January 29, 2015 | Mark Paradies

Can Being Cheap Cost Your Company Big Bucks? … Let Me Count the Ways!

I was thinking about the ways that trying to be cheap when doing root cause analysis could cost companies millions of dollars, when a discussion with a legal counsel gave me an additional idea. Then I thought,

I need to share these ideas to keep people from making these mistakes.”

 1. CHEAP INVESTIGATIONS

I’ve seen many companies assign supervisors to investigate accidents “in their spare time.” This is definitely a cheap investigation. But the problem is that the results could cost the company millions of dollars.

For example, let’s say that a near-miss doesn’t cost anything and no one is seriously injured. Therefore, a supervisor does a quick investigation without looking into the problem in too much detail. He recommends re-training those involved and the training is conducted days later. Case closed!

However, the root causes and failed safeguards for a bigger accident are never fixed. Nearly a year later, a major accident occurs that could have been prevented IF the root causes of the previous near-miss had been found and fixed. However, because a “cheap” investigation was performed, the causes were never identified and 10 people died needlessly. The company spent $1 million on an OSHA fine and almost $100 million more on legal and settlement costs.

What do you think? Was the savings of a cheap investigation worthwhile?

One key to a world-class incident investigation and root cause analysis program is to spend time identifying which “small incidents” are worthy of a good investigation because they have the potential to prevent major accidents. These near-misses (of a big accident) should be treated as seriously as the big accident itself with a thorough investigation , management review, and implementation of effective corrective actions to prevent recurrence of the causes (and, thus, the big accident that’s waiting to happen).

2. CHEAP CORRECTIVE ACTIONS

I’ve seen companies try to perform a thorough root cause analysis only to try to take the cheap way out when it comes to corrective actions.

You have probably all seen “cheap” corrective actions. Try these:

  • Caution workers to be more careful when …
  • Re-train employees to follow the procedure.
  • Re-emphasize to employees the importance of following the rules.

These seem cheap. (Cautioning employees is almost free.) But the change very little and will be forgotten in days or at least in several months. Plus, new folks who join the organization after the caution, re-train, or re-emphaize occurs, won’t get the repeated emphasis.

What happens? The incident tends to repeat after a period of time. And repeat incidents can be expensive. Thus by saving on corrective actions, you may be costing your company big bucks.

Instead, for investigations that could prevent major accidents, investigators should propose (and management should insist upon) corrective actions that remove the hazard, remove the target, or significantly improve the human factors of the safeguards that are used to prevent a repeat of the accident. These may not be cheap but they will be infinitely more effective.

What if one of these three choices can’t be implemented? Then one or more additional safeguards that are effective should be developed.

3. CHEAP TRAINING

The legal counsel that I was talking to told me that MOST “TapRooT® Users” he ran into during their preparation for trails had never been formally trained in TapRooT®. The attorney had attended one of our public TapRooT® Courses. He was amazed that management at fairly major companies would assign people who had never been to ANY formal root cause analysis training to investigate serious incidents that had potential for expensive legal outcomes.

In one instance, the person using TapRooT® had obtained one of our old TapRooT® Books from a friend. He then “used” the technique after reading “some” of the book. He didn’t have a Root Cause Tree® Dictionary or a Corrective Action Helper®. However, his reading didn’t provide him with the knowledge he needed to use TapRooT® correctly when investigating serious incidents (or not serious ones for that matter).

Don’t get me wrong, the TapRooT® Book is a great read. But I would never recommend it as the only source of training for someone who will be investigating serious accidents (fatalities and major environmental releases). What would I recommend? The 5-Day TapRooT® Advanaced Root Cause Analysis Team Leader Training.

The attorney also mentioned that he frequently meets TapRooT® Users who are out of practice using TapRooT® and really need a refresher because they don’t have many serious accidents to investigate and don’t get any feedback even when they do an investigation. My answer to that was ….

  1. They should be using TapRooT® proactively to get practice using the techniques.
  2. They should set up a company peer review process to help users get better at applying the techniques.
  3. They should attend the Incident Investigation and Root Cause Analysis Track at the Global TapRooT® Summit at least every two years to keep up with the latest improvements in the TapRooT® Techniques.

By the way, what had the “cheap training” cost the company? Over $50 million dollars in settlement costs.

HIGHLY QUALIFIED, COMPETENT, PRACTICED TapRooT® INVESTIGATORS ARE IMPORTANT INVESTMENTS

The first thing management needs to understand is that they need to invest in their incident investigators. Saving on training on root cause analysis is a stupid idea.

THOROUGH ROOT CAUSE ANALYSIS OF INCIDENTS THAT COULD HAVE BEEN MAJOR ACCIDENTS ARE IMPORTANT INVESTMENTS

Once you have excellent investigators, make sure they have the time and resources needed to investigate all incidents/near-misses that have a potential to become major accidents. Saving money on investigations is a fool’s mission.

CORRECTIVE ACTIONS THAT COULD PREVENT MAJOR ACCIDENTS ARE IMPORTANT INVESTMENTS

Management should insist upon effective corrective actions that go beyond training. Saving money by implementing “cheap” corrective actions is a false savings that will come back to haunt the company.

DON’T MAKE THESE MISTAKES! Invest in effective root cause analysis and prevent major accidents from occurring.

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