Cfma building a safety process from scratch


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Cfma building a safety process from scratch

  1. 1. r e p r i n t January-February 2010CONSTRUCTION FINANCIAL MANAGEMENT ASSOCIATION The Source & Resource for Constr uction Financial Professionals
  2. 2. BY PATRICIA KAGERERBUILDING A SAFETY PROCESSFrom Scratch As you can imagine, I was surprised and excited about the opportunity, as well as a little apprehensive. While I had many years of experience in safety and claims for both the insurance and private manu- facturing sectors, my construction expe- rience was limited. I also didn’t know how truly committed the company was to change, something absolutely necessary to improve long- term performance. SOME BACKGROUND Headquartered in El Paso, TX, Jordan is a leading general construction services com- pany. Founded in 1969 with offices in Dallas, El Paso, Houston, and San Antonio, it has completed more than $5 billion dol- lars in commercial, civil, residential, and government construction. In 2002, one of the biggest challenges Jordan faced was its exposure to workers’ comp claims. At the time, the Texas work- ers’ comp system had the highest medical costs of the 50 states, coupled with the lowest return-to-work rate.In May of 2002, C.F. Jordan Construction decided And, given that the city with the highestto create a Risk Management/Safety Department – exposure was El Paso (where Jordan em-and I was tapped to take charge. ployed approximately 300 laborers), I was faced with two immediate challenges: 1) How to create an effective safetyWith more than 400 employees and performing over culture within the company; and$300 million in construction each year, it was time for 2) How to address the impact ofJordan to take action – to embrace risk management lingering long-term workers’ comp losses on our insuranceas a business strategy and safety as a core value. premiums.CFMA BP January-February 2010
  3. 3. A real life adventure In fact, with SAFETY as a LEADING INDICATOR of OVERALL JOBSITE PERFORMANCE, we can use that information to CIRCUMVENT not only safety-related LOSSES, but also LOSSES from rework, subcontractor default, lost owner customers, and future defect claims.TAKING THE FIRST STEP GETTING TO KNOW CONSTRUCTION You don’t have to see the whole staircase, As a female in the Texas construction industry, I was not the but you must take the first step. most logical candidate for the position. And, once on board, Martin Luther King, Jr. I wasn’t exactly flooded with invitations to visit jobsites or attend meetings. So, I just started showing up! As a redheadThe first order of business was to conduct a complete claims who spoke Spanish, my initial jobsite visits created both sur-analysis, meet with Jordan’s insurer, and work on closing as prise and confusion. (To be frank, this reaction took somemany claims as possible. (This in itself was a major under- getting used to, and the hard hat was hell on my hair!)taking, since we had more than $1 million in exposure onworkers’ comp alone.) Within the first six months, I estab- The good news was that I had a few aces up my sleeve. Inlished a good working relationship with our claims manager addition to speaking Spanish, I had grown up in El Paso, wasand – one by one – closed more than 50 claims. well-versed in safety management, and am an effective com- municator. I have a great affinity for the Hispanic culture, andBy re-establishing contact with the employees who were out since I believe the best way to learn how things are done is toon workers’ comp, developing a positive rapport with our ask the workers doing it, I asked many questions and startedclaims adjusters, and creating a transitional duty program, all to develop good working relationships with the Hispanicoutstanding claims were closed in less than one year. But, laborers.while minimizing exposure on existing losses, we also neededto tackle Jordan’s exposure to accidents by implementing a Soon the workers were happy to see me and began to appre-comprehensive safety process. ciate the time I took to say hello, ask what they were up to, and learn how we could make their jobs more efficient andSince both Jordan’s safety training and recordkeeping needed safer. Since everyone loves to talk about what they do andimprovement, we started with a 30-hour OSHA training course how they do it, I went from project to project talking to thefor the entire management team. While OSHA compliance superintendents and foremen in addition to the workers,represents just the basics in safety, the course provided a good soaking up as much as I could as fast as I could.overview of the minimum expectations for our projects. It alsoestablished the foundation for what was required by OSHA in I eventually heard through the grapevine that Jordan’s PMsthe field. met every Monday morning for about an hour at our HQ office. The first meeting I “crashed” lasted all of 10 minutes! I sat andAfter performing the claims analysis, we realized that one acci- listened and returned the following Monday with a report ondent exposure we could easily address was the proper set-up current projects, our safety plans and goals, etc.and use of scaffolds. So, we developed a hands-on training pro-gram for our employees and subcontractors that covered how It took a few weeks until I was considered a member of theto assemble, access, and work safely on a scaffold. group; but then, if I didn’t show up, my absence was noted and remarked upon. We accomplished a lot during that first yearWe also offered an after-work class in Spanish. That may sound because the project management team was open-minded andbasic, but for our El Paso labor force, it was the first time many willing to listen to new ideas and a fresh perspective. Whilehad received such training in their primary language. (More there was always spirited debate, new learning and buy-inthan 300 people attended these training sessions.) occurred during these weekly meetings. January-February 2010 CFMA BP
