1. AMERICAN SOCIETY OF SAFETY ENGINEERS – ENERGY CORRIDOR LEVERAGING LEADING INDICATOR DATA TO TRANSFORM EH&S PERFORMANCE SEPTEMBER 10, 2015 1 Quincey Jones Senior Vice President Optimum Performance Solutions

2. AGENDA Challenges and Key Questions Client Patterns Review Client’s Corporate and Site Dashboards Role of the Safety Management System Developing & Implementing a Behavioral Culture Audit Protocol Our Leading Indicator Model Summary Question & Answer 2

3. CHALLENGES TO LEADING INDICATOR IMPLEMENTATION  Basic definition across industries remain inconsistent with some using leading, but also process, activities, upstream, heading, positive and predictive.  Lack of agreement on the definitional issues creates uncertainty and confusion for users interested in translating some of this conceptual knowledge into practice (Near miss – leading or lagging).  Raising the level of awareness about leading indicators among senior management.  Company executives most commonly ask, “How are leading indicators connected to actual EH&S performance on lagging indicators?” Is it based on statistical evidence?

4. LEADING/LAGGING INDICATORS Leading Indicators Lagging Indicators Cause Effect

5. KEY QUESTIONS Leveraging Leading Indicator Data 1.What does your leading indicator data reflect? 2.Are we safe or lucky? 3.How does your organization develop and implement leading indicators? 4.How is the implementation of leading indicators integrated into your continuous improvement process? 5.When are the leading indicators reexamined? 6.Are you utilizing statistical analysis? 7.Are you trending results? 8.Does your leading indicators contain a qualitative component?

6. CLIENT PATTERNS 1.Most corporate EH&S dashboards focus on lagging indicators.

7. OPTIMUM PERFORMANCE SOLUTIONS Client Dashboards

8. ROOT CAUSE ANALYSIS – NEAR MISS REPORTING

9. SITE EH&S LEADING INDICATORS Key Leading Indicators  Compliance Training Audits  Engagement Leadership Support Participation rate Job Assessments (Ergonomics, Risk Assessments)  Communication Shift reviews Safety concern status reviews Safety alerts/near miss communications  Recognition and Celebration Individual Group

10. SITE EH&S LEADING INDICATORS COMPLIANCE Training % PL’s provided TTR monthly on safety topics Sign in sheets turned into nurse Metric based on % employees trained Audits Hoist – daily check % Forklift – weekly Weekly Safety walks Machine guarding - monthly

11. CLIENT PATTERNS 2.By examining the corporate or site EH&S leading indicator dashboards, then talking methodology with the teams, we could not determine whether they were safe or lucky.

12. PREDICTOR OF SAFETY OUTCOMES Leadership’s Impact

13. PREDICTOR OF SAFETY OUTCOMES AT ALL LEVELS (EID,J., MEARNS, K, LARSSON,G., LABERS, J. & JOHNSON, B. 2012) Positively Correlated With the Degree of commitment to safety Quality of Leader’s Relationship To Other’s Quality of Leader’s Relationship To Other’s Perception of Leadership’s Commitment to Safety Leader’s Extent of Self Awareness

14. SAFETY EXCELLENCE REQUIRES Daily proactive intervention by: Line managers Supervisors This proactive intervention is usually a missing link that can only be corrected when the system holds managers, supervisors and executives accountable (Petersen 2000, 19).

15. LEADERSHIP CHANGE MODEL VisionLeadershipCULTURESafetyHuman Factors Productivity QualityCustomer Satisfaction

16. CLIENT PATTERNS 3.Most corporate dashboards did not contain any leadership indicators. The site dashboards contained some leadership indicators, however they were linked to a continuous improvement process.

