ROSA TENGVALL SAFETY LEADERSHIP ASSESSMENT AND IMPLEMENTATION OF SAFETY CULTURE TRANSFORMATION CONCEPT Master’s thesis Examiner: professor Jouni Kivistö- Rahnasto The examiner and topic of the thesis were approved by the Council of the Faculty of Engineering Sciences on August 2016 i ABSTRACT ROSA TENGVALL: Safety Leadership assessment and implementation of Safety culture transformation concept Tampere University of Technology Master of Science Thesis, 95 pages, 0 Appendix pages August 2016 Master’s Degree Program in Materials Science Major: Industrial Management Examiner: Professor Jouni Kivistö-Rahnasto Keywords: Safety leadership, Safety culture, Management of Change, Safety management, Key performance indicator Safety performance is driven by leadership in the organization. The leaders translate the company’s safety vision into concrete safety actions and procedures in the facilities and in daily work. Safety vision is integrated to the Key performance indicators, yet the full knowledge of the benefits of safety to the employees and to the company is seldom com- pletely understood. Company’s safety culture is built on the safe working practices, be- havior and competence of all employees. HSE statistics shows that still the majority of incidents occur as a consequence of unintentional or intentional violations of safe working practices and not as a consequence of lacking safety procedures. This underlines the im- portance of behaviors and attitudes in development of safe working culture. Safety lead- ership is therefore the key to true Safety culture transformation in the organization. The aim of this thesis is to provide a training concept for future Safety leaders and help them to enable a sustainable Health, Safety and Environmental cultural transformation of safety by choice and not by chance. The main goal of the concept is to develop Safety leadership competencies of line managers and create commitment, ownership and ac- countability across the organization. The concept harnesses the managers with tools that help them to improve the safety performance and safety culture of their facilities and provides information and support for leading successful change. The concept builds on theoretical framework and case studies. The theoretical framework introduces theories of Safety culture, Safety Leadership and Management of Change but also tools to measure and analyze safety performance. The concept is constructed to two modules for General Managers and HSE managers. The first module is for General Managers and includes training on leadership and culture change, provides tools to improve safety and supports drafting of the HSE strategic plan. The second module is designed for HSE managers and includes training on HSE culture and tools to improve it, introduces the challenges managers might face in this culture change and discusses the roles and responsibilities HSE managers have in this change. This thesis also acts as an additional information of the topic to managers participating in the concept. ii TIIVISTELMÄ ROSA TENGVALL: Turvallisuusjohtaminen ja turvallisuuskulttuurin muutoskon- septin implementointi Tampereen teknillinen yliopisto Diplomityö, 95 sivua, 0 liitesivua Elokuu 2016 Materiaalitekniikan koulutusohjelma Pääaine: Tuotantotalous Tarkastaja: professori Jouni Kivistö-Rahnasto Avainsanat: Turvallisuusjohtaminen, turvallisuuskulttuuri, muutosjohtaminen, tur- vallisuuden mittaaminen Yrityksen turvallisuuskulttuuri heijastaa organisaation normeja, perusarvoja, olettamuk- sia sekä odotuksia, jotka sisältyvät yrityksen toimintaperiaatteisiin. Turvallisuuskulttuu- riin vaikuttaa erityisesti yrityksen työntekijöiden tapa toimia ja työskennellä, heidän käyt- täytymisensä sekä pätevyys. Turvallisuusjohtamisella ohjataan yrityksen toimintatapoja haluttuun suuntaan. Näin ollen hyvän turvallisuusjohtamisen tärkeimpänä lähtökohtana tulisi olla turvallisuuskulttuurin kehittäminen. Johdon sitoutuminen turvallisuuteen hei- jastuu suoraan henkilöstön sitoutumiseen ja sitä kautta vaikuttaa suoraan yrityksen tur- vallisuuskulttuuriin. Yrityksen johto on siis avainasemassa kehitettäessä yrityksen turval- lisuuskulttuuria parempaan suuntaan. Tämän työn tavoitteena on suunnitella yrityksen turvallisuusjohtajille suunnattu koulu- tuskonsepti, jonka avulla he saavat ohjattua yrityksen turvallisuuskulttuuria suuntaan, jossa turvallinen työskentely kuuluu yrityksen perustoimintaperiaatteisiin. Konseptin päätavoitteena on kehittää johtajien turvallisuusjohtamistaitoja ja näin ollen turvata kes- tävä muutos parempaan yrityksen turvallisuuskulttuurissa. Johtamistaitojen lisäksi kon- septi esittelee useita työkaluja turvallisuuden mittaamiseen sekä muutoksenhallintaan. Konseptin suunnittelussa hyödynnetään laajaa teoriakatsausta sekä yrityksen aiempien turvallisuuskulttuurin muutosprojektien tuloksia. Koulutuskonsepti rakennetaan kahteen eri moduuliin, joista ensimmäinen on suunnattu yrityksen tehtaanjohtajille ja aluejohta- jille. Tämä moduuli keskittyy turvallisuusjohtamisen kehittämiseen, turvallisuuskulttuu- rin muutokseen sekä strategian valmisteluun. Toinen moduuli on suunnattu työturvalli- suusasiantuntijoille. Tämä moduuli painottuu muutosjohtamiseen sekä konkreettisiin työ- kaluihin, kuinka yrityksen turvallisuutta voidaan mitata, parantaa sekä seurata. iii PREFACE It all started with seeing this incredibly smudged ex-white Teekkaricap in the marketplace of my hometown Kuopio. Naturally the first thought was “Ew, what is that?” The second, How do I get one? This event triggered a cascade of insanely interesting and amazing times of my life. Being part of the Teekkari-culture, experiencing the five-days-no-nights, the endless joys of studying with friends and learning new things have so far being the most educating and fun experiences of my 24-year-old history. Special thanks for these experiences go to my nearest and dearest friends, the AK/C-musketeers and all the other Teekkarit that have been part of my student life. But no fun lasts forever. It gets even better! This was proven by Juha Huhtinen who offered me a chance to work in ABB and realize in practice the learnings from TUT. Thanks to him, I have had the chance to do the most interesting work that a young student can hope for. Also this thesis have been unaccepta- bly inspirational and fun to work on. But I could not have done this without my colleagues in the US. Special thanks to my Grand Master Ed Stephens for help, support and all the good times in the late-afternoon Skype-meetings and to Marta Golden for steering us in the right direction. Compliments also to my other colleagues in ABB for preventing me to hit the bottom of the Sine wave and instead having a great time in the office. So this is it. Is it? Definitely not. The graduation and the MSc-title is just the first mile- stone that my supervising Professor Jouni Kivistö-Rahnasto will grant me in this journey. Finally I can spread my wings and with the support from my family experience the winds of the world. I just can’t wait! th Helsinki the 14 of June, 2016 Rosa Tengvall iv CONTENTS 1. INTRODUCTION .................................................................................................... 