  4. 4. contractor default, lost owner customers, and future defectHEALTHY COMPETITION claims. If I am through learning, I am through. John Wooden SPEAKING THE SAME LANGUAGEMany excuses were offered during the early stages to keepthings status quo. Some of my favorites included: Many safety professionals enter the field because they want to make a difference. Educating and training a construction • Our subcontractors would never comply. workforce in order to minimize exposure to accidents is noble • People would get angry if asked to work safely work. While this is all well and good, safety professionals must or wear Personal Protective Equipment (PPE). speak the same language as their executive management teams • Our workers would never understand what was in order to be heard. expected of them. • We would slow down production. I’m not talking English and Spanish here, but rather the lan- guage of profits, losses, and corporate performance that is tiedPersistence, coupled with a healthy dose of competition, to safety. Since all corporate executives are motivated by prof-soon changed many of these attitudes. First, we established itability, sustainability, and reputation, a safety professionalmore communication between divisions through newsletters, must learn to present a company’s safety needs in terms of ROI,monthly reports, and stand-downs. Then, we tied overall job long-term profitability vs. short-term investment, and the abil-performance to overall safety performance, and our employ- ity to protect the company’s sustainability and reputation.ees began to see that superintendents were recognized fortheir safety records. Significant Results After only one year into our new safety process, we could pointCompetition created momentum, and soon jobsites through- to the following: Our workers’ comp incident rate was downout the company were both committed to safety and calling more than 95% and our claims costs went from $1 million tomy department for guidance, help, and support. This cultural $26,000 for the year. In addition, Jordan employees workedshift took a lot of time and effort, but was well worth the over 800,000 man-hours without a lost-time accident.struggle. I made sure that our CEO/President and executive manage- ment team were aware of these successes and that some of theSAFETY IS A LEADING INDICATOR OF QUALITY savings we had generated was translated back into the safety& SCHEDULE PROBLEMS process.An interesting phenomenon occurred as I learned more about It was time to celebrate and let everyone know just how wellsafety challenges in the field. Whenever I considered placing a we were doing, and more importantly, to recognize the com-project on our “Safety Watch List” because the basic safety re- mitment and success of our workers and field project person-quirements (audits, PPE, and housekeeping) had become a nel. They are the lifeblood of our company and the reason forchallenge for the superintendent on the project, our CFO and its success. Had it not been for the superintendents and PMsController would simultaneously notice that the project was in El Paso who supported the new safety process, none of thisnot performing well financially. Fees would begin to fade, would have happened.delays would occur, and excuses would flow.So, over time, we learned that there was a distinct, visible,measurable link between safety performance and overalljobsite performance. EXPANDING THE SAFETY TEAMThis got the attention of both our CFO and CEO/President. It soon became evident that a financial investment in safetyIn fact, with safety as a leading indicator of overall jobsite was worth it and would pay off in the long term. I was able toperformance, we can use that information to circumvent not expand my staff, and as Director, took on more responsibilitiesonly safety-related losses, but also losses from rework, sub- – including litigation management, quality, and wellness.CFMA BP January-February 2010
  5. 5. A real life adventureBut, expanding the focus didn’t matter. What did matter was sionals can assess a project’s culture in a matter of minutesJordan’s definition of what was important, in addition to what simply by answering the following questions:management defined as success. • Is the project clean and well-organized?Jordan was small enough that I could bring a problem to the • Are most people working and is there a visible plan inexecutive management team and volunteer to be part of the place? A lot of people standing usually around indicatessolution – one of the best parts of my job. Never dull, always that the project is out of sequence or that the tools andchanging, my job has given me the opportunity to achieve materials needed to perform the job are not available.and learn more than I ever imagined. • Is the labor force angry or lethargic? People hangingAs we continued to expand and develop our