17. EXAMPLE OF PERSONAL METRICS LINKAGE How Jody Trantham Visibly Makes A Difference: Attend and contribute to all safety meetings Witnesses JSA’s Performs safety walkthroughs Evaluate safety processes Encourage safety at all levels by leading through example Mar ’02Jan ‘03

18. CORPORATE LEVEL LEADING METRICS At the corporate level, we worked with some organizations that did track one or two leading metrics and they were: 1.Site visit protocol 2.Near Misses (e.g. with potential for serious injury or fatality) 3.Audits (e.g., trend audit scores, tracking overdue audit items, monitoring the speed of closing action items) 4.Noncompliance 5.Training (e.g., EHS training for workers, managers, executives)  Found corporate involvement with annual safety plan review and incident investigations to be successful

19. LINKING LEADING INDICATORS TO Cultural Maturity

20. CULTURAL MATURITY AND LEADING INDICATORS MODEL 2 4 6 8 4060 80 100 0 Total Recordable Rate Relative Culture Strength Reactive Dependent Independent Interdependent Benchmark Best Interdependent/Generative Help Others Conform Others’ Keeper Networking Contributor Care for Others Organizational Pride Independent/Proactive Personal Knowledge, Commitment, & Standards Internalization Personal Value Care for Self Practice, Habits Individual Recognition Reactive Safety by Natural Instinct Compliance is the Goal Delegated to Safety Manager Lack of Management Involvement Dependent Supervisor Control, Emphasis, and Goals Management Commitment Condition of Employment Fear/Discipline Rules/Procedures Value All People Training

21. DATA SHOWS THAT A STRONG SAFETY CULTURE IS REQUIRED TO ACHIEVE AND SUSTAIN THE BEST PERFORMANCE - ASHLAND 2 4 6 8 4060 80 100 0 Total Recordable Rate Relative Culture Strength Reactive Dependent Independent Interdependent Benchmark Best Ashland Inc. Industry Interdependent Help Others Conform Others’ Keeper Networking Contributor Care for Others Organizational Pride Independent Personal Knowledge, Commitment, & Standards Internalization Personal Value Care for Self Practice, Habits Individual Recognition Reactive Safety by Natural Instinct Compliance is the Goal Delegated to Safety Manager Lack of Management Involvement Dependent Supervisor Control, Emphasis, and Goals Management Commitment Condition of Employment Fear/Discipline Rules/Procedures Value All People Training

22. PROGRAMS, PROCEDURES AND PRACTICES Near Miss Reporting Safety Committee Training Behavioral Observations Job Safety Analysis Hazard Awareness & Recognition Inspections Safety Communication Reward & Recognition Compensation Policies & Procedures Audits Safety Accountability Incident Investigation Contractor Safety Management Emergency Response Program Programs, procedures and practices form the safety management system. Process Safety Onboarding Leading Indicators Human Error Life Criticals Safe Work Permits Safety Work Orders Information Technology

23. CLIENT PATTERNS 4.Inconsistent link between cultural maturity, safety management system and leading indicators.

24. THE DEVELOPMENT AND IMPLEMENTATION OF EH&S LEADING INDICATORS 1. Establish/review multidisciplinary team 15. Reporting and feedback 2. Set/revise EH&S goals & objectives 3. Determine business unit characteristics 9. Define leading indicators 8. Identify leading indicators 7. Precursor analysis 4. Identify all areas of EHS performance 5. Identify & prioritize critical EHS issues 6. Identify & assess current indicator use 14. Act on findings 12. Analyze data 11. Collect data 10. Determine target performance levels 13. Compare actual results with desired outcomes

25. CLIENT PATTERNS 5.No robust methodology for developing, implementing and integrating leading indicators into a continuous improvement process.

26. CLIENT PATTERNS 6.Lack of statistical analysis and a qualitative leading indicator component.

27. LINKING LEADING INDICATORS TO Safety Management System - Is the starting point for leveraging leading indicator data

28. PROGRAMS, PROCEDURES AND PRACTICES Near Miss Reporting Safety Committee Training Behavioral Observations Job Safety Analysis Hazard Awareness & Recognition Inspections Safety Communication Reward & Recognition Compensation Policies & Procedures Audits Safety Accountability Incident Investigation Contractor Safety Management Emergency Response Program Programs, procedures and practices form the safety management system. Process Safety Onboarding Leading Indicators Human Error Life Criticals Safe Work Permits Safety Work Orders Information Technology

29. COMPANYLEADERS EMPLOYEESSAFETY CULTURE SAFETY DURING A DOWNTURN: 29 UNCERTAINTYDISTRACTION STRESSTASKS

30. SUMMARY Conduct a leading indicator assessment Make sure leading indicators are an integral part of the continuous improvement process Contact our firm for any research studies or questions

31. QUESTIONS & ANSWERING SESSION ANY QUESTIONS?