1 2. THEORETICAL BACKGROUND .......................................................................... 3 2.1 Managing safety ............................................................................................. 3 2.1.1 Safety Management systems ............................................................ 4 2.1.2 Principles and demands of Safety Leadership ............................... 13 2.2 Safety culture................................................................................................ 21 2.2.1 Assessment of Safety culture ......................................................... 22 2.2.2 Models for Safety culture ............................................................... 24 2.3 Management of Change in Safety culture transformation ........................... 27 2.3.1 Strategies for cultural transformation ............................................ 28 2.3.2 Leading cultural change ................................................................. 33 2.4 Safety performance measurement and Tools ............................................... 39 2.4.1 Processes for measuring and sustenance of Safety ........................ 40 2.4.2 Key performance indicators of safety ............................................ 42 3. RESEARCH METHODOLOGY AND EXECUTION .......................................... 50 3.1 Target company and prior Safety development projects .............................. 50 3.2 Work tasks for concept construction ............................................................ 51 3.3 Development of Safety culture transformation concept ............................... 53 4. RESULTS ............................................................................................................... 57 4.1 Case Baldor .................................................................................................. 57 4.2 Case Phoenix ................................................................................................ 64 4.3 Safety culture transformation concept.......................................................... 68 4.4 Pilot results ................................................................................................... 73 5. DISCUSSION ......................................................................................................... 77 6. CONCLUSION ....................................................................................................... 79 REFERENCES ................................................................................................................ 81 v LIST OF FIGURES Figure 1 Theoretical framework .............................................................................. 2 Figure 2 Approaches for managing safety ............................................................... 4 Figure 3 Elements of organization's OHSMS .......................................................... 5 Figure 4 Gallagher's typology of OHSMSs ............................................................. 8 Figure 5 Full range leadership model .................................................................... 15 Figure 6 Link between safety inspiring, safety monitoring, safety learning ......... 19 Figure 7 Relationship between leadership, safety climate and safety ................... 19 Figure 8 Cooper's reciprocal safety culture model ................................................ 25 Figure 9 Safety culture model ................................................................................ 26 Figure 10 Change management methods ................................................................. 30 Figure 11 Comparison of Change management theories ......................................... 32 Figure 12 Logical Levels model .............................................................................. 39 Figure 13 Elements of an effective health and safety measurement process ........... 42 Figure 14 Process for setting KPI's for risk control systems ................................... 46 Figure 15 Work tasks and elements of the concept ................................................. 52 Figure 16 Requirements of the concept ................................................................... 53 Figure 17 Baldor's safety performance between Feb-12 and Jan-15 ....................... 58 Figure 18 Safety Survey........................................................................................... 59 Figure 19 Heat map of safety performance .............................................................. 60 Figure 20 Baldor's safety performance before and after safety program ................. 62 Figure 21 Baldor's safety performance between Feb-15 and Feb-16 ...................... 63 Figure 23 Phoenix's safety performance .................................................................. 67 Figure 24 Concept content results............................................................................ 69 Figure 25 Construction of the concept ..................................................................... 70 Figure 26 Module I for General Managers .............................................................. 72 Figure 27 Module II for HSE Managers .................................................................. 73 vi LIST OF TABLES Table 1 Description of ILO-OSH 2001 and OHSAS 18001 .................................. 6 Table 2 Ten safety management principles and system practices ........................ 10 Table 3 Implementation of OHSMS, different approaches .................................. 12 Table 4 Leadership styles and examples from research ....................................... 17 Table 5 Safety culture model dimensions and elements....................................... 27 Table 6 Methods for dealing with resistance to change ....................................... 35 Table 7 Cultural dimensions and modified approaches........................................ 