safety process, around will find something to do – but not necessarilyit was extremely important that we hired safety profession- what is needed to complete the project with safety andals whose style matched our company’s. Since superintend- quality in mind.ents are typically averse to having safety people onsite • Are there signs of vandalism, such as broken glass orchecking what they are doing, a “safety cop” mentality was fixtures, graffiti, or paint on the walls?just not going to cut it at Jordan. • Do the foremen respond well to questions or do theyWe hired a fully bilingual staff and trained them so that when blame others, become aggravated, etc.?they visited the field, their purpose was to educate, support,and help our superintendents and labor force. We wanted our Since the superintendent is perceived as the Sheriff, what isstaff to be seen as resources who could be used to help move a priority for the superintendent becomes a priority for thejobs along – pointing out not only those areas that needed jobsite team. The superintendent’s leadership focus drivesimprovement, but also what was right about each job. the project’s overall culture and level of performance. So, it’s important to ask: How is the superintendent being rewarded?WHAT I’ VE LEARNED SO FAR A reward system that only recognizes the schedule produces just that – a mediocre project that is brought in on time.A Safety Process Based on Blame Will FailSince OSHA’s inception in 1971, safety professionals have been Is there a disconnect between the goals and expectations ofchallenged to find ways to eliminate human error from the your executive management team and the project’s owner?workplace. In an effort to meet compliance standards (and do In many companies, the GC’s management team only com-the right thing), companies have spent millions of dollars try- municates with the superintendent on a random basis, whileing to mitigate exposure to risk. While great strides have been the owner’s representative is onsite more often – and maymade, efforts in employee training and compliance do not nec- ask the superintendent to make decisions that benefit theessarily translate into improved performance. owner (not necessarily the GC) in order to keep the project on schedule.One of the biggest disconnects faced by safety professionals isthe perception that accidents or near misses sometimes result This, too, can be a recipe for disaster. Something so simple asfrom human error, bad judgment, and flawed actions. As man- asking a superintendent to provide labor for a subcontractoragement seeks to regulate, engineer, or automate “the human” that is falling behind can result in unnecessary safety expo-out of the process, companies typically hope to find someone sures to an untrained labor blame. Unfortunately, this approach neither addresses theproblem nor removes potential exposure to loss. Does the superintendent have a solid communication network in place so that when problems arise there areConstruction Projects Take on a Life of Their Own company-wide opportunities to fix them?As any jobsite superintendent will confirm, each construction Often, one simple issue (for example, a delayed materials ship-project takes on a life of its own. Jobsites, like small towns, de- ment) can be handled quickly and easily with management’svelop their own unique culture over time. support.Even without a lot of construction experience, safety profes- Yet, the culture of many companies is to “hide the ball” and January-February 2010 CFMA BP
  6. 6. solve small problems inde- Elisabeth Kübler-Ross, thependently to keep the project author of On Death andon schedule. This approach can Dying, describes the fivecause a seemingly successful stages of grief that peoplepro-ject to go off track and experience when dealing withcreate safety, risk, and quality such major losses as a death orissues for a long time to come. fatal illness (denial, anger, bar- gaining, depression, andRed Flag Phrases acceptance).Based on my experience,below are the “red flag” phras- This model also relates toes that indicate whether or not change management and thea project will likely develop emotions employees goproblems in the future. though when affected byWhether it’s rework, subcon- change. The lure of the statustractor default, payment dis- quo is extremely powerful,putes, delays, safety violations, or accidents, hearing any one and companies em-barking on a safety initiative must rec-of these statements spells trouble: ognize that they are beginning a difficult journey.• We’re just a bunch of babysitters out here. Even though the rewards will be well worth it (and at the end• Low-bid subcontractors save us money. of the process, your employees will all benefit from it), people in general don’t like to change and will go through all of the• We need to finish and get out. stages of loss before they get to acceptance.• We’ll catch it on the punch list.• We need to get this project behind us. MORE ON JORDAN’S APPROACH TO SAFETY• Just this one time.