Playing it safe Featured

8:00pm EDT August 29, 2006
Charlie Bacon didn’t exactly get a ringing endorsement from his board of directors the first time he presented his safety initiative in 2004.

As the new president and CEO of Limbach Facilities Services LLC, Bacon was trying to make a point about how a stronger commitment to safety would benefit the entire organization in many ways.

“You have to understand that this was my first meeting,” says Bacon. “It was very important to get the board to understand how important this is. I think after about five or six minutes, the chairman of the board said, ‘Charlie, this is all very interesting, but could we get on to the financials?’”

Bacon replied with a polite “no,” and continued with his presentation.

Part of the reason that Bacon had decided to attack the safety issue was the death of a worker just before his arrival at Limbach, a the $470 million mechanical and sheet metal contractor.

“When I arrived here and I heard about it, I found out we had some really good operations, some great operations, but we had some other operations that were really missing the boat on this,” says Bacon.

Bacon had solid experience with large national general contractors and construction management firms, where he had led successful accident prevention programs, and he was motivated by the prospect of saving lives, improving worker health and saving money.

Bacon arrived at Limbach Facilities Services about 14 months after the company’s management and an investment group acquired it in December 2002 out of the Enron Corp. bankruptcy. On the upside, Bacon found a company with a deep sense of history and many long-time employees. On the downside, he saw a company that had lost its way to some degree because it had never been fully integrated into Enron.

To lead the company forward, Bacon put together a plan that included schemes to improve profitability and foster teamwork. The item at the top of the ticket — and one that was related closely to the other two in Bacon’s mind — was worker safety.

Limbach’s safety record wasn’t particularly bad, but it was uneven. One branch had gone six years without a lost-time accident, but others had demonstrated a much less admirable record.

“On the downside ... we weren’t following consistent policy and practices within the organization,” says Bacon. “Things got confused, the direction was not clear and the first thing I had to do was jump in, understand the company, understand the people and what we’re really good at and what we’re not good at.”

While improving safety had the potential of cutting costs, Bacon says he saw the emphasis on reducing injuries as an approach that would do more than simply cut down on accidents and save money and thereby improve profitability.

“You’ve gone through a heck of a scenario with the Enron situation and the life or death struggle of coming out of the situation,” says Bacon. “How do we now start feeling good about what we are and who we are? I like to refer to it as the right thing to do for our people, because we have people going home at night with all of their fingers, going home to their families, and that’s the right thing to do for people.”

Bacon says there is a correlation among well-organized project management, safety and profitability. Projects that are managed well tend to encourage safe work environments. And safe environments — in part because they don’t siphon off resources in the form of lost time or workers’ compensation costs — usually perform well financially.

“You’re organized, you’re thinking ahead, you’re caring and you’re taking care of people,” Bacon says. “Those jobs, not only are they safe jobs, they turn out to be the most profitable experiences we’ve had.”

Rallying around safety
Bacon saw the safety program as an effort the entire company could get behind. It would also serve as a unifying experience that would clear some of the muddle left over from the Enron era.

“I chose the whole safety element to say, you know what, this is a real feel good for all the employees to rally around,” says Bacon.

Once Bacon got the board’s approval and buy-in on the safety program, he set about educating senior management about the new initiative, titled “Incident & Injury Free.” To ensure that he got the managers on board, he enlisted an outside consultant to conduct a session designed to convince them of the importance of accident prevention.

“We went to Orlando for an all-day meeting on this,” says Bacon. “We took the executives to an all-day meeting and brought in a facilitator, who I’ve worked with in the past, who is extremely gifted at helping people understand why this is such a smart thing to do.”

He continued the process at each of Limbach’s branch locations, conducting an orientation process to get all of the project managers, trade managers, branch managers and even the financial people to understand why the company had decided to make safety a central concern. Approximately 370 managers were introduced to the program.

Included in each presentation was an exercise designed to help each branch introduce the program to its field and office employees. Bacon says the purpose wasn’t simply to get compliance with safety regulations.

“It wasn’t about OSHA process and policies, it wasn’t about beating people up,” Bacon says. “It was all about sharing why we’re doing this and why we want people to go home to their families every night, and not only is the employee important but the children of the employee, the spouse of the employee.”

To make sure that the campaign didn’t lose steam, Bacon ordered an intensive internal communications plan to keep the issue in front of employees. A quarterly newsletter was initiated to send the message that the company cares not only about its employees but about their families as well.

