I read an article in HBR recently (1) which argued that organisations should view safety as a strategic differentiator.
The authors claimed that customers are more likely to choose products from companies with a strong record on safety, and used example in the automotive, airline and construction industries to prove their point.
“Safety is associated with a 9% lift in overall customer satisfaction, which in turn drives a 13% increase in sales”.
The authors don’t describe whether this uplift was driven by perception of better safety standard of the PRODUCT (ie a safety benefit for the customer) or PRODUCTION (ie a safety benefit to workers), but we can infer that while the former is likely to drive up sales, the latter is likely to improve internal performance metrics such as staff turnover and worker downtime.
Both are important, but the strategic implications are different: the railways are a dangerous working environment, but relatively safe for customers. Pharmaceutical companies may have relatively safe working conditions but potentially catastrophic impact on customers if their products aren’t safe to use. The automotive industry must contend with both types of risk.
The problem of focus
At Epion, we have significant experience working in safety-critical industries such as rail, construction and life sciences. We have seen first-hand how powerful it can be when safety becomes a core value.
In one organisation, you can’t go more than 10 metres in any office building without seeing a message emphasising an element of safety, from a reminder to hold the handrail to a caution about uneven flooring.
Here, safety is elevated to a point of pride and permeates every facet of the fabric of the culture. You will be challenged if you are carrying hot coffee on the stairs or don’t have your lanyard properly visible.
But this makes sense: in this organisation, people can (and sadly do) lose their lives.
Likewise, driving a car, working on a construction site or operating heavy machinery are inherently risky activities.
For these organisations, protecting the physical safety of its employees is not just strategically important – it’s a moral and legal obligation. A duty of care. And positioning it as a performance driver rather than an ethical requirement places it alongside other corporate objectives in a way I find distasteful (and from what I’ve seen in organisations that take safety seriously, I’m not alone). Safety metrics should be tracked, but while it’s impossible to reduce any risk to zero, most of us would be uncomfortable saying workplace injuries should be tolerated if they improve a KPI elsewhere.
Likewise, the impact of getting pharmacovigilance wrong can severely impact a pharmaceutical company’s reputation and right to operate, but those working in these industries often see their role as saving lives rather than designing products. Of course there needs to be return-on-investment, but people tend to see curing cancer as more than just another day at the office.
On the other hand, when I’m buying socks, the safety performance of the sock seller is unlikely to radically influence my buying choices (assuming they have robust safety standards build into their supply chain). And unless the socks are made of lead, work-related safety incidents are unlikely to significantly impact the company’s productivity stats. After all, safety incidents in most organisations (excluding safety-critical industries) are now vanishingly small.
Essentially, I’m saying that if safety-related incidents are a significant risk in your organisation, you should be viewing them through an ethical, rather than financial, lens. And if they’re not, then as long as you fulfil your obligations (which in the UK at least are mandated by robust laws) then you’re unlikely to gain a competitive advantage from focusing on safety over other strategic differentiators.
So safety shouldn’t be seen as a way to boost performance for most companies then?
Well hang on just a minute!
So far, we have been talking exclusively about physical safety: protecting people from physical injury or death.
This is the baseline that every worker and customer can, and should, expect. It’s a legal right, protected by law (at least in this country) and largely enforced.
But psychological safety is an altogether different beast.
While there are some elements of psychological safety which are part of our legal framework (such as protection from workplace bullying or harassment), in my experience it’s very much the wild west out there.
Unlike most workers, who may have five or six jobs in their lifetime, we have worked with dozens of organisations across many more individual projects. This gives us a broader perspective on workplace culture and the extent to which some organisations drop the ball when it comes to providing a psychologically safe working environment.
In fact, some organisations which explicitly pride themselves on their track record on physical safety fail to bring the same zero tolerance attitude to toxic behaviours.
Some examples of behaviours to watch out for include:
HiPPO (‘highest paid person’s opinion’) – where everyone just agrees with the most senior person; no-one feels safe to voice a different opinion
Blame and shame – where mistakes are used to scapegoat individuals or teams rather than an opportunity to learn and improve
Turf wars – staff generate safety through ‘in-group’ dynamics; other departments are seen as rivals for attention and resource
‘Quiet quitting’ – a type of ‘flight’ response, often as a result of stress or boredom, where staff feel so undervalued they disengage from work and do the bare minimum
Politics – with no common vision or shared objectives, individuals promote their own interests, constantly in fear that they will be outmanoeuvred.
While it’s very difficult to see how creating psychological safety could be enforced in the same was that physical safety legislation has transformed working conditions over the last 50 years or so, it is much easier to see how tackling toxic behaviours can enhance performance and be a strategic differentiator.
The cost of toxicity in the workplace is significant. Two separate studies (2, 3) put the cost of staff turnover directly related to toxic culture at around $50 billion annually. This is not significantly less than the $167 billion lost to the US economy due to (physical) workplace injuries in 2022 (4), not to mention all the other intangible or unquantified harm caused to the individual and their loved ones. It also fails to account for the lost productivity of those staff who don’t have the means to leave a toxic job.
While all senior leaders should be concerned about the potential losses caused by pathological working environments, they also risk missing out on the competitive advantage conferred on businesses that get culture right.
Numerous studies (5, 6, 7, 8, 9) have shown the positive link between a supportive culture and business benefits such as innovation, learning, teamwork, inter-personal communication and organisational outcomes.
So, while protecting the physical safety of your people can be seen as avoiding risk, enhancing psychological safety can be seen as generating competitive advantage – as well as being the right thing to do.
And the gold star solution?
Take a holistic view of your people’s safety, including both elements. Go beyond the ‘do no harm’ mantra and invest in giving them right conditions to succeed. Time and again we see that the organisations that get this right are also the most successful.
It’s not a trade-off – it’s a win-win!
If you would like guidance on this or any other issues related to change, schedule a free consultation: https://calendly.com/ruth-tank/30min?month=2024-09
References:
(1) Mittal, V., Piazza, A. & Singh, S. (2024) ‘Safety Should Be a Performance Driver’. HBR September-October edition
(2) Society for Human Resource Management (SHRM) (2019) ‘The High Cost of a Toxic Workplace Culture’
(3) MIT Sloan Management Review (2020) Why Every Leader Needs to Worry About Toxic Culture.
(4) Sull, D., Sull, C., & Zweig, B. (2022) ‘Toxic Culture Is Driving the Great Resignation’, MIT Sloan Management Review, 11 January.
(5) Psychological Safety in Theory and In Practice - Harvard Business Review. https://hbr.org/podcast/2021/12/psychological-safety-in-theory-and-in-practice.
(6) Trust and psychological safety: An evidence review: Practice ... - CIPD. https://www.cipd.org/globalassets/media/knowledge/knowledge-hub/evidence-reviews/2024-pdfs/8542-psych-safety-trust-practice-summary.pdf?trk=public_post_comment-text.
(7) Psychological Safety: Transforming Theory Into Practice - Forbes. https://www.forbes.com/councils/forbesbusinesscouncil/2024/06/21/psychological-safety-transforming-theory-into-practice/.
(8) The Critical Link Between Psychological Safety And Innovation - Forbes. https://www.forbes.com/councils/forbescoachescouncil/2024/06/03/the-critical-link-between-psychological-safety-and-innovation/.
(9) The Direct Link between Psychological Safety and Business Results. https://www.advantexe.com/blog/the-direct-link-between-psychological-safety-and-business-results
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