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2011 CEOs Who 'Get It'

January 27, 2011

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John B. Hess

Chairman & CEO
Hess Corp.


Hess Corp., headquartered in New York, is a leading global independent energy company engaged in the exploration for and production of crude oil and natural gas, as well as in refining and marketing refined petroleum products, natural gas, and electricity. Hess has 13,300 employees.

Why is safety a core value at your company?

Safety is essential to the very purpose of our company: to be the most trusted energy partner in the world. We simply have to continue to strive for safe and incident-free operations – everywhere, every day and for all the right reasons.

We believe companies are judged not only by business results but how they achieve them. Operational excellence is a key enabler to success for us, and safety is the cornerstone of operational excellence. We want each person who works for us to return home safe every day from our operations in the 20 countries where we do business. We owe this outcome to our people, our partners and the communities where we operate.

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

We rely on an integrated approach to strengthen and sustain a culture of safety excellence. This plan starts with leaders who visibly support and advance the culture.

We have integrated our expectations for safe operations into our corporate values, code of business conduct and ethics, and policies and management systems. Ownership and accountability for achieving these expectations lies with our operations personnel. 

We track and report our progress against targets and strive for continuous improvement. By being very transparent regarding our performance, we encourage the commitment of our workforce to build a culture of safety excellence. 

We actively seek ways to improve. For example, while we believe we have extremely high performance requirements for the safety and integrity of drilling operations, we and our industry need to do all we can to learn from the 2010 crisis in the Gulf of Mexico and take all necessary precautions to reduce the likelihood that such a tragedy happens again.

In addition to working consistently to improve our safety performance, we make it a priority to celebrate our successes.

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

While we have not yet reached our ultimate objective of zero incidents, we have made significant progress in the past decade toward building our safety culture and improving safety performance. I am very proud of our people for what they have achieved.

The biggest challenge I see is sustaining momentum and avoiding complacency. I think we do that by continually building awareness, communicating about the importance of safety, and recognizing progress and success. We use companywide recognition programs such as the Chairman's Award for Safety Excellence, the President's Awards for Safety Excellence and Global Safety Appreciation Day to highlight achievements. Our communications include video messages to the workforce from me and from the presidents of our Exploration & Production and Marketing & Refining divisions; frequent articles published on our company intranet site that relate success in safety improvement; and transparent, high-quality reporting to the public through our annual Sustainability Report that includes coverage of our safety efforts.

How does safety "pay" at your company?

As the cornerstone of operational excellence – a precursor for business success – we see safety "pay" in several ways. Our business results are stronger when we have safe operations – costs are lower and asset reliability and workforce productivity are higher. Our license to operate in communities remains intact. Earnings and cash contributions improve. Our company reputation is protected and grows stronger. Our potential for growth increases. Leaders of businesses that are financially successful as well as safe and incident-free advance their careers. We tie employee compensation to performance against targets for leading and lagging safety metrics, and we consider safety competency and performance as we select and retain contractors. The more employees and contractors demonstrate sustainable safety excellence, the more successful they are financially.

The families and friends of those in our workforce see safety "pay" by having confidence their loved ones will return home safe every day for their most important job – being a responsible family member.

How do you measure safety? What are the leading indicators that show you how safe you are, and where do you see room for improvement?

Measurement is absolutely critical to improving safety performance. We measure safety using a mix of lagging metrics, which are outcome-based, and leading metrics, which are activity-based.
At the company leadership level, attention is focused on lagging metrics, which are more easily harmonized across our diverse businesses. Leadership also reviews process assurances that appropriate risk-based leading metrics are employed at the business and asset level. Performance on leading indicator metrics is the major focus at the asset level, where lagging indicators are monitored to ensure measured activities result in desired improvements.

Our metrics include work-related safety incident rates that measure the frequency of employee injuries and whether their injuries result in lost time from work. We also review these rates for contractors working at our assets. Other lagging metrics address operational and behavior failures, such as near-miss reporting and equipment integrity issues that don't result in injury.

We use a variety of leading metrics that depend on the specific business activities being conducted. Leading metrics may be very different for an offshore oil platform than for a retail gasoline station and convenience store. One example is the percentage of business leaders completing our in-house safety training courses. Another example is assessing whether safety reviews are routinely performed prior to maintenance work. Regardless of the measures used, our leading indicators relate to activities that lead to improvement in employee safety and hiring contractors that meet our expectations. Using these metrics is essential for reducing the likelihood of a catastrophic incident.
We still have the opportunity to find the right balance for the number of safety metrics we use. As with all metrics, having too many is just as bad as having too few. We continue to work on that.

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

It is critical. As one of our leaders put it, "Our employees believe that safety is a lifestyle." As we know, the behaviors and actions our people use in the workplace carry over to off-the-job behaviors and vice versa. That is why safety moments at the beginning of our meetings are just as likely to mention safety issues that are off the job as they are in the workplace.

We adhere to the philosophy that helping employees create a workplace that is safe also teaches them about off-the-job situations. That is reflected in the content of our programs and our communications about safety. Many of our safety training and competency programs have applicability off the job as well as on. For example, driving is the single most unsupervised activity that takes place in the energy industry. We have rigorous programs in driving safety and journey management at Hess. The practices taught through these programs get used not only in the workplace, but off the job as well.

Finally, a number of our employees are involved in community activities where they teach children or community residents about safety, and that frequently gets discussed at the dinner table at night so the whole family benefits.

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