours and present a plan for making sure the injury never happened again. And there was a reward: The only people who got promoted were those who embraced the system.”
“Unit presidents were busy people. To contact O’Neill within twenty-four hours of an injury, they needed to hear about an accident from their vice presidents as soon as it happened. So vice presidents needed to be in constant communication with floor managers. And floor managers need to get workers to raise warnings as they saw a problem and keep a list of suggestions nearby, so that when the vice president asked for a plan, there was an idea box already full of possibilities.”
“As Alcoa’s safety patterns shifted, other aspects of the company started changing with startling speed, as well. Rules that unions had spent decades opposing—such as measuring the productivity of individual workers—were suddenly embraced, because such measurements helped everyone figure out when part of the manufacturing process was getting out of whack, posing a safety risk.”
“O’Neill never promised that his focus on worker safety would increase Alcoa’s profits. However, as his new routines moved through the organization, costs came down, quality went up, and productivity skyrocketed.”
