1. Leading with Leading Indicators
Health Physics Society
July 2005 Spokane WA
Tim Carter, V.P. Safety and Health
Steve Prevette, Statistician
Fluor Hanford

2. Health Physics Society, July 13, 2005
Introduction
Fluor Hanford is making use of leading indicators and statistical methodology to assist in safety
We have achieved significant safety improvements – 84% reduction in OSHA case rate from 1996 to 2005
Use of leading indicators has correlated to a 30% reduction in OSHA case rate over past 18 months
Leading with Leading Indicators
Health Physics Society, July 13, 2005

3. Health Physics Society, July 13, 2005
Results
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4. Health Physics Society, July 13, 2005
Leading Indicators
Use of Leading Indicators has had a profound effect at Fluor
Increases visibility to safety and production processes
Requires understanding of leadership and how to use data
Will show examples and stories
Will also help you with theory and use
Leading with Leading Indicators
Health Physics Society, July 13, 2005

5. Leadership and Management
Leadership is a rare talent.
Leaders provide a vision that people willingly follow, believe in, and accomplish.
Leadership requires action, determining the right things to do.
Management involves doing things right.
Both management and leadership are necessary for success.
Leading with Leading Indicators
Health Physics Society, July 13, 2005

6. D.O.E. Voluntary Protection Program
Simply complying with regulations is not sufficient for continual improvement
VPP has helped to focus
management and union
efforts and teaming
Leading Indicators fit in with
worksite analysis
Leading with Leading Indicators
Health Physics Society, July 13, 2005

7. Dr. Deming’s System of Profound Knowledge
Appreciation for a system
Interactions,
System interrelations and flow
Knowledge about variation
Statistical knowledge,
Control charting,
Variation,
Factual data
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Health Physics Society, July 13, 2005

8. Dr. Deming’s System of Profound Knowledge
Theory of Knowledge
Knowledge is built upon theory
Theory provides the ability to predict
How people learn
Psychology
Understand people and their interactions,
Understand importance of intrinsic motivation
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9. Health Physics Society, July 13, 2005
VPP and ISMS
The SOPK meshes well with VPP and the Integrated ES&H Management System
Good working history, back to the 1930’s
Old Ideas, New Applications
“There is no knowledge without theory”
- Dr. Deming.
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Health Physics Society, July 13, 2005

10. Health Physics Society, July 13, 2005
Trending
Statistical Process Control is used at Fluor Hanford
- Standardized
- Proven
- Moves focus
away from
random noise
Trend
detection
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11. Health Physics Society, July 13, 2005
SPC Description
Data are plotted in time sequence
Baseline average (center line) is added
Upper and Lower Control Limits are added, 3 standard deviations above and below the average
UCL and LCL represent the expected range of variation in the data.
Variation outside this range is circled (other rules are used in addition)
See Appendix, and the “Hanford Trending Primer” at
Leading with Leading Indicators
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12. Common Trending Errors
Typical Behavior
Reaction
Action
Reacting to Ups and Downs (False Alarms)
Comparisons point to point, to average, to last year
Tampering and knee jerk reactions, frustration
When stable, work on long term history, fix the system
Failure to detect trend
No criteria to separate trend from noise
Molehill grows into mountain
Use SPC to detect trends accurately and in time
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Health Physics Society, July 13, 2005

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SPC Cost Savings
Not only more reliable, but less expensive:
Can automate retrieval and processing of data
Saves time (15 seconds per chart update, 5 minutes per new chart)
Actual case – reduction of time needed for charts from 40 hours per month to 15 minutes per month
Quicker read by executives, better comprehension
Allows risk minimization
Becomes integral to business model
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Health Physics Society, July 13, 2005

14. Health Physics Society, July 13, 2005
The Workers Know
Yes, the workers can understand and do accept SPC, often times better than the managers
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Health Physics Society, July 13, 2005

15. The Red Bead Experiment
Helps by providing a hands-on, emotional
“a ha” experience
Fluor has script and video available, with ISMS focus
“Standard” management practices used, and then a better way shown
One hour with the Red Beads will accomplish more than years of discussion
Leading with Leading Indicators
Health Physics Society, July 13, 2005

