Paul O’Neill was the CEO of Alcoa from 1987 to 2000. Under his leadership, Alcoa’s market value increased from $3 billion in 1986 to $27.53 billion in 2000, while net income increased from $200 million to $1.48 billion.
O’Neill began his first speech to Alcoa shareholders in 1987 by saying, “I want to talk to you about worker safety.” The room fell silent. O’Neill continued, “Every year, numerous Alcoa workers are injured so badly that they miss a day of work. Our safety record is better than the general American workforce, especially considering that our employees work with metals that are 1500 degrees and machines that can rip a man’s arm off. But it’s not good enough. I intend to make Alcoa the safest company in America. I intend to go for zero injuries.”
Charles Duhigg witnessed the silence and recounted the scene in his book, The Power of Habit. An investor finally asked a question; it was a question about inventories. “I’m not certain you heard me,” O’Neill replied. “If you want to understand how Alcoa is doing, you need to look at our workplace safety figures.”
Paul O’Neill understood the connection between safety and business performance, and his strategy for turning the company around centered on safety. Because of his results, today’s shareholders increasingly accept the role safety can play in business success, and they want to invest in ethical, successful, competent businesses. A company’s ability to manage safety reflects its ability to manage every aspect of its performance.
This is an excerpt from the book 7 Insights into Safety Leadership.