A transformative force in EHS - The Campbell Institute · role in a variety of planned SH&E activities on a regular basis. All levels of Mgmt are able to explain the business case

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email [email protected] 900001825 ©2012 national safety council

A transformative force in EHS

this leading-edge knowledge is brought to you by the campbell institute

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Executive Edge Track NSC Congress & Expo 2009

Executive Edge Session C (Technical Session 72)

Driving EHS Performance:

Effective System Implementation

Moderator: Chris Balkema, Caterpillar

Jim Johnson, National Safety Council

Buzz Morris, Chevron

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Driving EHS Performance

Effective System Implementation

Presented by:

Jim Johnson

National Safety Council

Senior Director, Workplace Initiatives

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• NSC founded almost 100 years ago to reduce

workplace injuries and fatalities

• Today’s Vision

Making our world safer.

• Mission

NSC saves lives by preventing injuries and

deaths at work, in homes and communities,

and on the roads, through leadership,

research, education and advocacy.

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NSC’s Organizational Goal

Save an additional

10,000 lives and

prevent 1 million injuries.

BY 2014

Leadership - Research - Education - Advocacy

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• 4.0 million total OSHA-recordable cases

• 1.2 million injuries and illnesses with days

away from work

• 4,689 fatalities

• $175 billion in total cost (for unintentional injuries)

$50 billion in direct cost for disabling injuries

• 147 million workers

Source: Injury Facts, 2009 Ed. and Bureau of Labor Statistics

Workplace Injury & Illness Burden

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0

2

4

6

8

10

1992 1994 1996 1998 2000 2002 2004 2006

Cas

es p

er 1

00

Em

plo

yees

Total Cases DAFW Cases

Source: Bureau of Labor Statistics

Where have we been, where are we going?

How do you compare?

Do you beat the average decline?

What are the limitations of this view?

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A Campbell Award Winner

84% Reduction in Recordable Cases

87% Reduction in Lost Time Cases Since 2001

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Customer Performance Distribution (–2 to +2 scale)

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No.

Com

panie

s

Safety Performance

Average

Leading Lagging

What is the gap between

where you are and where

you want to be?

Understand Your Safety Performance

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What does Safety Excellence look like?

NSC Campbell Award recognizes

organizations that demonstrate excellence in:

Business performance

Employee safety & health

Environmental responsibility

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Campbell Award – a Study in Excellence

• Common attributes of safety excellence

Quality Environmental, Health & Safety (EHS)

Management

• Performance to defined criteria (SMS)

• Integrated into business operation systems

Management commitment and worker

engagement

Appreciation of the intrinsic value of

EHS to business vitality (culture)

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NSC Campbell Award Winners

Category I

(>1,000 Employees)

2008 Fluor Hanford

2007 Bahrain Petroleum

Company

2006 Alcan Inc.

2005 Johnson & Johnson

2004 Noble Corporation

Category II

(<=1,000 Employees)

2008 Gulf Petrochemical

Industries

2007 none

2006 DynMcDermott

Petroleum Operations

2005 none

2004 none

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Continuous

Improvement

Sustaining

Excellence

Safety

Management

Business

Management

Premise for Safety Excellence

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• Operational excellence

• Human performance

• Public relations

• Community vitality

• Environmental sustainability

Importance of recognizing the multi-faceted

impact of Safety on overall enterprise performance

Ask yourself: Is Safety a key business value?

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Business-like approach to safety.

Systematic, explicit and comprehensive

process for managing safety risks.

As with all management systems,

SMS provides for goal-setting, planning, and

measuring performance.

SMS is woven into the fabric of an organization.

It becomes part of the culture, the way people

do their jobs.

