Transforming Safety Culture Saves Organization $100M

Business Insurance Print Version

May 7, 2014

Using the language of retail rather than risk management and applying tools not usually used in risk management to aspects of its stores' business, supermarket chain Safeway Inc. has created a "Culture of Safety" program that is saving the company millions in workers compensation and general liability costs while offering it a competitive advantage.

The Culture of Safety, an internally branded product at Pleasanton, CA-based Safeway Inc. with its own logo, has been in place for more than five years after being developed to reduce workers compensation and general liability costs.

"What it's turned into is the largest cultural transformation at Safeway in 17 or 18 years," said Ward Ching, Safeway's vice president of risk management operations, who developed the program at the direction of William M. Zachry, Safeway's vice president of risk management.

"I hired (Ching) originally when I got into this role as a consultant to figure out what do we do to develop a culture of safety," Zachry said.

The exercise involved combining behavioral economics with behavior-based safety, Ching said, "adding in some big data analytics and some Six Sigma to transform workers compensation and general liability into a retail issue."

"As the store is operating on a day-in and day-out basis, there are hundreds of thousands of behaviors that contribute to its success," Ching said. His work sought to identify behaviors that detract from that success and find ways to change them. Reducing accidents, Ching said, is "all about the behaviors, it's not about the equipment."

The Culture of Safety program that was created includes tools and incentives that company leaders can use to encourage and support store managers in the safety effort. It also assigned day-to-day responsibility for safety at each store to the assistant manager.

Perhaps the strongest tool that was created was a method for employee-to-employee or supervisor-to-employee observation of safe behaviors through which employees or supervisors can use a form to formally note safe activity.

"They are praising each other for what's right. Weekly, we generate approximately 110,000 to 120,000 positive observations," Ching said.

"We think we're the only one doing the positive observation program like this," Zachry said. "The unions, by the way, love it because it's not negative, it fosters the relationships, and we're not beating people up for having done something, we're encouraging the right behavior from the beginning."

The Culture of Safety also has given Safeway a clearer window into recognizing issues or developments at stores before they become safety problems.

"I can use that information to see things in the organization that nobody else can see," Ching said. "We have a way of seeing when things are happening, when they're trending before they actually happen." That allows risk management to take steps to change a process before an accident occurs.

And using the Six Sigma System Control Analysis technique to examine Safeway as a system allows Ching to determine which efforts to influence behaviors are succeeding and which are not.

Ching estimated the Culture of Safety program has saved Safeway $100 million in direct costs over four years.

"Our frequency rates, we believe, are better than our competitors'," he said. "We know it's much lower than the industry average, and we believe that is a competitive advantage."

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