The Safety Leadership Pioneer
29 February 2024
It was 1987. Employee engagement was dwindling, and the company’s financial results were a mess. Profits were not nearly as good enough to cover its cost of capital and the company was quickly losing market share to its competitors. The corporation had become plagued with inefficiency, a characteristic common in large organizations that can ultimately lead to a company’s ruin and ultimate demise. We are all familiar with such tragic corporate endings. ALCOA was in trouble.
The board of this American, primary aluminum producer decided to do something different, something unorthodox and contrary to the way they had been accustomed to doing things for the last one hundred years. They decided to hire an out of house CEO. Traditionally, the CEO was someone who had climbed the ranks of the organization, someone who was experienced with the company’s business and groomed to embody its organizational culture. Paul O’Neill scored zero on all these fronts. Having personally worked in this industry before, I could appreciate the risk the board was taking, especially in such a critical moment when time was of the essence.
O’Neill’s first meeting with Wall Street was highly anticipated. What was this new CEO going to do to put more aluminum in cars? How was he going to address waning employee morale? And most importantly, how was he going to regain market share and drive the share price back up? The large amphitheater was filled with financial analysts and brokers. Paul O’Neill walked up to the podium and after welcoming the attendees, he began to speak about… worker safety. The people in the room were confused to say the least. They looked at each other in bewilderment and questioned whether or not they were in the correct hall. What does worker safety have to do with the stock price? Whose decision was it to put this naïve CEO at the helm of one of the largest and most respected metal-making companies in the world? Some brokers left in the middle of O’Neill’s address to call their clients and advise them to sell their ALCOA shares immediately before it was too late. The risk the board had taken was becoming more and more pronounced. But O’Neill didn’t bow down to pressure or the status quo. He had a vision and strategy in mind and continued to lead with safety at the forefront of every one of his decisions. It wasn’t long before ALCOA began to reap the fruits of O’Neill’s leadership as the company rebounded from its slumber. In fact, during his 13-year tenure, the company’s market capitalization improved by more than 900% and net income and sales also saw triple figure positive deltas respectively. Oh, and if you’re wondering, safety statistics also saw drastic improvements with significant reductions in lost time injuries.
O’Neill’s incredible story was my inspiration for focusing my PhD research on safety leadership. How could a CEO turn the state of a failing company around and transform it into a market leader by all metrics using safety as his primary medium for change? How could he perform such an impressive feat in a short span of time? What is it about safety that could make it so powerful and transformative? O’Neill’s speech to Wall Street and his actions henceforth showed the average employee on the shopfloor that they weren’t just a number, but rather people that came before production and financials. Along with getting the other parts of the business equation right, O’Neill put people first and when leaders do this with sincerity, employees pay the employer back with their sweat, productivity, and loyalty. Efficient production and a healthy bottom line will naturally follow.
Though Paul O’Neill passed away in 2020, he left behind a tangible legacy for leaders at any organizational level of what can be possible by putting safety, and by extension people, first. He was the first CEO to truly pioneer the potential power of safety leadership and provide future leaders with a practical example to emulate.