Safety Management System as Solution

Ma

na

ge

me

nt C

om

mitm

en

t

Em

plo

ye

e In

vo

lve

me

nt

Wo

rksite

An

aly

sis

Ha

zard

Pre

ve

ntio

n &

Co

ntro

l

Sa

fety

& H

ealth

Tra

inin

g

Co

op

era

tive

Re

latio

ns

hip

with

Fed

era

l & S

tate

s O

SH

A

Re

mo

va

l from

Co

mp

lian

ce

targ

et lis

t

Pu

blic

Re

co

gn

ition

for

Ce

rtificatio

n

On

go

ing

perio

dic

re-

certific

atio

n

Inco

rpo

rate

d/R

efe

ren

ced

Sta

nd

ard

s

OSHA Voluntary Protection

Programs (VPP) X X X X X X X X X Z10

ISO 9001 X X X X X X X



Canadian CSA Z1000 X X X X X

ANSI Z10 X X X X X

OHSAS 18001 X X X X X

NSC Safety Management System X X X X X

Many

Safety

Management

Systems

Comparison

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Leadership – Management

1. Management Leadership &

Commitment

2. System Management &

Communications

3. Assessments, Audits &

Performance Measurements

Cultural – Behavioral

7. Workforce Involvement

8. Motivation, Behavior &

Attitudes

9. Training & Orientation

Technical – Operational

4. Hazard Identification & Risk

Reduction

5. Workplace Design &

Engineering

6. Operational Processes &

Procedures

NSC SMS Elements

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NSC SMS Assessment

Assessment Group Possible Score

Leadership – Management

A. Management Leadership & Commitment 45

B. System Management & Communications 35

C. Assessments, Audits & Performance Measurements 40

Technical – Operational

D. Hazard Identification & Risk Reduction 30

E. Workplace Design & Engineering 15

F. Operational Processes & Procedures 65

Cultural – Behavioral

G. Workforce Involvement 30

H. Motivation, Behavior & Attitudes 25

I. Training & Orientation 20

Final Rating 305

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NSC SMS Assessment – Example Criteria

Assessment Group A - Management Leadership & Commitment

ITEM (SCORE)

POOR (1) (2) (3) (4) EXCELLENT (5) RATING

A1

Visible Management Leadership & Commitment

SH&E coordinator totally responsible for program development & implementation.

Management periodically attends SH&E meetings after incident.

Management views and addresses SH&E as a legal requirement.

Management is involved with the SH&E program only on a reactive basis.

Mgmt provides guidance and direction to SH&E Coordination and attends staff SH&E meeting.

Management views and addresses SH&E as legal requirement and cost avoidance measure.

Employees state some levels of management routinely participate in proactive SH&E activities.

Mgmt reviews loss prevention reports and holds all levels accountable for active participation.

Upper management can explain benefits of SH&E management in terms of costs, public relations, regulatory, and ethical implications.

All levels of Mgmt “walk the talk” and demonstrate SH&E as a corporate value.

Employees report all levels of Mgmt take an active, visible role in a variety of planned SH&E activities on a regular basis.

All levels of Mgmt are able to explain the business case for SH&E management.

SH&E is tied to overall facility success and integrated into business planning process.

SH&E is included in the agenda for all management meetings.

SH&E is integrated into the entire business continuous improvement process.

SH&E is integrated into operational procedures and managed in the same manner as other functions.

Evidence of CEOs and Directors’ personal commitments and involvement to SH&E.

SH&E performance indicators include outreach to the community and the impact to the triple bottom line.

SH&E performance indicators are set for all levels of management and are regularly reviewed.

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• Management What we do

Engages the mind

Gets the right things done

Based on “transactions”

Produces products and

services

Measure through

SMS Assessments

• Leadership How we do it

Engages the heart

Gets things done the right way

Based on commitment to values

Produces change

Measure through Employee Perception Surveys

Management and Leadership

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The Importance of Employee Perception

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35

23

24

36

38

38

60

0 10 20 30 40 50 60 70 80 90 100

Scale: 0 to 100 (100 being best)

OVERALL

Employee Participation

Management

Participation

Safety Support Activities

Safety Support Climate

Supervisor Participation

Organizational Climate

Surveys give voice and engage employees!

