How Paul O'Neill Fought For Safety At Alcoa
One of my favorite leadership lessons is the story of how Paul O'Neill fought for safety at Alcoa. He led a turn around of the financial performance of the struggling aluminum manufacturer, but NOT focusing on Alcoa's stock price or revenues. Instead, he encouraged employees at all levels to fight for the safety of their coworkers by studying the process and working to become a zero-accident company. And it made all the difference.
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By most accounts, Paul O’Neill’s first speech as the new CEO of Alcoa was a complete failure.
The speech was given in a hotel ballroom not far from Wall Street, and it was meant for the investors and analysts who did business just a few blocks away. The last few years the aluminum manufacturing giant had performed poorly. Investors were nervous, and many had arrived at the hotel expecting the usual grand turnaround vision of how this new leader was going reduce overhead, improve profits and, most importantly to them, raise the stock price.
But that’s not what happened.
“I want to talk to you about worker safety,” O’Neill began.
“Every year, numerous Alcoa workers are injured so badly that they miss a day of work,” O’Neill continued. “I intend to make Alcoa the safest company in America. I intend to go for zero injuries.”
When the meeting was over, the confused attendees cleared out of the room quickly. Within minutes, investors were calling colleagues and clients with sell orders. Journalists were drafting their articles on how the new Alcoa CEO had lost his mind. But as it turned out, O’Neill’s mind was still very much intact-and it was focused not only on the right metrics.
But also, the right fight.
O’Neill’s strategy was based on the belief that Alcoa and all its employees needed a deeper focus on process. They needed to make the production process more efficient (and likely at a lower cost). But O’Neill also realized that few people outside home office accountants would be able to grasp, let alone get motivated by, streamlining the production process. “Part of leadership,” O’Neill once explained, “…is to create a crisis.”
O’Neill saw the safety record as something that would win their minds and their hearts. And it would require a deep look at the production process. But understanding the process doesn’t motivate people.
Safety could.
So, O’Neill picked a fight.
O’Neill picked a fight with the notion that industrial manufacturing came with an “acceptable” amount of risk. O’Neill wanted to fight the idea that any risk-any injury-was acceptable. It wasn’t an overnight transformation, but Paul O’Neill’s internal fight against accidents-his fight for worker safety gradually changed the systems and the culture.
O’Neill’s fight for safety didn’t just turn around accident rates-it made the whole company better. When O’Neill left Alcoa in 2000, the company’s income was five times higher than when he’d started. And its market value had increased from $3 billion to over $27 billion. It was a nearly impossible turnaround.
O’Neill’s turnaround of Alcoa is a great example of the motivating power behind the Revolutionary Fight-one of three archetypes of fights I’ve found motivate followers. Leaders pick a revolutionary fight any time they point to an aspect of the status quo and say “The whole industry finds this acceptable, and we refuse to accept that.” They can point injustice, inequality, environmental damage, or (in the case of Alcoa), the idea that any level of risk is “acceptable.” O’Neill was saying, as the leader of one of the safest companies in the industry, that they were still asking employees to take unacceptable risks. He knew that fight would motivate people far more than just “we need to raise the stock price.” And so he made safety the core of his revolutionary fight.
I love his quote that “part of leadership is to create a crisis” but I also know that not every company is in crisis all of the time. But almost every industry has something a leader can point to and say “that’s unacceptable.” And when they do, they become revolutionaries.
Not every leader can find a crisis; but every leader can find a fight.