Last week, I had the pleasure of attending the EHSQ Leadership Summit in Toronto. The event was a gathering of Environment, Health, and Safety (EHS) and Quality business leaders hosted by Intelex. A highlight of the event for me was moderating a panel discussion on the opportunity to integrate EHS and Quality Management systems in the pursuit of Operational Excellence.
The dialog in the panel session and throughout the day re-enforced my view that EHS management as a business function that still has a strong tendency to operate in a standalone fashion. Visualize this: I kicked off the session by polling the audience with “How many of you think that EHS and Quality management should be well-integrated in your organization?” Most hands in the room went up. The following question I asked those same people was if they had such integration in place today, and there was hardly a hand left in the air.
A key takeaway from the Summit is that although the business value of effectively integrating EHS management with quality and other aspects of the business is well recognized, EHS and Operations business leaders still struggle to do so in practice. To be fair, the same can be said of other areas of the business such as quality, safety, asset management, R&D, and so on.
Let’s consider the situation in industry today and some ideas for improving organizational alignment and integration towards the goal of Operational Excellence.
Today’s State of Play: We’re Still Working in Silos
For several years, LNS Research has conducted ongoing survey-based research on trends, challenges, and best practices in industrial operations. Our research encompasses a holistic view of Operational Excellence and performance improvement across the dimensions of people, process, and technology.
A consistent finding among our surveys is that the most commonly cited barriers to performance improvement are:
1) Poor cross-functional collaboration
2) Disparate systems and data sources.
This applies to each of the functional areas we consider to be key pillars of Operational Excellence, namely manufacturing/operations, quality, EHS, and asset management. In a nutshell, silos of organization and information are the main barriers to performance improvement.
Although this seems like a simplistic assessment, it reflects the current state of play in Operational Excellence. As was borne out at the EHSQ Summit, performance improvement depends on recognizing the limitations of a standalone approach to EHS management and taking action to get better business integration.
Critical Success Factor: Stakeholder Engagement and Alignment
The main theme that emerged from the panel discussion is that the success of any improvement or change initiative comes down to the people involved and impacted. Identifying and addressing the goals, objectives, and requirements of key stakeholder groups is critical to gaining the organizational support needed to effect change. Stakeholders can be viewed as belonging to one of three main groups: Executives, Operations (including frontline employees), and Business Function leaders.
At the executive level, the senior leadership team is concerned with achieving the organization’s strategic objectives and overall business performance. Operations leaders are focused on allocating resources to meet operating, quality, and safety objectives across the core value chain functions of production, delivery, and service. Leaders of business functions such as R&D, supply chain, EHS, and quality strive to improve performance in their functional purview while fulfilling their mission of supporting core business operations.
Each of these key business stakeholder groups has a point of view on what success is and how it’s measured. Engaging and understanding the challenges and requirements of each group is key to smoothing the way for further collaboration.
Approaching EHS Management as a Team Sport: Become One with the Business
One of the main challenges the EHS business function had over the years is being perceived by the rest of the business as merely a cost center. Today, in many organizations there is increased recognition that when properly executed, EHS management can add value to the business far beyond compliance. These contributions include improving efficiency, risk reduction, and enabling innovation and profitable growth.
The fundamental approach needed to advance this re-positioning is for EHS leaders to strive to integrate EHS activities into the core business continually. This involves changing the perception of EHS from a “department” responsible for safety and environmental matters, to a business partner working side-by-side with business leaders to help achieve their objectives.
Here are three actions you can take to help accomplish this re-positioning by aligning with key business stakeholders to break down the silos:
1. Show support the executive agenda. This means understanding your organization’s mission, values, and strategic objectives, and relentlessly showing how EHS initiatives will help achieve them.
2. Add value to continuous improvement programs- embed EHS in your organization’s Operational Excellence and Digital Transformation initiatives, and use that as a vehicle to improve EHS performance while improving operations.
3. Take a Business Case approach- view each activity and initiative as a business deal that has to have a compelling value proposition, keeping in mind the objectives and metrics that are important to the decision makers and influencers.
Yes, EHS is a team sport. To win, EHS leaders and professionals would do well to approach it from the perspective of a team owner or coach who is looking to make the entire organization successful.