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Phase 3

Set Goals

“Should be”

Phase 2

Establish a

Baseline

“As is”

Phase 5

Review and Adjust

“Could be”

Phase 4

Develop and

Implement Plans

“Close the gap”

Phase 1

Management

Leadership and

Employee

Engagement

Integrated

Business

System

Safety Management System Process

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Organizations with the Best

Safety/Risk-Reduction Effort

(leading Indicator)

X

Have the Fewest

Workplace Injuries

(lagging indicator)

Y

Testing Hypothesis sufficient correlation between X and Y

Learn & Evolve

Prescribe & Improve

Using Data & Math to Learn & Improve

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SMS Perception vs. TCIR

0

2

4

6

8

10

12

3 3.25 3.5 3.75 4 4.25 4.5

Composite Mean

TC

IR M

ea

n

Correlation of -.786

is significant at the

0.01 level (2-tailed)

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Summary

• Establish your baseline

Outcome performance (TRIR, DART, …)

Assessment and Survey – BE BRUTALLY HONEST

• Define/Enhance your Safety Management System (SMS)

• Evolve management leadership and employee engagement

• Re-measure, identify additional needs, enhance and improve; Repeat

• Study SMS performance (leading indicator) correlated to outcome injuries rates and costs (lagging indicator)

• Be relentless in pursuit of Safety Excellence

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© Chevron Corporation Global Upstream and Gas, Upstream Capability, Health, Environment and Safety


2009 Congress & Expo

Charles E. (Buzz) Morris

General Manager, OEMS

Global Upstream and Gas

Executive Edge Session C: Implementing a Health, Environment and Safety Management System

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Contents

Welcome

Chevron’s Management System and Implementation Journey

Critical Elements of a Management System

Case Study

Lessons Learned

“Achieving operational excellence requires a systematic approach and commitment to incident free operations – always and everywhere. That’s the power of the Operational Excellence Management System.”

- Dave O’Reilly, CEO

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Learning Objectives

1. Understand the three core components of Chevron’s Health, Environment and Safety (HES) Management System.

2. Increase understanding of how and where to start to implement a HES Management System.

3. Recognize lessons lessoned that are applicable to your organization.

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What is Operational Excellence What is the Vision

Operational Excellence (OE) is the systematic management of safety, health, environment, reliability and efficiency to achieve world-class performance.

We strive …to be recognized and admired by industry and the communities in which we operate as world-class

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OE Objectives What We Aim to Achieve

OE Objectives make it clear –

Our goal is zero incidents and 100% safe behaviors:

Achieve an injury-free work place;

Promote a healthy workplace and mitigate significant health risks;

Eliminate spills and environmental incidents; identify and mitigate key environmental risks;

Operate incident free with industry-leading asset reliability; and

Maximize the efficient use of resources and assets.

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Chevron’s Implementation Journey The Key Milestones

2003 Operational Excellence Management System (OEMS) Developed

April 2003

Inaugural Operational Excellence Forum Objectives:

1.Introduce tools to improve the four Safety & Reliability focus areas; Contractor Safety Management (CSM), Motor Vehicle Safety (MVS), Repetitive Stress Injury Prevention (RSIP) and Reliability 2.Share “Leadership” examples and best practices from leaders already taking actions to create successful “OE Cultures.” 3.Introduce OE Knowledge Management tools for the Networks 4.Provide opportunity to establish contacts, share best practices and learning across the organization

Jan 2004 Upstream--Project Atlas: Development Plan Approved

March 2004 OEMS Overview Version I Released Enterprise Wide

Nov 2004 Downstream--Prometheus: Development Plan Approved

Mar - Jun 2005 OE Certification and Educational Modules Released

Dec 2005 Received LRQA Design Attestation vs. ISO 14001 and OHSAS 18001

March 2007 OEMS Overview Version II Released Enterprise Wide

April 2009

LRQA Attestation of OEMS Implementation, “We conclude that the Chevron Operational Excellence Management System meets all requirements of ISO 14001 and OHSAS 18001 and is implemented throughout the Corporation.”

