CREATING (??) A SAFETY CULTURE Robert L Carraway, Darden School of Business 2013 Air Charter Safety Symposium February 2013

How good is your safety culture?

Rate it on a scale of 1-5, 1 being not very safety oriented, 5 being very safety oriented How many “near misses” have you had in the past year?

Who am I and what am I doing here?

• Associate professor, Darden School of Business, decision and risk analysis

• Darden Executive Educations’s Managing the Corporate Aviation Function

• Flight Safety International • Other industries where safety is paramount

(nuclear, coal mining) • FORMER SENIOR ASSOCIATE DEAN FOR

DEGREE PROGRAMS (MBA)

My charge at Darden in 2006

Darden is known within the industry for excellence in education, but needs to get stronger and better in other areas to maintain its reputation and ability to compete. Keep the culture of educational excellence strong even as we focus on other things.

What is culture?

The values and behaviors that contribute to the unique social and psychological environment of an organization The ultimate test of an organization’s success is behaviors—i.e., what people do

There are two ways to drive behavior: Processes, rules and regulations Principles (values)

Processes versus principles

Processes Must be followed; no discretion “Police” to make sure people following Easily undermined Principles No script; people adapt to situation “Audit” instead of police Requires that people buy into principles and have the necessary skills to apply them

Behavior←Decisions To determine how best to affect behavior, you first must understand how people decide

What is your basic philosophical tendency when faced with important decisions?

Statement 1: Too much analysis can cause you to get “lost in the trees” and miss the more important strategic consequences of decisions

Intuition, gut, emotion…

SYSTEM 1

Statement 2: Thorough, rigorous analysis, with numbers, is essential for making good decisions by helping you avoid the pitfalls of faulty intuition

Rational thinking, analysis…

SYSTEM 2

F

System 1

Five senses

Emotions

Memory

Decision making

Math? System 2

Probabilities?

What is your reaction?

What is your reaction?

24 x 17

And the winner is…

SYSTEM 1!!! (if the situation is sufficiently salient)

But maybe this is not the panacea that many of you think (hope?) it is…

Question 1 Plan A: This plan will save the cargo of one of the three barges, worth $200

million.

Plan B: This plan has a one-third probability of saving the cargo on all three barges, worth $600 million, but has a two-thirds probability of saving none of the cargo.

Plan A: This plan will result in the loss of two of the three cargoes, worth $400 million.

Plan B: This plan has a two-thirds probability of resulting in the loss of all three cargoes (the entire $600 million), but has a one-third chance of losing no cargo.

Plan A is more attractive when framed as “saving $200 million” than “losing $400 million”

FRAMING—the framework we use to structure a decision can influence the outcome of the decision

Question 2 Is the population of Fiji greater than 1.5 million people? Yes or No

What is your best estimate of Fiji’s population?

Is the population of Fiji greater than 500,000 people? Yes or No

What is your best estimate of Fiji’s population?

Those given 1.5 million tend to make higher estimates than those given 500,000

ANCHORING—in situations involving uncertainty, we tend to believe initial data (that resolves some of the uncertainty—phew!) more than subsequent data

Question 3 Two months ago, you purchased a fourth-row-seat ticket worth $500 to see The Rolling Stones in concert at the open-air stadium in your hometown. It is the evening of the concert, and time to leave if you are going to attend. It has been raining all day and the forecast is for it to continue to do so throughout the evening (Stones’ concerts do NOT get rained out). In addition, you have learned that lead singer Mick Jagger is sick and will not perform, although the rest of the band will (with a backup lead singer).

Earlier in the week, you were given a fourth-row-seat ticket worth $500 to see The Rolling Stones in concert at the open-air stadium in your hometown. It is the evening of the concert, and time to leave if you are going to attend. It has been raining all day and the forecast is for it to continue to do so throughout the evening (Stones’ concerts do NOT get rained out). In addition, you have learned that lead singer Mick Jagger is sick and will not perform, although the rest of the band will (with a backup lead singer).

Those who purchased the ticket are more likely to go than those who were given the ticket

SUNK COST—what we have already invested makes us more inclined to continue an activity, even when it is irrelevant to future results

Question 4

Typical responses

Stomach cancer 14% Motor vehicle accidents 86%

Tuberculosis 23% Fire and flames 77%

Actual numbers (annual)

Stomach cancer 95,000 Motor vehicle accidents 46,000

Tuberculosis 4,000 Fire and flames 5,000

People are more inclined to choose Motor vehicle accidents and Fire and flames because we hear about them more

VISIBILITY—we place a higher probability of occurrence on those things that are higher profile to us

So System 1 “wins”, but is easily biased (translation: wrong!)

• Framing • Anchoring • Sunk costs • Visibility

So what can we do about it?

Defer to SYSTEM 2?

• Has its own set of issues/limitations http://www.youtube.com/watch?v=IGQmdoK_ZfY “Tunnel vision”—When System 2 is engaged, other functions (such as sensing) shut down, because System 2 is work and work requires resources

• For IMPORTANT decisions, YOU CAN’T!

So what does this have to do with culture? • Attempting to install a pure “System 2”

approach is a waste of time • For important decisions (think: risk), System

2 can only be useful IF it can influence System 1, where the final decision will be made

• System 1 doesn’t do math, it does stories

Make it easy for System 1

• When confronted with a situation, System 1 finds the easiest, most believable “story” in memory

• For stories to pop up first when the “search engine” is invoked, they must have meaning

• Culture can help establish meaningful stories that comprise the dominant organizational narrative

Memories can decay quickly…and last forever • Different stories resonate with different

people (one size does not fit all) • A multitude of commonly themed “stories”

maximizes the chance that one will stick with any given individual

• Meaningfulness can be easily undermined (because meaning is key)

How do you widely disseminate stories? • Visibility is key • Words of leaders • Communication tools (newsletters and the

like), formal and informal • Artifacts • Formal reporting processes—NOT with the

primary objective of policing, but of visibility

The rest of the Darden story—principles I think I learned • Separate what you are trying to do from

how you go about doing it…Key: ASSUMPTIONS (innovation)

• “Don’t give without getting” (award) • Marketing matters (it’s not substance or

marketing: it’s both) (technology) • Make things visible, particularly if you’re

going to rely on principles not processes (project management system, grading)

In summary

• “Culture eats strategy for breakfast” • Influencing how people feel about safety is

far more useful than trying to change how they think

• Formal processes, rules and regulations are not likely to influence how people feel (except negatively!)

• BUT, they can be effective as visibility raisers in a more individually-targeted campaign to influence how people feel

In summary

• In devising a plan to enhance your safety culture, ask yourself: What could change peoples’ minds about the relative importance of safety and what they can do about it?