Leading with Leading Indicators Health Physics Society July

Leading with Leading Indicators Health Physics Society July 2005 Spokane WA Tim Carter, V. P. Safety and Health Steve Prevette, Statistician Fluor Hanford http: //www. hanford. gov/safety/vpp/trend. htm Leading with Leading Indicators Health Physics Society, July 13, 2005

Introduction • Fluor Hanford is making use of leading indicators and statistical methodology to assist in safety • We have achieved significant safety improvements – 84% reduction in OSHA case rate from 1996 to 2005 • Use of leading indicators has correlated to a 30% reduction in OSHA case rate over past 18 months Leading with Leading Indicators Health Physics Society, July 13, 2005 2

Results Leading with Leading Indicators Health Physics Society, July 13, 2005 3

Leading Indicators • Use of Leading Indicators had a profound effect at Fluor • Increases visibility to safety and production processes • Requires understanding of leadership and how to use data • Will show examples and stories • Will also help you with theory and use Leading with Leading Indicators Health Physics Society, July 13, 2005 4

Leadership and Management • Leadership is a rare talent. • Leaders provide a vision that people willingly follow, believe in, and accomplish. • Leadership requires action, determining the right things to do. • Management involves doing things right. • Both management and leadership are necessary for success. Leading with Leading Indicators Health Physics Society, July 13, 2005 5

D. O. E. Voluntary Protection Program • Simply complying with regulations is not sufficient for continual improvement • VPP has helped to focus management and union efforts and teaming • Leading Indicators fit in with worksite analysis Leading with Leading Indicators Health Physics Society, July 13, 2005 6

Dr. Deming’s System of Profound Knowledge • Appreciation for a system – Interactions, – System interrelations and flow • Knowledge about variation – Statistical knowledge, – Control charting, – Variation, – Factual data Leading with Leading Indicators Health Physics Society, July 13, 2005 7

Dr. Deming’s System of Profound Knowledge • Theory of Knowledge – Knowledge is built upon theory – Theory provides the ability to predict – How people learn • Psychology – Understand people and their interactions, – Understand importance of intrinsic motivation Leading with Leading Indicators Health Physics Society, July 13, 2005 8

VPP and ISMS • The SOPK meshes well with VPP and the Integrated ES&H Management System • Good working history, back to the 1930’s • Old Ideas, New Applications • “There is no knowledge without theory” - Dr. Deming. Leading with Leading Indicators Health Physics Society, July 13, 2005 9

Trending • Statistical Process Control is used at Fluor Hanford - Standardized - Proven - Moves focus away from random noise -Trend detection Leading with Leading Indicators Health Physics Society, July 13, 2005 10

SPC Description • Data are plotted in time sequence • Baseline average (center line) is added • Upper and Lower Control Limits are added, 3 standard deviations above and below the average • UCL and LCL represent the expected range of variation in the data. • Variation outside this range is circled (other rules are used in addition) • See Appendix, and the “Hanford Trending Primer” at http: //www. hanford. gov/safety/vpp/trend. htm. Leading with Leading Indicators Health Physics Society, July 13, 2005 11

Common Trending Errors Error Typical Behavior Reaction Action Reacting to Ups and Downs (False Alarms) Comparisons point to point, to average, to last year Tampering and knee jerk reactions, frustration When stable, work on long term history, fix the system No criteria to Molehill Failure to grows into detect trend separate trend from noise Leading with Leading Indicators mountain Health Physics Society, July 13, 2005 Use SPC to detect trends accurately and in time 12

SPC Cost Savings Not only more reliable, but less expensive: • Can automate retrieval and processing of data • Saves time (15 seconds per chart update, 5 minutes per new chart) • Actual case – reduction of time needed for charts from 40 hours per month to 15 minutes per month • Quicker read by executives, better comprehension • Allows risk minimization • Becomes integral to business model Leading with Leading Indicators Health Physics Society, July 13, 2005 13

The Workers Know • Yes, the workers can understand do accept SPC, often times better than the managers Leading with Leading Indicators Health Physics Society, July 13, 2005 14

The Red Bead Experiment • Helps by providing a hands-on, emotional “a ha” experience • Fluor has script and video available, with ISMS focus • “Standard” management practices used, and then a better way shown • One hour with the Red Beads will accomplish more than years of discussion Leading with Leading Indicators Health Physics Society, July 13, 2005 15

Systems Thinking Would putting a Rolls-Royce engine in a Geo Metro make an improved automobile? Nothing wrong with either, but the combination probably won’t work (Russ Ackoff) Leading with Leading Indicators Health Physics Society, July 13, 2005 16