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Chevron’s OE Framework

OE Expectations

Policy 530

Chevron Way

Compliance Assurance

Component Management Centers of Excellence (CoE) / Communities of Practice (CoP)

Management System Process Operation

OEMS Governance

Leadership Accountability

Components Elements & Expectations

Processes Standards

Enablers Document

Management Data

Management Competency Management

Technology Management

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Management System Process (MSP)

The MSP consists of five steps done annually as part of the business planning cycle

Review Progress against plans

Develop plan to close

gaps and continually improve

Identify gaps against

objectives and

prioritize

Align workforce; clear goals, direction and plans

Establish or validate vision and objectives

Assessment Vision &

Objectives

Review Planning

Implementation


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Key Parts of the OE Framework Corporate Components

OE Elements: The 13 Categories that organize the 46 Corporate Expectations within

the OEMS.

OE Expectations:

Define enterprise “aspirational” state relative to a specific OE Element.

Required Processes: Specify what shall be done and how it shall be done to satisfy OE

Expectations.

Required Standards: Specify what shall be done to satisfy OE Expectations without

specifying how to do it (includes technical / engineering standards).

Components

Elements & Expectations

Processes Standards

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Key Parts of the OE Framework Running the OEMS

OEMS Governance:

Governance board sets OEMS policy, vision, objectives and strategies; and provides Corporate Management System Process (MSP) oversight to achieve world-class OE performance.

MSP Operation:

HES and Reliability and Efficiency Steering Committees operate the Corporate MSP.

Process or Standard Management:

Centers of Excellence and Community of Practice measure and verify performance and improvement

Component Management — CoEs / CoPs

OEMS Governance

MSP Operation

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Key Parts of the OE Framework Tools and Support for Implementation

Information Management:

Storage, management and control of OE documents.

Data Management:

Data definitions and procedures to capture, manage and communicate OE performance data.

Competency Management:

Identification, recruitment, development and maintenance of people with OE knowledge and skills.

Technology Management (OE Focus Areas/HES ITGB):

Identification of future OE needs and finding/developing technology to meet the needs.

Enablers

Document Management

Data Management

Competency Management

Technology Management

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Dynamic Leaders

Skilled Employees

Learning and Innovation

World-Class Processes and Organization

Technology and Partnership

Recognition and Accountability

Key Parts of the OE Framework Organizational Capability

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Key Parts of the OE Framework OEMS and Leadership Accountability

Leader accountabilities and behaviors for running the OEMS:

● Executives--Lead, Align and Cascade OE

● Managers--Lead OE Management System Process

● Supervisors--Lead Execution of OE Processes

Leader accountabilities and behaviors for enabling OE performance, all leaders:

● Require Operational Discipline,

● Reinforce OE Culture,

● Comply with OE Requirements


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HES Risk Management A Case Study*

Historical Approach

No standard approach to HES risk assessment; understanding of risk varied

Inconsistent application of available tools; HES risks were not systematically identified, leaving some unmitigated or overstated

No overall picture of HES risk importance; resources were not prioritized appropriately

Limited mechanisms in place to ensure closure of recommendations; liability issues

Case study was created from general history of such facilities across the industry and no particular company or facility is represented

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Chevron’s Risk Management The Process

Provides a standard Corporate framework and approach for HES risk management

Meets OE expectations related to HES risk at the Corporate level

Standardizes risk assessment procedures while providing implementation flexibility at the organizational level

Provides governance for risk management activities to ensure closure of HES risk reduction action items

Applies to all facilities, activities and projects within Chevron’s “operational control”

Drives quality and sustainability through dedication resources with a Risk Management Center of Excellence

HES Risk Management

Standard Process

Purpose, Objectives and

Scope

Procedure (RiskMan2) Resources, Roles, and

Requirements Measurement

and Verification

Continual Improvement

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Chevron’s Risk Management Process Requirements

1. Undertake periodic HES risk assessments of existing facilities, activities and capital projects.

2. Follow the RiskMan2 Procedure:

3. Maintain and implement a plan for conducting assessments consistent with the implementation plan.

4. Maintain and implement a HES risk reduction plan and document closure of recommendations.

5. Revalidate assessments, at a minimum, every 5 years.

6. Provide representative HES risk assessment documentation to the Center of Excellence – HES Risk Management for quality assurance review.

