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2012 CEOs Who 'Get It'

February 1, 2012

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Rick Frost

CEO
Louisiana-Pacific Corp.

Why is safety a core value at your company

Rick Frost: When I got out of high school in 1969 at the age of 17, I went offshore to work on the oil rigs in the Gulf of Mexico. In my five years out there, a boss of mine was killed and a co-worker lost his leg at the thigh. Neither incident had to happen. They were tragic and unnecessary. I decided that if I was ever in a position to be able to affect occupational safety in a big way, I would. Working in logging, woods and manufacturing facilities for the next 20 years helped me observe that most safety incidents are “practiced” many times before they occur. That means they can be avoided.

We firmly believe that no one should have to get hurt while working at LP. A core value guides your thoughts, actions and behavior no matter if you are at home or at work. So with us, safety is a core value. It is a constant, not an option. It’s also not a priority on a list with other things. Priorities shift based on the task at hand, and if you’re not careful, you can find yourself in a place where you’ve put production over safety if all you consider safety to be is a priority.

How do you measure safety?

We were like everyone else a decade ago and measured lost workday cases. We then moved to TIR. Now, with our overall goal being to get to zero recordables as a company for the year, we measure a lot of things. We track and celebrate safe work-hour milestones at our plants in 250,000 incident-free increments. That used to be hard, but now we have plants chasing 1 million hours without a recordable and three have made it.

We use both leading and lagging indicators and, in the last few years, developed an environmental, health and safety dashboard that tracks EHS-related recommendations; safety climate; and the environmental climate at the plant, business unit and company as a whole. This looks at everything from supervisor accountability to compliance.

We also require each manufacturing location to complete a safety management system assessment annually to identify best practices and opportunities for improvement. The opportunities identified then become the goals for the next year.

We have added tracking, reporting and investigating near misses. That has really helped stop the process of “practicing accidents.”

Describe your journey to becoming a CEO who “gets it.”

As I previously described, my journey began on oil rigs in the Gulf of Mexico.

Today, I’m guided by three beliefs:

  1. All incidents can be avoided.
  2. It’s easy to have principles, but you don’t really know if you have them until they cost you something.
  3. Your calendar is evidence of your commitment.

Two events in my time at LP stick out. The first was around a zero-tolerance position we had on lockout/tagout. We had a great mill manager who violated LOTO, just trying to help his folks out. We had to let him go to be consistent and wipe out the idea of “Do as I say, not as I do.” Was it harsh? Yes. Was it the right decision? Absolutely. Did it get everyone’s attention that we were serious about safety? You bet.

Four or five years later, our TIR had improved from double digits to about 2.5; we were pretty good, but not improving. We had three unrelated recordables across our manufacturing system of 35 mills in one week. I directed our entire system to be shut down for a half-day and that those incidents be discussed at all mills with all of the people. I estimated the cost of that decision to be $1 million.

That afternoon, I got a call from a mill manager who inquired why I forced him to shut his mill down when they did not have an incident. I told him that he might not realize it, but that I had given him a huge gift. From that point forward, he would never have to wonder if safety really was more important than production, and that he had demonstrated proof of that to all of his people. We did a similar stand-down again recently with a TIR of 0.44. You see, we are after zero incidents. Having only a few is not good enough.

How do you instill a sense of safety in your employees on an ongoing basis?

It’s a cliché, but it all starts at the top. The head of an organization has to be committed to the belief that all safety incidents can be prevented and a zero-incident workplace is not only desirable but achievable.

When we decided to get serious about acting on the belief that no one should have to get hurt while working at LP, we had a double-digit total incident rate. We started all of our meetings, including our Board of Directors, with safety. And then we systematically dissected the components of a safe work environment – guarding, safe operating procedures for everything, personal protective equipment, lockout/tagout, and on and on.

We religiously investigated every recordable to root cause. We included safety in our management-level performance management system. We let people go who would not commit – from mill managers to hourly employees. We continue to investigate every recordable and near miss to root cause. When you do that, you discover the things you could have done differently and better to avoid the incident. Those learnings become the source for continuous improvement in behavior and in your programs.

Every meeting at LP, no matter the topic or focus, from senior management through plant-level meetings and conference calls, starts with a short safety topic. This sends a powerful message that safety always comes first.

We celebrate and make a big deal about successes, too. Our senior management team, including me as CEO, personally cooks dinner for mills when they reach certain safety milestones. We have continued these celebrations even during the market downturn.

What is the biggest obstacle to safety in your workplace, and how do you work to overcome it?

I don’t think there are any obstacles to safety left at LP. It is now cultural, but we still mess up.

When you get pretty good at something, you do have a tendency to become complacent or start thinking you have it knocked. Safety doesn’t work that way.

People will get distracted or act in a hurry. We will run into things for which we don’t have a safety procedure. We will use the wrong tool for the job or put our appendages where they don’t belong. But those are fewer all the time.

We continue to recognize and celebrate successes. This sends a strong message that no matter what the external factors are, we will maintain our safety and health efforts.

Another thing we’ve found effective is focusing on known high-risk periods. For instance, we developed a 100 Days of Summer emphasis because there are a lot of distractions during the summer. Each mill identifies specific emphasis programs during this time to maintain focus.

Communication also can be a major issue. To address this, each business conducts either weekly or biweekly conference calls involving the plant managers and safety managers at each location, as well as their corporate business and safety leadership. Current issues, trends, opportunities and near misses are discussed on these calls. It is not uncommon to also have plant safety committee members sit in on these calls.

How does safety “pay” at your company?

The rewards for safety at LP are multiple. The obvious is the huge reduction in workers’ compensation costs. The obvious reward to the employees is they go home to their families each day with all of their body parts intact. But those are probably the smallest benefits.

The attention to detail that it takes to keep thousands of people working safely every day is the same attention to detail that it takes to produce excellent product quality – or have stellar preventive maintenance on equipment. Safety promotes teamwork as people work together to look out for each other. And success instills a huge sense of pride in self, in the facility and in the company.

How important is off-the-job safety to your company’s overall safety program? What type of off-the-job safety program does your company offer to employees?

We have a lot of safety meetings at LP. Probably half of the topics now pertain to off-the-job safety. We send health and safety newsletters home to the families. As safety became cultural at LP, employees began to take it home. Employees often tell us about the positive impact that the LP safety culture has on their home life. It becomes a part of who they are.

For the last couple of years, we also have driven wellness programs geared toward creating and maintaining healthy lifestyles for our employees and their families. These programs continue to have a positive impact on our employees’ overall health and safety.

Louisiana-Pacific Corp. is a leading manufacturer of quality-engineered wood building materials, including OSB; structural framing products; and exterior siding for use in residential, industrial and light commercial construction. Louisiana-Pacific Corp. has manufacturing facilities in the United States, Canada, Chile and Brazil.

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