BUILDING A BUSINESS CASE FOR SAFETY
Safety leaders are not always business minded. We often rely on justifying safety investment with the compliance hammer or connecting with “hearts and minds” instead of building a solid business case. Decision makers often have formal business education and training, but limited experience on the operational or safety side of the business. They often see safety as an expense versus a value, not a business issue, or view the safety profession as being too idealistic and inflexible. In order to convince decision makers to invest in safety, safety leaders need to be prepared, brush up on business terminology, use factual information, and build the right team to assist with case development.
The first step in building a business case is to define the problem and identify the appropriate solution. The second step is to prepare the case. Building a solid case takes time. It is important to identify the business planning cycle and allow at least 60-90 days for research and collaboration. Collaboration is often undervalued. The return on a safety investment often spills into other areas such as human resources and operations. Having representation from these areas is critical to the process.
Once the right team is assembled, it’s time to get to know the decision-makers. Try to compile a list of their priorities which may include cost savings, return on investment, keeping up with the competition, being a leader in the industry, or improving the company’s reputation. If they value cost savings, what could be more important than communicating the direct costs associated with injuries in terms they can understand - such as injuries as a percentage of payroll, in product sales terms (i.e., need to sell X amount of additional product to cover injury costs), or cost per employee. When communicating the solution, consider using financial language and calculations such as return on investment and the present value of money. It is important to speak their language.
Once the priorities of the decision makers are identified, begin evaluating and compiling projections on the savings associated with the project. Savings are often attributed to reductions in worker compensation, medical expenses, insurance premiums, etc. Indirect benefits may include items such as employee satisfaction and decreased turnover that can be more difficult to quantify. If the project improves compliance, focus on the consequences of non-compliance, such as regulatory citations and penalties.
Building a business case is not something many safety leaders are experienced in. In today’s environment, safety is often seen as an expense rather than an investment. Get to know the decision-makers, learn their language, and convince them otherwise.
Joe Mlynek is a partner and subject matter expert at Safety Made Simple, Inc. He has over 20 years of experience in safety at the corporate level and as a consultant. He is a Certified Safety Professional (CSP) and Occupational Safety and Health Technician (OHST). Joe can be reached at email@example.com