Performance Measurement Taking Control of What Lies Ahead

1. American Society of Safety Engineers Measuring Safety Performance Symposium Performance MeasurementTaking Control of What Lies Ahead Dr. Harold S. Resnick Work Systems Associates, Inc. November, 2011

2. Learning From Personal Experience • 1987 – Hydrocarbons Plant in India • Four fatalities – lack of following procedures • 2004 – Major Highway, Houston, Texas • Serious accident – cell phone distraction • 2011 – Barge off the Coast of Alaska • Near miss caused by inattention

3. Measurement - Leading Indicators

4. The Importance of Measurement Measurement is your most powerful feedback and control tool

5. Without measurement there is No Feedback . . . . . . Therefore no course corrections No Accountability . . . . . . Therefore no change No Objective Analysis . . . . . . Therefore no improvement The Need for Measurement

6. Quotes About Measurement • “People Respect What you Inspect” • “What Gets Measured Gets Done” • “Tell Me How You Are Going To Measure Me and I’ll Tell You How I’m Going to Behave”

7. Why Do We Care About Leading Indicators

8. Why Leading Indicators Matter • Mankind has always been concerned about the future • We want to understand what is likely to happen • What we can do to prepare for it • What we can do to either mitigate, prevent or take advantage of it • We have used many tools over our history to find the leading indicators that portend what is most likely to happen • Prophets, seers and fortune tellers • Astrology • Crystal balls and Tarot Cards • And the ubiquitous Ouija Board

9. Leading Indicators in Our Personal Lives • We rely on leading indicators to help guide us in our personal lives • Leading indicators that help us make decisions about what we think will happen in the economy • Measures of consumer confidence • Housing starts • Stock market movement • Unemployment levels • Import/export trade balances

10. Leading Indicators in Our Personal Lives • Leading indicators about whether and how to invest in the stock market • The stock market itself is a projection of what people believe will happen over the next nine months • Quarterly earnings reports • Macro world events • Measures of consumer confidence • Unemployment trends • Behavior of politicians and legislative action

11. Leading Indicators in Our Personal Lives • Leading indicators about whether your kids are going to get into the college of their choice • Grades in school • Sports talent and activities • Extra-curricular activities • Special talents they may have • Ethnicity balance • Geographic diversity • And of course whether you are an alumnus and how much you donate to your Alma Mater

12. Auto Insurance Companies Use Leading Indicators • Whether you get auto insurance and how much you pay is based on the leading indicators of how likely you are to get in an accident or how likely your car is to be stolen. • The leading indicators include: • Gender • Age • Where you live • Type and color of the car you drive • History of traffic violations • Additional indicators that predict accidents include: • Cell phone or text usage while driving • Your emotional state – especially anger or a great sense of urgency

13. Common Business Leading Indicators • Sales • Number of sales calls made – by phone or in person • Number of appointments with qualified buyers • Number of proposals submitted • Marketing • Response to “bingo cards” placed in magazines • Number of unsolicited inquiries • Responses to advertisements • Internet activity • Number of site visits – time on site – number of pages viewed • Number of clicks (pay for click advertising) • Site hot spots

14. More Business Leading Indicators • Finance • Spending rates over time • Revenue projections • Cost of money – interest rates • Currency exchange rates • Manufacturing inventory levels • Seasonality • Weather conditions • Sales activity and sales projections • Large projects – schedule and budget • Progress to date • Progress along the critical path • Staffing levels and staffing availability • Spend rates • Vendor lead times

15. Types of Leading Indicators • Leading indicators are the things that we can observe and then measure in some fashion to help us predict the likelihood of future events • Leading indicators can be developed against three categories: • Attitudes/values/feelings – and how they are manifested in words and behavior • Behaviors – as demonstrated through activities that people do or do not do • Events

16. Key Leading Indicator Measurement Questions • What leading indicators should you measure? • How will you measure it? • What will you and your organization do with what these leading indicators tell you? • How do you create a culture that supports these measures?

