"The proof of the pudding is in the eating." We've all heard this proverb and remember it because it is simple, evokes emotion, and clearly and concisely delivers a message through a very short story.
We all know from experience that culture is the operating system for safety programs. If the culture is bad, the success of programs is seriously jeopardized. And, if you don't know where you are culturally and/or where you want to go to, the chance of arriving at a loss resistant environment is very low. So, it is essential to be able to quantify culture. "If you can't measure, you can't manage." And, "What gets measured gets done."
A lot has been said about culture and everyone is saying that what they do will improve culture. Most of them are at least partly right. Everything we do affects culture and if we are experienced and smart, we will make more good decisions than bad. But, without measurement, we'll never really know just how smart we have been. Nor, will we be able to demonstrate to others the positive results of what we have done.
So much has happened over the years to corrupt the practice of loss prevention. Current methods of measurement of safety performance are very near the top of the list. We basically have three ways we currently measure safety. We use workers' compensation costs, audit results, and accident rates. They are all retrospective, and can be manipulated with such ease that it would seriously bore Andrew Fastow, the former Enron CFO, who is doing his manipulation behind bars now.
Let's take a brief look at each of these systems to give us some perspective on why we need to turn to culture quantification…FAST.
Workers' compensation costs are based on three years experience that begins as far back as four years ago. Often they have as much to do with how claims are handled as with how the accident prevention effort is doing. Such things as the nature and quality of nursing and medical services are other significant factors. And, those costs only represent the "tip of the iceberg."
The subject of the cost of losses is best treated in the Benchmark Survey produced by Ernst & Young.
The goal and objective of every CEO is the same: They are charged with providing stockholders with the best return on their investment (ROI) that is possible in the business in which they are engaged. The best single way to achieve that objective is to avoid unnecessary losses and in so doing minimize the cost of risk (COR) of the organization. This fact is rarely recognized and even less frequently discussed in any detail.
