The Culture of Safety

Larry Simkins | President, The Washington Companies

My name is Larry Simkins. I’m President and CEO of the Washington Companies based in Missoula, Montana. The Washington Companies are a group of companies founded and owned by Dennis Washington that employ over 4,000 people all over the world. The companies that we have do business in the mining industry, marine and rail transportation, shipyards, environmental construction, heavy equipment distribution, and aviation products.

It is those industries that I’m going to talk about today: industries with typically high risk employment.

With our significant footprint throughout Montana in several critical industries there are many interesting topics I could have chosen to talk about: responsible environmental mining, technological advancements in transportation, labor and union relationships, the tangible impact of our foundation in the communities around Montana, or the need for an educated workforce in all those industries.

Instead I chose to talk about our safety culture.

I recently read that Montana’s workers’ compensation rates are the highest in the nation. I also read that Montana’s injury rate is 50 percent higher than the national average, principally because Montana has hazardous industries. The National Council on Compensation Insurance has found that Montana’s workers’ compensation system experiences significantly more permanent and partial disability claims that any other state in the western region.

One of the indicators of safety that we use in the industry is called an experience modification factor, an EMR, and it is very common in the workers’ comp system. The question is: how does a company like ours, which is one of the largest employers in Montana with nearly 7 million man hours a year, historically in dangerous businesses like mining and railroading, have one of the lowest EMRs in the state at less than 0.51?

It’s a culture. It is a core belief from everyone in the company, from the top to every person that shows up for work each day, that it is not until every person embraces the core value that we want you to return home in the same condition that you were in when you came to your shift that day, that we accomplish any meaningful improvement.

Twenty years ago the common belief was that production was primary and safety was secondary, and any focus on safety would impede production. Today I’m telling you that with our company we are proof that this myth is no longer true. In fact in the mining industry these days, they say that the safest mines are the most productive mines.

So what I want to discuss is our experience in just the last 10 years regarding safety. I’m going to tell you some stories about things we are doing. What is interesting is that during these last ten years, it has been a period where we were not sitting still: we have reopened the copper mine in Butte, we have started a shipping container company called C-Span Corp that is now the largest supplier of container ships to China, and we’ve expanded the Modern Machinery, based in Missoula, service to Russia in an area that is one third of the land mass of the United States. It has not been a stagnant period where we have had this improvement in our safety; it has been a very dynamic growth period.

I talked earlier about our private companies, excluding C-Span Corp. They generate about seven million hours annually with some years in excess of nine million. In those same 10 years our reportable injuries have declined 69 percent. Let me repeat, our reportable injuries have declined 69 percent in companies that were already performing better than industry average, in a state that has historically hazardous jobs, and expanded the footprint of the companies all at the same time. As I speak, Montana Resources, our mine in Butte, is approaching 1.5 million man hours without a reportable accident. That is in an operation that mines copper around the clock.

One of the most compelling things about our safety culture is that we are a private company. We never disclose our financial information externally. But I can assure you that during this time period our profitability has grown at a rate more than our safety standards have improved. If you were to chart our safety statistics and our profitability, I’d guarantee that they would plot a perfect X with profitability going up as accidents decrease.

I could spend the rest of the afternoon extolling the virtues of our safety program, talking about industry statistics and talking about the obvious savings within an operation, but instead I want to tell you about a couple different things within our culture which have been monumental in being able to improve our current safety culture.

Safety is at the absolute top of our list. When I say the top of our list, I mean each one of our companies has a separate management team that runs separately, operates completely autonomous from each other, however they each report to a board of directors. At every board of directors meeting, four times a year, the top item that we speak about is safety, the report for the last month, the last year, and the last five years. Also each one of the presidents submits a weekly report of the activities for the previous and upcoming week. The first item on that report is safety. If there have been any incidents it describes what the incident was, how it happened, and what management has done to make sure that it doesn’t happen again.

At one point we had an issue at one of the companies where they were having difficulty with one of their safety programs. Now, any time there is an accident, the supervisor is required to show up at the president’s office and talk to him about what happened, and what they put in place as a safety measure to ensure it doesn’t happen again. What also happens is that the president has to call me on every single accident and explain to me, before it shows up in the next report.

Another one of our companies already had a strong safety record, and they wanted to improve it even further. When they looked at the data they found that 31 percent of the hours they had were from new employees. However those new employees were responsible for 72 percent of the accidents. They instituted a mentor program whereby a new employee is assigned to a person with some longevity in the company, and both are held responsible for each other’s safety in that time period. Two years later we found that 20 percent of the man hours are from new employees and only 24 percent of the accidents are their responsibility.

Not only are there fewer accidents, but the longevity of employment is no longer the leading factor when an accident does not occur.

Also of importance is transparency and accountability. In most of our companies our frequency rate is published by supervisors and everyone has access to that information. Daily work plans and briefings are mandatory. Employees are empowered to stop work in any unsafe production environment. This all provides a consistent, common goal that resonates with both management and front-line employees.

When people figure out that it is important to me, to your co-workers, and it is important to your family that you return home in the same condition you reported to work, it becomes a very powerful message.

I remember exactly where I was standing on a Sunday in August of 2008 when I got the call that a plane shuttling six crew members to one of our log barges in Canada had crashed, and their condition was unknown. We ultimately learned that only two had survived and that the other four crew members and the pilot had perished in the crash.

It is those moments that ultimately sear in your memory how a simple, unsafe act in a work environment can immediately impact the lives of your, your co-workers, their families, and a community.

Our safety culture is important for many reasons. But ultimately it boils down to caring about the people you see every single day that are committed to being part of a successful organization that we can all be proud of.