17. Vital Behaviors – A Leading Indicator Tool “Influencer” - Patterson, Grenny, Maxfield, McMillan, Switzler - 2008

18. Behaviors As Leading Indicators • Leading indicators measure BEHAVIORS • Are we doing the right things to prevent or avoid safety issues • What positive actions are we taking • Vital behaviors are those behaviors that we believe will drive the desired outcome or result – in our case, driving the organization to a safety record with zero accidents or incidents

19. Principles of Vital Behaviors • Principle 1 – Search for strategies that focus on specific behaviors • Principle 2 – Discover a few high leverage vital behaviors and focus on those • Principle 3 – Identify recovery behaviors to bring people back on track when things do not go well

20. Vital Behavior Real Life Examples • The goal – lose weight • #1 – Put exercise equipment in your house and use it • at least four times a week • #2 – Weigh yourself on the scale every day • #3 – Eat breakfast every day • The goal – improve student learning performance through more effective teaching • #1 – Praise and reward positive performance much more than criticize or punish failure • #2 - Rapidly alternate between teaching and questioning or testing for understanding • #3 - Change the method when the teaching isn’t working

21. More Real Life Examples • The goal – Improve the health and longevity of diabetics • #1 - Test your blood at least four times a day • #2 – Adjust your insulin accordingly • The goal – improve customer satisfaction in hospitals by health care professionals • #1 – Smile • #2 – Maintain eye contact • #3 – Identify yourself • #4 – Tell people what you are doing • #5 – End every interaction with the question: “Is there anything else that you need?”

22. Hoe to Identify Vital Behaviors • Study what people do and identify best practices • Best conducted through defined research • Second alternative – look for positive deviance • Who seems to get better results than others – top performance • What do these people do that is different from what others do? • This is the positive deviance that becomes the identified vital behaviors

23. How People Change Their Minds • Verbal persuasion very rarely works – although it is the most commonly used tool • The best path – personal experience • By trying something and discovering that they CAN do it AND it is WORTH IT, people will change their minds • If personal experience is not possible then create a surrogate for the real experience – opt for a field trip • Third path – create a vicarious experience – see others doing it successfully • This is vicarious role modeling • Use real stories to change people’s minds • Create vicarious experiences through mental models that people can picture in their own minds and identify as something possible for themselves

24. The Six Sources Of Influence Motivation Ability Make the Undesirable Desirable Surpass Your Limits Personal Harness Peer Pressure Find Strength In Numbers Social Design Rewards and Demand Accountability Change the Environment Structural

25. The following two success stories reveal many of the Vital Behaviors - or Key Activities - that are excellent examples of safety leading indicators

26. Success Story #1 Crowley Maritime

27. The Journey to Zero • Got culture? • The journey to zero • API Pipeline Conference presentation • April, 2011 • Charles Nalen • VP Valdez, Alaska operations • Crowley Marine Services, Inc.

28. The Crowley Safety Vital Behaviors • Follow Procedures • Speak Up • Stay Engaged

29. The Crowley journey to Zero Map Incident-Free Performance Accountability & Enforcement Performance Metrics Leadership & Oversight Performance Assurance Build an Incident-Free Culture Stewardship Empowerment Culture of Safety Influence Vital Behaviors • Drive Process Excellence Audits, Assessments & Continual Improvement Processes Safety Management System Operational Excellence & Loss Prevention Process documentation Establish Performance Goals, Objectives and Targets Alyeska Pipeline Services Co . Stakeholders Crowley Expectations

30. Expectations Safety• Puts safety first in all activities• Safeguards the environment• Recognizes and corrects potential hazards Alyeska’s Environmental ProgramOur mission is to provide high quality customer service, environmental direction and leadership so that Alyeska Pipeline Service Company complies with environmental laws and regulations and proactively minimizes environmental impacts. Crowley Goals No Harm to People No Accidents No Damage to the Environment

31. Management System Framework

32. Skill Training

33. Culture of Safety

34. Vital Behaviors for Zero Incidents

35. Influencer* • People will attempt to change their behavior if …… • They believe it will be worth it (motivation) • They can do what is required (ability) • Influencer, The Power to Change Anything • Vital Smarts, LLC 2008