Systems Thinking Concepts • Pay attention to interactions more so than components • Knowledge of statistical variation more so than discrete numbers • Long term focus more so than short term • Cooperation more so than fear, blame and internal competition Leading with Leading Indicators Health Physics Society, July 13, 2005 17

Leadership is Needed • The control chart will help characterize the data. • Many times the data “will cry out” for action to be taken. • Leaders at all levels in the corporation must be willing to hear the cry, formulate the appropriate action, take the action, and determine the effect of the action. Leading with Leading Indicators Health Physics Society, July 13, 2005 18

Early Fluor Experience with Indicators • • • Annual Employee Training VPP survey 5 Hazardous Occupations No. of Indicators from 300 per month to 1, 600 Good comments in VPP reviews In 2000, OSHA rate “flat-lined” at 1. 5 cases per 200, 000 hours Leading with Leading Indicators Health Physics Society, July 13, 2005 19

Jump Start with Leading Indicators • Just what are leading indicators, anyway? Predictions of future? or A means to create a better future? Leading with Leading Indicators Health Physics Society, July 13, 2005 20

Creating a Better Future We have gotten distracted by calls to predict future, delaying development of leading indicators • At a low injury rate, little information exists in the outcome indicators • Trending response time long at these low rates • Use leading indicators to measure lower threshold data and activities • Quickens trend response, reduces injuries and improves outcomes Leading with Leading Indicators Health Physics Society, July 13, 2005 21

Our Current Leading Indicators • Events - First Aid Cases, Occurrences, Near Misses • Safety Inspections - Number and Score • Employee Input – Safety Concerns and Survey Responses • This list has changed, and will likely change as the need arises. • Statistical Process Control (SPC) is used. Leading with Leading Indicators Health Physics Society, July 13, 2005 22

Events Leading with Leading Indicators Health Physics Society, July 13, 2005 23

Safety Inspections Leading with Leading Indicators Health Physics Society, July 13, 2005 24

Employee Sentiment Leading with Leading Indicators Health Physics Society, July 13, 2005 25

Results • Five of the Seven Injury and Illness Leading Indicators showing significant improving trends • OSHA Recordable Case Rate has dropped 30% since start of use (Aug 03 – Apr 04 compared to May 04 – Jan 05) • Allows focus on doing the right things right Leading with Leading Indicators Health Physics Society, July 13, 2005 26

Correlations Note: Black line is OSHA Case Rate, Green line is the Leading Indicators Leading with Leading Indicators Health Physics Society, July 13, 2005 27

Correlations Leading with Leading Indicators Health Physics Society, July 13, 2005 28

Developing Your Indicators • Measures of Discipline (work process / planning) • Measures of Potential (near miss / first aid) • Measures of Background Noise (non-injury events) • Indicators of Employee Morale / Satisfaction / Concern • Prevention Activities (inspections / assessments) • Level of Effort (time / money devoted to safety and health activities) • Management Visibility. Leading with Leading Indicators Health Physics Society, July 13, 2005 29

A Color-Coded Dashboard • Integrated presentation • Combines the best of “balanced scorecard” with SPC • Better than rolling all data into one index • Allows a Systems Approach Leading with Leading Indicators Health Physics Society, July 13, 2005 30

Red Yellow and Green Control Decision Chart Result Stable Trend Color Leadership Action Level is Acceptable Green Stay the Course Level is Not Acceptable Yellow Improve System Adverse Red Corrective Action Improving Green Reinforce – Stay the Course Leading with Leading Indicators Health Physics Society, July 13, 2005 31

Use of “White” Addition of White to the dashboard can be advantageous: • Use White (or Yellow) for one month away from a trend • Use for stable at an okay level, but not superior • Minimizes some of the push to be “All Green” while allowing for opportunities for improvement Leading with Leading Indicators Health Physics Society, July 13, 2005 32

Leading with Leading Indicators Health Physics Society, July 13, 2005 33

Conclusion • Tools and methodologies such as Statistical Process Control, Systems Thinking, Surveys, and Leading indicators, • Can provide insight for decision making Leading with Leading Indicators Health Physics Society, July 13, 2005 34

Conclusion • Leading Indicators provide insight and focus for leaders • Allows managers, workers, and safety professionals work towards one future, to build the future • Moves management focus forward toward prevention Safety excellence is achievable, if you lead with leading indicators. Leading with Leading Indicators Health Physics Society, July 13, 2005 35