The Hidden Benefit of Capital Effectiveness Programs: Safety

Some believe that efficiency and safety are incompatible and that in order to maximize productivity and minimize downtime, safety becomes a casualty (no pun intended).  But in fact, when it comes to capital projects, a well-constructed capital effectiveness program not only maintains safe operating procedures, it enhances them.

Some studies put the number of capital projects that exceed budget or are delivered late at well over 50 percent.  It’s a startling statistic that shows how much value companies lose in executing projects. But this number doesn’t tell the whole story. Particularly, as it relates to what these realities mean for workers on the ground.

The later and more over-budget a project becomes, the more downward pressure is exerted on workers to move faster and get things done.  As author Neil Swidey pointed out in a 2015 Harvard Business Review article, most workplace accidents tend to occur late in a project.  He cites normalization as a cause-- the psychological phenomenon that the more people do something without suffering a bad outcome, the harder it becomes for them to recognize the risks associated with their actions. But equally possible in the case of an over-budget, overdue project is that the demands become greater as deadlines are missed.

Therefore, one of the ways to potentially improve safety is to ensure that projects are completed on time and under budget.  This is where capital effectiveness programs and safety are perfectly aligned. Specifically, capital effective planning can positively impact safety in three ways:

1. Selecting Less Risky Projects

A capital effectiveness program should help businesses make more informed decisions about the types of projects that they are investing in. Projects should be aligned with overall business strategy and there should be a common set of criteria established for evaluating project risks. With objective and clearly defined measures, it is less likely that risky projects will get the green light.  With less risky projects there is less risk for the kinds of safety issues that can plague projects that run over budget or schedule.

2. More Defined Processes

Effective and robust planning procedures should lead to more clearly defined processes. When workers have an incomplete set of instructions or do not have time to properly plan to execute tasks they are more likely to injure themselves. A good capital effectiveness program should help to outline very clear processes and take some of the pressure off workers. They can begin projects having a better idea of what they need to do and how to do it.

3. Reflection and Improvement

The final aspect of a capital effectiveness program that can positively impact safety is the review process. At the completion of each project, businesses should be reviewing outcomes to determine where improvements can be made and how execution stacked up against the original plan. In doing this, they can help to construct a repeatable set of steps and processes to use on future projects. This should ultimately have a trickledown effect on safety. It would also be wise for businesses to review safety as part of this step in addition to traditional business and operational measurements.

It’s a false choice to say that companies can only have efficiency or safety. If incorporated properly, a capital effectiveness program should actually benefit safety performance.  The challenge for most companies is implementing a capital effectiveness program that truly works. But that’s a topic for another post.