• I’ve been doing it this way for 20 years. Since 2002, Jordan has implemented an occupational health management system called SHARP (Safety and Health Ac-• I’m going to have to drag this subcontractor across cident Reduction Plan) to ensure that we manage safety with the finish line. the same conviction and commitment as every other aspect of• I don’t have time to prequalify/check plans/walk the our business. job/perform safety audits/report incidents/check a subcontractor’s work. The plan was created by our Safety Steering Committee (comprised of representatives from the risk/safety team, PMs,Each and every one of these phrases can propel a project out of superintendents, and foremen across all divisions), and ap-balance. And when a project is out of balance, it can quickly proved and signed off by the full executive management teamspiral out of control and result in major losses. (which was responsible for the overall change process withinAn Education in Change Management Theory Jordan).Over the last eight years, I’ve realized that implementing a We also made sure that the project team members (who weresafety process was really about change management, which is expected to act as the “change management zealots”) andofficially defined as a “set of processes, tools, and techniques the superintendents and foremen (who were to act as thefor managing the people side of change in order to move a per- change coaches to their employees and subcontractors) hadson or group from a current state to a desired future state to the necessary skills to be successful.achieve the specific objectives of an identified change.” 1 The risk/safety team now works throughout the year with ourWhen embarking on a change management initiative, a com- jobsite personnel to assign responsibility and implement all ofpany must take into account not only its employees’ reactions Jordan’s safety objectives. These cover: expectations and in-to change, but also the effects that change can produce within volvement, action planning, standards implementation, plan-the organization itself. Many change initiatives fail because ning for safe conditions, and performance leaders do not understand the change process and itspotential impact. Charged with the responsibility of building both safety compe-CFMA BP January-February 2010
  7. 7. A real life adventuretency and structure, the safety/risk management department Jordan employees, subcontractors, and management onbrought in Branta Worldwide, a safety leadership consultant, to important risk management and safety topics.provide a two-day leadership symposium for my staff and all ofour supervisory personnel, management, and executive man- Jordan’s commitment to safety has evolved over the years to aagement team. With more than 150 participants throughout commitment to overall risk performance as encompassed inTexas, the training covered: our business model. We now focus on safety, quality, and pro- ductivity (SQP) to increase profitability and solidify our stand-• How to create collaboration to get better results ing as a key player in the construction industry, both now and• Resolving conflict one-on-one in the future.• Coaching to increase discretionary effort and In fact, Jordan’s commitment is so strong that the safety/risk improve performance management department has been tasked with creating a• Effective communication skills Jordan University that will streamline training for SQP and• High-impact feedback and how to use it leadership, create career goals for all of our employees, attract and retain the best talent in the industry, and minimize vari-This safety leadership and communication skills training solid- ation and embrace consistency throughout all of our divisionsified our commitment to safety and gave us the tools we needed and jobsites. BPto be successful. PATRICIA KAGERER, CSP, ARM, CRIS, is Vice President ofWE’ VE HAD MANY SUCCESSES, BUT NOT PERFECTION Risk/Safety Management for Jordan Construction in Dallas, TX, where she directs the company’s risk and safety man-I wish I could tell you that all of our efforts over the last eight agement functions and specializes in management system implementations that affect corporate culture, insurance pro-years have earned us perfection related to safety. I wish I curement, and overall safety and quality performance.could say that we are injury-free and have zero losses. Un-fortunately, I can’t. Just like human beings, our company is A frequent speaker and writer, Patricia has received numer-not perfect and we still experience loss from time to time. ous professional awards, including being named one of the “Top 25 Women to Watch” by Dallas Business Journal,I can say that we are committed to a continuous improve- and “2007 Safety Director of the Year” by QUOIN/AGC.ment process for safety and that safety is thoroughly and Patricia holds a BS in Business Administration from Regissolidly integrated as part of our core business model. We are University, Denver, CO, and a Masters of Education andfar better off than we were eight years ago because safety is Human Development from Southern Methodist University,now a core value. When we experience loss, we evaluate it, Dallas, TX.learn from it, and move on as quickly as possible. We are, in Phone: 214-349-7900fact, resilient. E-Mail: Website: www.cfjordan.comJordan’s 2009 Safety Stats• Total Incident Rate is 70% below the national average. Endnote:• Total Loss Time Incident Rate is 80% below the national average. 1. Hiatt, Jeff. “Change Management – An Introduction: Managing the People Side of Change.”• Approximately 2,000 education and training hours for management-an-introduction/3pxltcluu0sst/2 January-February 2010 CFMA BP
  8. 8. Copyright © 2010 by the Construction Financial Management Association. All rights reserved. This article first appeared in CFMA Building Profits. Reprinted with permission.