1. BUSINESS SENSITIVE 1 Achieving desired safety outcomes through cultural alignment Don McConnell Senior Vice-President and Chief Operating Officer Battelle Laboratory Operations

2. 2 Battelle The Business of Innovation A charitable trust organized as a non-profit corporation in 1929 Conduct ~$3.4 billion in annual R&D; have received a lifetime total of 141 “R&D 100” Awards In 2005, distributed > $17 million to our communities (strong emphasis on education) Manage/co-manage 7 major laboratories including 5 national labs for DOE Battelle is responsible for the safety of 20,000 staff Battelle Annual Report 2005

3. 3 Delivering innovative solutions to complex challenges Efficient operations and the protection of workers, the public, and the environment Being a trusted and valued community/ regional asset Excellence in Science & Technology Excellence in Community Service Excellence in Laboratory Operations/ES&H Battelle’s signature in laboratory operations is Simultaneous Excellence @ Simultaneous Excellence: Achievable and Essential

4. 4 Bell Labs IBM Watson Research Center DOE National Labs Leading-edge technology 3M GE Intel Moving discovery to application Customer engagement Sustained scientific excellence Consistent delivery of commercial value Xerox PARC 3M Microsoft Merck Motorola IBM Fraunhofer Institutes BWXT Safe operations DuPont Bechtel Alcoa Washington Group Our strategy is to be “Best-in-Class” as measured against the top performers

5. 5 Battelle Aggregate DART (2005) vs. CY 2004 Industry Lost Workday Case Rates We have made progress in safety improvement but have not yet reached our goal In 2005 we still sustained 244 injuries to our staff

6. 6 Sustaining Progress:  Identify & assess gaps  Develop improvement strategies  Build on success of prior implementation Achieving our goal requires continuous improvement to safety management skills

7. 7 Worker Involvement (VPP,etc.) Worker Involvement (VPP,etc.) Worker Involvement (VPP,etc.) “Best-in- Class” Third- Party Certifications “Best-in- Class” Third- Party Certifications “Best-in- Class” Third- Party Certifications Our safety management strategy has evolved toward our goal of an embedded culture Regulatory Compliance via Integrated Safety Management “Best-in- Class” Third- Party Certifications Regulatory Compliance via Integrated Safety Management Regulatory Compliance via Integrated Safety Management Regulatory Compliance via Integrated Safety Management Regulatory Compliance via Integrated Safety Management 20002002200420052006+ Our Goal: Safety as a corporate and personal value “24/7”

8. 8 In 2004, we recognized that our Leaders must set the tone for safety excellence We established safety as an immutable Corporate core value We committed to the concept that all injuries can be prevented Leadership expectations were defined: what we must believe, know, and do Management work observations (derived from proven DuPont™ methods) became our standard Safety became a regular, consistent, and integral part of our senior managers’ conversations with each other and with staff

9. 9 In 2006, we are focusing on strengthening our overall Safety Culture We must recognize that: Our people are fallible, and even the best make mistakes As we plan our work, we need to consider people as both “controls” and as “hazards” Physical conditions, organizational processes, individual behavior, and management behavior all contribute to human error “High Reliability Organizations” encourage and reward reporting, rather than looking for someone to blame Trust between managers and staff is the single greatest predictor of success of any improvement initiative “Our challenge now is to develop strategies, based on a common foundation, but tailored to local characteristics and challenges, to drive safety culture improvement.” CEO Carl Kohrt Safety Summit, May 2006 “Our challenge now is to develop strategies, based on a common foundation, but tailored to local characteristics and challenges, to drive safety culture improvement.” CEO Carl Kohrt Safety Summit, May 2006

10. 10 We need to make some fundamental changes to our management culture Our goal must be that no staff member gets hurt Everyone must be accountable for safety Individual performance should be the very last barrier (rarely challenged) in place to prevent an injury Leadership attention to safety must be unwavering, visible, and backed up by resources Analysis of events must consider contributory factors as well as individual performance: –Physical conditions, –Organizational processes, –Individual behavior, and –Management behavior As Battelle leaders, we seek to create an environment of trust and partnership – where our staff “feel” our commitment to their safety

11. 11 Achieving a strong safety culture will take time, commitment, and cooperation Battelle staff, leaders, and our customer (DOE) all need to collaborate, for example: –Staff need to constructively engage on conditions, processes, and behaviors that are counter to their success  Just “making do” is not good enough –Leaders need to be receptive to the identification of issues, and accountable for their resolution  “Shooting the messenger” will not engender trust –DOE needs to incentivize the finding and fixing of the real problems  Urging quick resolution can leave the real problems unknown and unresolved

12. 12 Our culture is intertwined with that of DOE Laboratory Safety Culture DOE Safety Culture DOE Safety Culture Cultural Interface Cultural Interface DOE and Lab managers are partners in risk management decision-making Staff getting hurt is never an acceptable “cost of doing business” Information on events and near-misses must flow freely, but everyone’s first priority has to be taking care of the people involved Corrective actions must be focused on fixing the real problems, which may take considerable time and resources Improvement initiatives must be prioritized, integrated, and scheduled in accordance with available resources We must sustain candid, constructive, and continuous two-way communication It is essential for us to be aligned on the following:

13. 13 In summary: Battelle has made progress in improving safety, but we are a long way from our goal We must seek to improve, in an integrated and prioritized manner: –the physical conditions of our facilities, –our organizational safety management processes, –individual at-risk behaviors, and –the working environment that is created by the behavior of our leaders Alignment with DOE is essential to the success of our effort to create a strong safety culture