36. 6 Sources of Influence

37. Measuring Performance

38. Results First Quarter 2011

39. Celebrating Excellence

40. Success Story #2 EnergX

41. Introduction to EnergX Safety Culture • Founded in 1997 • Service-Disabled, Veteran-Owned Small Business (SDVOSB) • Offices in Oak Ridge, • Richland and Denver • $30M Annual Revenue • More than 40 Clients • DOE “L” and “Q” Cleared • Personnel

42. EnergX “Do Work Safely” Fundamentals • Top management commitment • Visible, strong support at highest levels • Constancy of purpose • Clearly communicated expectation of zero injuries and incidents • “Felt leadership” • Responsibility and accountability • Safety integrated into business processes • Everyone accountable for safety performance • High standards, clear rules and well defined procedures • Strong operating discipline • Working safely is a condition of employment • Auditing for safety performance improvement

43. Von Roll America Sustainable High here Natural Instincts Natural Instincts Supervision Supervision Self Self • Independent • Personal knowledge, • commitment & standards • Personal value and • planning for safety • Individual recognition • Sense of ownership on • behalf of self • Dependent • Management commitment • Enforcement of rules/procedures • including the use of discipline • Supervisory control • Goals/objectives/plans passed down by management • Results from a Comprehensive Safety Improvement Initiative: • Increasing commitment to safety philosophy - at all levels • Continuous improvement of Safety Management Systems • Mastering prevention…. elimination of injuries…..ZERO! • Interdependent • Helping/correcting others • Pride in the organization • Valuing team goals/performance • Sense of ownership on behalf of “Team” at all levels Evolution of EnergX Safety Culture

44. EnergX Established a SCWE A Safety Conscious Work Environment (SCWE), which is an element of a good Safety Culture, is one in which employees feel free to raise concerns without fear of retaliation, regardless of whether that is to their own line management or to external regulators.

45. SCWE Methodology • Identify the desired SCWE “End State” (usually in terms of attributes of the work environment); • Establish the current state of the work environment by attribute and demographics (baselining); • Develop performance indicators and a work plan that addresses any identified weaknesses in the work environment; • Implement the SCWE Improvement Plan that provides the necessary infrastructure to support change and prepare organization to incorporate SCWE behaviors; • Continuously monitor for development of any additional “trouble spots” in the work environment, and work those issues to closure.

46. EnergX Leading Safety Indicators – Vital Behaviors • Clear Expectations • Established vision of excellence • Management expectations consistent and clearly communicated • Responsibility, authority and accountabilities clearly defined and published • High Performance • All compliance requirements met • Up-to-date activity for requirements-driven changes, maintenance procedure changes, and other work that can impact safety (no backlog)

47. EnergX Leading Safety Indicators – Vital Behaviors • Adequate Capacity and Competence • Demonstrated organizational ability to proactively seek, find and correct problems • Requirements and commitments identified, managed and fulfilled • Management systems have sufficient capacity to accomplish the necessary work • Supportive Culture • Corporate culture that embraces change when issues are identified internally or externally

48. Safety Performance – The Outcomes • EnergX performs technically challenging and high-risk work in a safe and compliant manner • Never had a lost time accident • OSHA Recordable Rate = zero • Never received an NOV • Never received a PAAA • citation or fine • National Safety Council • “Perfect Record Award” • for five consecutive years • at TWPC

49. EnergX Achievements • ISO 14001 Certification • DOE Voluntary Protection • Program (VPP) STAR • EnergX awarded the VPP • Star of Excellence Award • DOE 5 Year “Outstanding • Safety Performance” Award • Achieved 1,300,000 accident/injury-free hours

50. DOE Recognition “EnergX has taken their commitment of assuring a safe work culture to heights that are to be commended. They have made a collective commitment to doing this work safely while at the same time, involving their workers in the planning and execution of the work.” • Gerald Boyd, Manager, • DOE Oak Ridge Operations Office, 2008