Safety as a value driver – 6 steps to start the journey

In the excitement of starting or growing a company, safety can sit in the margins. It has an image of downside scenarios and risk management that gets in the way of progressive entrepreneurial thinking.

We hear of companies encouraged to ‘fail fast’, which is fine so long as you don’t hurt anyone in the process.

How relevant is it, say, to a small app developer? The immediate safety risks may be small but the risks in the extended community may be quite different, as shown at the other end of the spectrum when a software bug brought down the first launch of the new Ariane 5 space rocket in 1996.

For small companies on a growth path, investors, customers and potential employees are paying more attention to their Environmental, Social and Governance (ESG) positions before making decisions in their favour. Safety plays a surprisingly big part in this, as it goes well beyond keeping an accident log and reporting associated days lost.

I’ve been working with Stuart and Neil at Origin Safety to explore where else safety can impact ESG and the business prospects of emerging companies.

In the ESG landscape, we extended our thinking to the environmental element through accidental discharges and detrimental waste management. In the social part, we see customer safety through their use of the product or service, and also the community aspects of operations on things like traffic. Of course there will always be the health and safety measures taken for employees, contractors, suppliers and visitors. Under the governance umbrella comes the company’s risk management responsibilities that neatly tie it all up into policies, procedures and controls.

Looking at this from the small company perspective, we came up with six features any company could aim for, to be on track towards being demonstrably safe.

• Commitment from senior management – like so many of these things, if the leadership doesn’t lead, the rest of the company will do something else.
• Understand your risks and prioritise them – with so much going on in a growing company it’s impossible to do everything at once. Project management standards advocate assessment of impact and probability, a bit like the materiality assessment I wrote about recently. Add in a clear view of the potential outcomes to focus on those things that can make a real difference.
• Recognise the benefits case – establishing an effective Safety Management System (SMS) doesn’t come free, so it’s important to build the business case for taking action, and use this when talking to stakeholders so they see the upsides, as well as trying to understand the basics of minimising negative outcomes.
• Adopt processes and procedures aligned with established standards – it’s easier to persuade stakeholders about doing the right things if there are already recognised paths for them. Better to focus on the ‘why’, rather than spending time having to explain the ‘how’ part of the picture.
• Appoint a nominated accountable person – focus is an important asset, not only internally for the team but for external stakeholders to understand that the topic is controlled and consistent, and that the terms of their duties are documented and operating as intended.
• Communicate – to influence potential investors, customers or staff in the company’s favour it’s essential to convey the value of doing safety properly. Like so many other parts of corporate disclosure, it should be consistent, relevant, and if possible forward looking to explain evolving preventative measures, as well as reporting historical events.

Safety is a cultural thing that goes beyond a set of disciplines and procedures. It can be relegated to being ‘wise after the event’ or relying on ‘lessons learned’ processes but that doesn’t cover the breadth of the opportunity. A few steps taken early and woven into the company’s DNA will reduce the likelihood of Ariane-like events being repeated. Done well, a SMS is a powerful asset in creating trust and competitive advantage – the earlier it’s embedded in your journey, the easier it will be to recognise its true added value.

There are tools and support available to help explore this topic further, such as SARS and ICAO, or alternatively, talk to Origin Safety or to me at First Thirty using phil@first-thirty.com