38 Table 8 KPI's to measure the individual components of OHSMS ....................... 44 Table 9 Lead monitor indicators ........................................................................... 47 Table 10 Drive indicators ....................................................................................... 48 Table 11 Procedures from Case Baldor included in the new concept .................... 64 Table 12 Phoenix's HSE safety improvement programs and trainings .................. 66 Table 13 Pilot questionnaire results........................................................................ 75 1 1. INTRODUCTION Safety performance is driven by leadership in the organization. The leaders translate the company’s safety vision into how safety can actually be executed in the facilities and in daily work. Safety vision is integrated to the Key performance indicators, yet the full knowledge of the benefits of safety to the employees and to the company is seldom com- pletely understood. Company’s safety culture is built on the safe working practices, be- havior and competence of all employees. HSE statistics shows that still the majority of incidents occur as a consequence of unintentional or intentional violations of safe working practices and not as a consequence of lacking safety procedures. This underlines the im- portance of behaviors and attitudes in development of safe working culture. Safety lead- ership is therefore the key to the true Safety culture transformation in the organization. The aim of this thesis is to provide a training concept for future Safety leaders and help them to enable a sustainable Health, Safety and Environmental cultural transformation of safety by choice not by chance. The main goal of the concept is to develop Safety leader- ship competencies of line managers and create commitment, ownership and accountabil- ity across the organization. The concept harnesses managers with tools that help them to improve the safety performance of their facilities and provides information and support for leaders to manage change. The concept is built on theoretical framework and case studies from previous safety improvement projects in the target company. Since the scope of this research is in the creation of Safety culture transformation concept, the theoretical framework of this study finds solutions for the following themes;  How to evaluate Leadership and its influence on safety performance  How to assess and measure Safety culture in facilities  What kind of tools provide help in Safety culture transformation  What is the role of Management of Change in Safety culture transformation 2 In Figure 1 the theories affecting the construction and design of the concept are intro- duced. Figure 1 Theoretical framework The main focus in the theoretical part is in the theories of Safety culture, Safety Leader- ship and Management of Change since they provide the main solutions for concept’s con- tent. The theoretical background of Safety management and Safety performance meas- urement and tools are also presented to be able provide the managers the tools to improve safety performance and safety culture in their facilities. Main Key performance indicators of safety are presented together with common safety processes used in technology com- panies. The second part of the thesis introduces the target company and the previous safety improvement projects executed in the company. The concept development starts with analyzing the case studies and creating the requirements for the concept. The re- quirements of the concept are derived from best practices used in the cases and infor- mation provided by theoretical framework. In the third part, the data from previous safety improvement projects are introduced to verify the methods used to improve safety as good practices. The final design and content of the concept is presented together with the execution and pilot plan. Importantly the content what was incorporated in the concept and why is discussed and evaluated in this part. Pilot is designed and executed to get feedback from the participants to further ana- lyze and improve the concept content and design. The practical and scientific contribution of the study is discussed throughout the discussion chapter and the possible improvements of the concept introduced in the results. 3 2. THEORETICAL BACKGROUND The scope of this research is to find applicable theories to support the safety culture trans- formation in the organization. To be able to understand what is safety, how to manage safety and essentially to improve the safety performance in the organization, many theo- ries must be analyzed and evaluated. The theoretical framework of this study finds solu- tions for the following themes;  How to evaluate Leadership and its influence on safety performance  How to assess and measure Safety culture in facilities  What kind of tools provide help in Safety culture transformation  What is the role of Management of Change in Safety culture transformation 2.1 Managing safety Managing safety is about protecting people, environment and assets but is also a contin- uous process of safety improvements (Heinrich et al. 1980; Visser 1998). Managing safety is based on two different approaches; Safety management and Safety leadership (Hämälainen & Anttila 2008). Safety management can be described as the “organized efforts and procedures for identifying workplace hazards and reducing accidents and ex- posure to harmful situations and substances. Safety management also includes training of personnel in accident prevention, accident response, emergency preparedness, and use of protective clothing and equipment”. (Businessdictionary). Safety leadership on the other hand is defined as a process of interaction between leaders and followers, through which leaders can exert their influence on followers to achieve organizational safety goals (White 2016). Traditionally safety improvement efforts have focused on the engineering aspects of safety. Unsafe mechanical or physical conditions are however responsible for relatively few accidents (10%) while the most accidents and injuries appears to result from employees’ unsafe acts. (Wilpert 1994) Also Pidgeon (1991) states that while hu- man errors does contribute to accidents, the behavioral causes of failure plays the bigger part when causes of the incidents are analyzed. Therefore, managing safety is about mas- tering the both aspects of Safety management and Safety leadership described in Figure 2.