Paul O'Neill CEO of Alcoa – It's all about safety

Paul O'Neill CEO of Alcoa - It's all about safety



did a good job through the years they were always a leader in manufacturing area on their safety incident rates but in the last 25 years from 1987 the company has gotten an awful lot better in 1987 Paul O'Neill was hired at Alcoa Paul's the CEO and those of you who know him know that he made his number one priority safety clearly his number one priority every time he talked his first words out of his mouth were about safety every meeting the first agenda item was safety even an annual shareholders meeting the first words out of his mouth or in the unlikely event of an incident we're going to proceed in an orderly fashion this way is from the CEO he had the first agenda item at the shareholders meeting but also at the Board of Directors meeting at every board meeting they get reports ahead of time that included in that report to the board is a health and safety report at every quarterly review that a business unit president would happen at one time we at that time we had 28 businesses and they would come in quarterly for review with the CEO the first item they were expected to cover was safety it wasn't finances it was safety now of course they covered their finances and they covered market share and they covered everything else but the first item was always safety which is pretty good so maybe the place to begin is to explain a little bit about how I got interested in safety and to put it in context because for me safety is an element of a broader set of philosophical ideas about human beings but I got recruited it was actually in April of 1987 and I agreed to go to work on the 15th of June so I had three months to think about what is it I'm going to do when I go and I'm supposed to be the leader for this huge worldwide organization which is really a privilege to have an opportunity to consolidate ideas and say to yourself you know what is it that you're going to do and what is it you want to be remembered for when you leave and at the top my list was safety now you might wonder why would I put safety and it needs some explanation I think in a great organization this is out of 40 years worth of experience in an organization let me say this correctly that has the potential for greatness it's possible every day for every human being in that enterprise to say yes to three questions without any reservations so here are the three questions are you treated with dignity and respect every day by everyone you encounter it sounds fairly simple maybe some of you say absolutely you know most organizations I have to tell you it's hard for people to get by the first question because there are still elements that you can see in the behavioral patterns the way people interact with each other that that are caused people not to be treated with the same uniform level of dignity and respect because of their race or their gender or their nationality or their relatively higher or lower level of educational attainment or most importantly maybe their rank in the organization so I believe in a organization of the potential for true greatness none of those characteristics have anything to do with the dignity and respect that every individual is accorded a second question is are you given the things you need tools equipment training encouragement so that you can make a contribution this the most important part of number two that gives meaning to your life you know it's not about making this more famous financially successful place it's about that every individual find themselves in a position they can say every day without any reservation the work I do here gives meaning to my life I don't have to find it in fishing or golf or painting or some other outside thing I get meaning in my life from what I spend most of my waking hours doing that's all hurts else too but I believe it's the right test for an organization of the potential for greatness the third question is a short and simple and that is do you get recognized for what you do you know around the world in all the countries I've worked in no matter what level of educational attainment people have made I'd be able to say back to you what I just did in characterizing this landscape of human interaction people want those things not you know it's the human lifeblood that is the most important asset now how did I get to safety at the top of my list in April of 1987 by observing that most organizations say our human human beings are our most important asset but in most places no there's no proof it's really true it's just something you say so I'll tell you the numbers in the June the 15th of 1987 the lost work day rate across Alcoa operations in 43 countries or so was 1.86 the rate in 1987 is staggering it was five five out of every 100 workers in the American workforce had an injury at work that caused them to miss at least one day of work Alcoa is 1.86 and the safety director was obviously really proud of how great Alcoa was and so after I ended up raising Charlie Domitian who was a safety director that I said to me Oh Charlie I believe our goal and I'm going to be insane that's all over Alcoa so you should be you should know I'm going to be insane that is alko's objectives that people who work for Alcoa will never be heard at work so our goal is going to be zero even the safety director was star by the idea that zero would be our goal and it was interesting I found this about lots of different things that there are there's kind of a litany of reasons why not right so the first reason why not is we can't afford it you know in order to really get to zero we're going to have to wrap every employee in some kind of a cocoon and they won't be able to move their arms to do the work you know so we can't afford it here's one that's a really an awful one it has a lot of traveling power human beings are not capable of being perfect and that means we're going to have human error no matter how much you don't like it and so we can't get to zero because people will do stupid things you know those are the two most potent reasons why not so I said you know I don't know how good the informal communication system is in Alcoa but I hope you all have already heard that I believe we should achieve an incident free workplace at Alcoa and I want you to know I'm really serious about this and so I turn to the Supervisory crowd and I said them you know here's what I mean by this as soon as we identify anything in our work environment that could lead to an Alcoa employee being hurt at work I want to fix it right now I don't want to budget it from now on we are not going to budget safety we're going to follow our recognition of things that could harm people and we're going to fix it times the things that move organizations are unfortunately not happy stories but after I've been there in about three months I guess there was an incident at an extrusion plant in outside of Phoenix Arizona and the circumstances the night shift there's an 18 year old kid who had worked for the company for about three weeks and he jumped over a protective barrier that was almost as high as this it wasn't solid but it was a high barrier between his observation space and the machine that was the producing extrusions and this particular machine had a boom on it and so with every cycle the boom would cycle cycle cycle and the machine was subject to jamming the aluminum material would get jammed in the machine it would be hung up and this kid jumped over the barrier and pulled the scrap material out of the action part of the Machine and the it released the boom and came around him and had killed him instantly he had a wife who was 6 months pregnant two supervisors who had been there 15 or 20 years watched him do it actually they must have taught him how to do it because I don't think he made it up on his own they jump over the barrier and pulled him material out of the machine and so I got the whole executive crowd together all the way down to the plant supervisor level and we reviewed the diagrams and the Machine process and all of that when we were done with that technical part I stood up and said to the assembled crowd we killed him yeah the supervisors were there but we killed him I killed him you know because I didn't do a good job of communicating the dedication of the principal people will never be heard at work and obviously our recruiting process didn't do a very good job or our measurement process didn't do a very good job of assuring that people who in this chain believed that safety was the single most important thing actually not a priority you know this might counsel to you safety should never be a priority it should be a precondition like before you can get up and walk around you have to breathe safety should be like breathing it should be a precondition for organizational behavior I tell you what the people in the organization were stunned by the idea that they should accept personal responsibility for this death you know they all regret I tell you there was never more caring organization of my experience in a traditional sense than Alcoa every person that was injured or killed they mourned believe me they really mourned and they regretted it and all of that but they didn't understand they were responsible for it yesterday morning a lost work they raid at Alcoa around the world was 0.126 which is pretty good but I wish it were zero I'm a pony left Alcoa people asked Paul were you were you a success well he was a resounding success in every area in a financial area shareholder value and safety but his answer was pretty interesting he said if the loss workday rate and total recordable rate continued to fall long after I'm gone I will have been a success so I'd say if you look at that graph he was a pretty good success and that's a sustainability answer it's a kind of answer that you really want in an organization so he's very very proud of that

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17 thoughts on “Paul O'Neill CEO of Alcoa – It's all about safety

  1. Treat your employees with
    1- dignity and respect no matter their ranking or ethnicity.. etc
    2- Give them the right tools and training so they find the meaning in their lives.
    3- make sure they are bing recognized of what they do!
    This is gold.
    Im also here from the Power of habit😏

  2. paul o neill is a good manager of excellent institution power of habit basic thing in nice personality

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