“What you’ll see on our jobsites and at the offices and headquarters are these big banners of families or fathers and a daughter,” says Bacon. “The message that we’re communicating with this is, ‘You don’t want to miss this.’”

To reinforce its importance, all meetings are kicked off with safety at the top of the agenda.

“It may be a two-minute conversation or it might turn out to be a 20-minute conversation, but we always start off talking about safety, including at our board meetings,” says Bacon.

A communications program has been initiated in which branches are encouraged to bring safety concerns directly to Bacon’s attention.

“If there’s an incident on a project site or even in our office where someone hurt themselves, it was first aid or maybe it was a major accident, even a near miss, there’s a thing called the safety alert via e-mail,” says Bacon. “I want to know what’s going on.”

But more important, he says, “I want our guys to know that in Pittsburgh they almost had an incident because a guy wasn’t wearing the proper set of goggles, or a guy in Los Angeles cut his hand because he wasn’t wearing the proper glove when he was cutting sheet metal.”

Via the safety alerts, Bacon became aware of a number of incidents in which workers doing overhead drilling in concrete were going to the eyewash to clear dust from their eyes. After investigating, the company found that while employees were wearing face shields, they weren’t using tight-fitting goggles to keep dust out of their eyes. Bacon sent out an alert to make sure that employees had the proper protective eyewear.

“If we can learn from an incident, I think it just creates the spirit of teamwork that we’re looking for,” says Bacon.

Bacon stays directly involved, traveling to branch offices and field operations to meet with employees and managers and to reinforce the safety program. He has a monthly conference call with the field safety managers to discuss their concerns.

“I have all the safety managers who have responsibilities in the local branches, they have a forum opportunity with me on a monthly call so they can bend my ear,” says Bacon.

But while he emphasizes that punishment can be counterproductive, those who resist the program aren’t likely to be around long.

“If you’re on board, we’re going to have a great ride,” Bacon says. “If you’re not on board and it’s something that you can’t subscribe to for whatever reason, you should get off this train, and sometimes we’ve had to help people off the train.”

Bacon says that has demonstrated that the company is serious about the effort. As an example, a foreman in Washington, D.C., was found working in a trench without shoring. The branch office management viewed the violation as so serious that they fired him.

“The guys said, ‘He’s not getting it. If he doesn’t get it, how will the tradesmen who work below him know how important this is?’” says Bacon.

Those trades workers, typically the toughest to convince and often critical of management, have bought in.

“We’re starting to hear the tradesmen guys saying they really need this,” says Bacon.

Inspired by the early success of the safety program, Bacon decided to introduce a related program at Limbach last fall. Motivated by many of the same concerns that encouraged him to launch a safety initiative — including worker well-being and rising health care costs — Bacon rolled out a wellness program. He says getting employee buy-in was much easier than it might have been because the company had already convinced the employees that it cared about their welfare.

Safety’s profits
The board members who would have preferred to push the safety program aside when Bacon introduced it at his first meeting with them are now ardent supporters. The chairman of the private equity firm invested in Limbach has had Bacon present to its managers to encourage them to launch their own safety initiatives.

“What we’ve seen happen, which is about counter to what everybody else says in the industry, (is) we’ve seen our insurance rates go down,” says Bacon.

And gone down dramatically, by Bacon’s and practically anybody else’s measure. While Bacon says that the safety program is a work in progress — an effort that never ends because potential hazards are always present on the jobsite — there has been a notable reduction in costs related to worker injuries.

“If we go back to when I joined the company, the previous year, we paid out $2.2 million in workers’ compensation claims,” says Bacon. “In 2005, two years later ... we saw our workers’ compensation claims go down to just over $300,000. In the first quarter of this year, we’re down to about $5,400. That’s pretty remarkable, given the size of our company.”

Bacon says that ultimately, the success of the worker safety program or any other initiative that a company undertakes is tied closely to how top management, including the CEO, demonstrates it commitment to it. Lip service won’t do. The CEO has to be fully on board to make it work.

“It’s leadership, it’s got to come from the heart, whether it’s safety or some other initiative you’re driving in your company,” says Bacon. “The CEO must be passionate about it. I have to live it as much as they do.”

How to reach: Limbach Facility Services LLC, www.limbachinc.com