I was recently in a conversation with a peer in our field who I greatly respect. We were discussing the most effective organizational design in large, multi-site, manufacturing enterprises to maximize the EHS performance. He was considering if the current design may not be capable of the performance aspired to by the organization. After thinking more about the conversation, I thought it might be interesting to others. I have posted a general version of it below.
The question was:
I would like to add your insight and experience to my own on this issue. My employer has EHS teams set up in a decentralized model (each local EHS team reports up to the plant manager for that facility). The risk management team is charged to lead the corporate oversight of EHS, and are responsible for developing EHS strategic initiatives for the sites to implement and execute. My experience has shown that a “center of excellence” model where all EHS reports up to an executive leader with a safety or organizational development background, maintaining operations is a key partner, delivers more consistent results relative to overall organizational expectations. I am considering if having local operations own the safety assurance function creates a potential conflict of interest that could result in poor decisions regarding safety. What are your thoughts/experience?
My response was:
Regarding these two varying models of organizational reporting for safety, I have seen both work.
If the reporting responsibility for safety goes through operations, the success depends on the operations leader who also has safety accountability. If that person is committed to both safety and effective operations, and allows the safety team to function objectively, this can be a very successful organizational structure. This is because operations owns safety and thus the results. They have no other function to place blame on. Reward systems for the ops leadership must be aligned for this to be successful, for example bonus criteria should include safety performance as a key element. The great risk of course with operations is that they will value production at all costs over all other performance concerns.
Conversely, I have seen the structure of having safety come through a center of excellence not function because of a lack of understanding by the leaders of the center of excellence. Also, in that structure it is very easy for operations to blame safety failures on the outside safety organization. Having said that, the center of excellence model strength is that it immerses the safety professionals in an atmosphere of experts, and in my opinion, drives innovation and relieves undo concern by the safety professionals for production outcomes.
So my thoughts are that it really comes down to the individual leaders. Either model will succeed or fail based on the capabilities and commitments of the leaders and the culture of the organization. In fact, as I think about it further, management culture may be the chief determinant of deciding which structure is best for the organization. These are the factors that leaders at our level (enterprise leaders for the EHS Function) must use our knowledge, experience and organizational savvy to determine how to impact the EHS org design for maximum performance.
An additional discussion of centralized vs decentralized organizational design factors impacting EHS performance can be reviewed in the ASSP Journal, Professional Safety, in the article: Organizational Reporting Structure: Its Effect on SH&E Professionals, by Wanda D. Minnick.