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Systems Thinking
Would putting a Rolls-Royce engine in a Geo Metro make an improved automobile?
Nothing wrong with either, but the combination probably won’t work (Russ Ackoff)
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17. Systems Thinking Concepts
Pay attention to interactions more so than components
Knowledge of statistical variation more so than discrete numbers
Long term focus more so than short term
Cooperation more so than fear, blame and internal competition
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Health Physics Society, July 13, 2005

18. Health Physics Society, July 13, 2005
Leadership is Needed
The control chart will help characterize the data.
Many times the data “will cry out” for action to be taken.
Leaders at all levels in the corporation must be willing to hear the cry, formulate the appropriate action, take the action, and determine the effect of the action.
Leading with Leading Indicators
Health Physics Society, July 13, 2005

19. Early Fluor Experience with Indicators
Annual Employee Training VPP survey
5 Hazardous Occupations
No. of Indicators from 300 per month to 1,600
Good comments in VPP reviews
In 2000, OSHA rate “flat-lined” at 1.5 cases per 200,000 hours
Leading with Leading Indicators
Health Physics Society, July 13, 2005

20. Jump Start with Leading Indicators
Just what are leading indicators, anyway?
Predictions of future? or
A means to create a better future?
Leading with Leading Indicators
Health Physics Society, July 13, 2005

21. Creating a Better Future
We have gotten distracted by calls to predict future, delaying development of leading indicators
At a low injury rate, little information exists in the outcome indicators
Trending response time long at these low rates
Use leading indicators to measure lower threshold data and activities
Quickens trend response, reduces injuries and improves outcomes
Leading with Leading Indicators
Health Physics Society, July 13, 2005

22. Our Current Leading Indicators
Events - First Aid Cases, Occurrences, Near Misses
Safety Inspections - Number and Score
Employee Input – Safety Concerns and Survey Responses
This list has changed, and will likely change as the need arises.
Statistical Process Control (SPC) is used.
Leading with Leading Indicators
Health Physics Society, July 13, 2005

23. Health Physics Society, July 13, 2005
Events
Leading with Leading Indicators
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Safety Inspections
Leading with Leading Indicators
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Employee Sentiment
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Results
Five of the Seven Injury and Illness Leading Indicators showing significant improving trends
OSHA Recordable Case Rate has dropped 30% since start of use (Aug 03 – Apr 04 compared to May 04 – Jan 05)
Allows focus on doing the right things right
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Health Physics Society, July 13, 2005

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Correlations
Note: Black line is OSHA Case Rate, Green line is the Leading Indicators
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Correlations
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29. Developing Your Indicators
Measures of Discipline (work process / planning)
Measures of Potential (near miss / first aid)
Measures of Background Noise (non-injury events)
Indicators of Employee Morale / Satisfaction / Concern
Prevention Activities (inspections / assessments)
Level of Effort (time / money devoted to safety and health activities)
Management Visibility.
Leading with Leading Indicators
Health Physics Society, July 13, 2005

30. A Color-Coded Dashboard
Integrated presentation
Combines the best of “balanced scorecard” with SPC
Better than rolling all data into one index
Allows a Systems Approach
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Health Physics Society, July 13, 2005

31. Red Yellow and Green Control Chart Result Decision Color
Leadership Action
Stable
Level is Acceptable
Green
Stay the Course
Level is Not Acceptable
Yellow
Improve System
Trend
Adverse
Red
Corrective Action
Improving
Reinforce – Stay the Course
Leading with Leading Indicators
Health Physics Society, July 13, 2005

32. Use of “White” Addition of White to the dashboard can be advantageous:
Use White (or Yellow) for one month away from a trend
Use for stable at an okay level, but not superior
Minimizes some of the push to be “All Green” while allowing for opportunities for improvement
Leading with Leading Indicators
Health Physics Society, July 13, 2005

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Leading with Leading Indicators
Health Physics Society, July 13, 2005

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Conclusion
Tools and methodologies such as
Statistical Process Control,
Systems Thinking,
Surveys,
and Leading indicators,
Can provide insight for decision making
Leading with Leading Indicators
Health Physics Society, July 13, 2005

35. Conclusion Leading Indicators provide insight and focus for leaders
Allows managers, workers, and safety professionals work towards one future, to build the future
Moves management focus forward toward prevention
Safety excellence is achievable, if you lead with leading indicators.
Leading with Leading Indicators
Health Physics Society, July 13, 2005