7. Submit an annual summary report.

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Chevron’s Risk Management Features of the RiskMan2 Procedure

Integrates health, environment and safety

Provides a qualitative HES Risk Prioritization Matrix

Establishes quantitative (safety) risk tolerance criteria

Mandates closure of risk reduction action items

Integrates existing risk assessment tools

Provides for identification and prioritization of environmental aspects, reputation and social risks

Used only with the assistance of a trained member of the Center of Excellence

Sub- Procedure 1

Sub- Procedure 2

Sub- Procedure 3

Sub- Procedure 4

Sub- Procedure 5

Identify, Group and Prioritize Facilities and/or Activities

Perform High Level Risk Assessment (Integrated HAZID)

Perform Further Risk Assessments as Required

Develop Risk Reduction Plan and Document Closure

Periodically Revalidate RiskMan2 Assessments

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HES Risk Management RiskMan2 Example – Onshore Oil Facility

Known Risks

H2S

Facility Age

Inconsistent HES Procedures

Produced Water Management

Results of RiskMan2 Assessment

HES risks related to sour operation and environmental management practices

Recommendation to accelerate planned facility upgrades (flare system, control room)

Recommendation to accelerate produced water handling system upgrade

Gap closure on HES procedures should be a key focus item

● Management of Change

● Managing Safe Work

● Motor Vehicle Safety

Additional environmental background studies and Hazard and Operability (HAZOP) sub-procedure 3

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HES Risk Management RiskMan2 Example – Offshore Platform

Known Risks

Explosion / Fire

Riser Failure

Blowout / Major Spill

Hurricane

Helicopter Accidents

Results of RiskMan2 Assessment

Major events (fire/rise failure) have severe consequences but low risk given the many safeguards in place

Identified lower consequence but higher likelihood health risk (brown recluse spider)

Hurricanes present a high asset risk but lower HES risk due to safeguards in place

Uncertainty in explosion potential requires blast analysis (sub-procedure 3)

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Implementation What Does It Really Take?

1. Clear Governance: Decide how decisions will be

made up front

Put a framework in place early

2. Information Management: Document organization

Use of technology to electronically store documents and tools

3. Content:

How will you determine what is “best?”

4. Compliance Assurance

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Implementation Lessons Human Response to Change

Denial

Anger

Bargaining

Fear

Depression

Exploration

Acceptance

Time

Em

oti

on

al R

esp

on

se

Active

P

assiv

e

Adapted from: Dr. E. Kubler-Ross - “On Death and Dying”

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Implementations Lessons Learned The Top 10

1. Leadership Commitment!

2. Recognize that it takes time. Don’t under estimate the change management piece

3. Consider your Framework

4. Focus on your critical few based on risk

5. Benchmark – internal and external

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Implementations Lessons Learned The Top 10

6. Be cognizant that management systems should target leaders and managers

7. Stay the Course; it’s a long term strategy

8. Develop, Deploy, Stabilize then Optimize

9. Factor in the Human Response to Change

10. Pay attention to words and define key terms

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What’s Next?

Workshops tomorrow (Pre-registered participants only)

8:00am – 12:15pm, Rooms 311E-G

A: Leading-Edge Management: Leading

Indicators and Risk Management (311E) (Technical Session 81)

B: World-Class Leadership:

Lead with Safety (311F) (Technical Session 82)

C: Driving EHS Performance:

Effective System Implementation (311G) (Technical Session 83)

Documents

A transformative force in EHS - The Campbell Institute · role in a variety of planned SH&E activities on a regular basis. All levels of Mgmt are able to explain the business case