Despite opportunities for potent compound safety initiatives to contribute to the overall financial performance of an organization, often these initiatives are viewed as just activities and a cost to the organization. These initiatives are not viewed as a potential source of increased revenue or efficiencies. Unfortunately, this view is often created by the environmental, health and safety (EHS) professionals themselves failing to think strategically about new potent compound safety initiatives, and how they add value to the organization and fit into the overall business strategy. Hence, the connections between proactive potent compound safety initiatives and superior business performance are often not made by internal and external stakeholders.
The purpose of this article is to strengthen your understanding of the connection between strategic potent compound safety initiatives and business performance so that you may achieve “Superior Potent Compound Safety Performance” in what you do each day.
While the definition of “Superior Potent Compound Safety Performance” will vary from company to company, one thing that remains certain is that superior potent compound safety performance can only be achieved when it adds value to the organization, and value can only be created when potent compound safety strategies are aligned with business strategies. In order to align these strategies, potent compound safety initiatives must be identified, measured, and communicated.
Donald J. Reed, formerly with the World Resources Institute, once categorized four major ways in which the environment can contribute to core business strategies. These four ways can easily transfer over to potent company safety initiatives and include:
Additionally, these four ways can be placed into two separate categories—either cost-reduction or revenue generating initiatives. A robust potent compound safety strategy will have a combination of these two categories. Strategies that are too focus on one category or the other are out of balance and will be open to criticism.
Environmental, health and safety professionals are all too familiar with the ongoing pressures to reduce costs. Traditionally, mandated cost reductions have occurred in areas such as reductions in head-count, travel restrictions, or elimination of spending on conferences and external seminars. Unfortunately, cost reduction strategies are often done in a panic, leading to hasty unilateral decisions without considering the long-term impact to the business. In the context of strategic potent compound safety initiatives, cost reductions can also occur by reducing operational risk and improving efficiencies that are sustainable throughout the growth of the organization.
Reducing operational risk is generally thought of as a cost-reduction strategy. However, in order for this to be considered strategic, these activities need to be thought of in a much broader context than just reducing the risk of employee exposures or maintaining compliance with regulatory requirements. In this broader context, reducing operational risk needs to be customer-focused and can also be thought of as reducing the potential for cross-product contamination, product recalls, and delays in product launches. These are the types of events that can be extremely costly to a company. In addition, these types of events are much easier to quantify than the accident that never happened or the regulatory citation that never occurred.
Changing processes to improve efficiency and reduce wastes can also be thought is cost-reduction strategy. Examples of improved efficiencies and waste reductions include the following:
Revenue generating strategies are those activities that contribute to the top-line of the profit and loss statement. As indicated above, these strategies can be categorized into either establishing new or improving existing services to increase competitive advantage, or establishing new markets that reposition the company. The importance of creating top-line strategies cannot be overstated. Several years ago, I was at a conference workshop where one of the attendees stated, “Talk to the CEO about decreasing costs and their eyes roll in the back of their head, but talk to them about increased top-line revenue and their eyes light up. They want to hear more.”
Several examples of potent compound safety strategies that create top-line increases include the following:
Measurement is an essential component of any strategy. If you can’t measure your progress in potent compound safety, how will you know if you are achieving superior performance? Prior to developing and implementing any potent compound safety initiative, environmental, health and safety professionals should ask themselves what metrics they are going to use to measure performance. You should avoid proposing initiatives that are un-measureable – these are just a setup for failure. However, when establishing metrics it is important that the metrics are in terms familiar to the executive management team at the company. For example, the old but familiar term to environmental, health and safety professionals is their OSHA recordable rate. For the majority of the executive management team, this may not be a familiar concept. Try to reframe this metric into monetary terms and lost hours of production. These are the terms that management will understand.
As you may know, since the early 1990’s many large corporations have been producing corporate environmental, health and safety reports. These reports have evolved from just discussing EHS issues to now discussing sustainability and corporate responsibility issues. If you work for a large corporation, you should review your most current report and see how strategic potent compound safety initiatives may fit into these reports. Even for smaller companies, it would be wise for the EHS professional at the facility to review several of these reports to get an idea on how they measure EHS performance. You can then take those ideas and integrate them into your potent compound safety program.
In order for any strategy to be effective, both the strategy and its results must be communicated. Companies must show the connection between potent compound safety strategies and margins, markets, and organizational growth. This will require four critical communication needs:
Today’s life science companies have new opportunities to realize financial value from strategic potent compound safety initiatives. Environmental, health and safety professionals need to develop a strategy to achieve superior potent compound safety performance. This strategy needs to be a balanced one that has both cost reducing and revenue increasing initiatives. This strategy should also be customer-focused. Once the strategy has been developed and implemented, it needs to be measured and communicated to appropriate stakeholders in terms that are familiar to their role. Do not assume that your executive management team will automatically have the right information. It is up to you to ensure that it is communicated.
Potent compound safety initiatives should be thought of in a strategic manner, not just as cost-only or compliance-only activities.
Dean Calhoun is an American Board of Industrial Hygiene Certified Industrial Hygienist (CIH). He has been an environmental health and safety professional for over 37 years.
Prior to starting Affygility Solutions, Dean was the Associate Director of Environmental Health and Safety for Gilead Sciences, Inc., a biopharmaceutical company focused on developing pharmaceuticals for infectious, viral, and oncology applications. His experiences including development and implementation of global EHS guidelines, implementation and coordination of an executive management EHS Steering Committee, establishment of occupational exposure limits for pharmaceutical active ingredients, industrial hygiene program management, and EH&S auditing of research, manufacturing and contract manufacturing facilities.
Dean has spoken for a number of professional organizations including the U.S. Environment Protection Agency, the Colorado Safety Association, the Bay Area Environmental Safety Group, the National Association for Environmental Management, the National Safety Council, the Occupational Safety and Health Administration, and the American Industrial Hygiene Association.
Dean graduated with a Bachelor of Science degree in Engineering from the University of Wyoming and has dual master degrees in Environmental Policy and Management, and Technology Management from the University of Denver. He is a member of AIHA, ASSE, and NAEM.
Dean can be followed on Twitter: @affygility.