Senior management often sees EHS programs as a cost item only, but leading process improvement expert Robert B. Pojasek says they increase profitability and company value. What’s more, he’s written a book that teaches you how to build a business case that proves it.
Yesterday’s Advisor recounted the results of a recent poll of ASSE chapter leaders on the top challenges facing the profession. At the top of the list: lack of senior management support for safety programs.
Why does this happen? According to process improvement expert Robert B. Pojasek, writing in BLR’s guide, Making the Business Case for EHS, barriers to management support include a lack of understanding of both the language and technical aspects of the EHS manager’s job, and no seeming way to make a return on EHS activities. Instead, EHS programs are seen as unavoidable costs, imposed by regulation, insurers, or moral needs. But contributors to financial success? Not at all.
Yet, that’s exactly what EHS measures can be, says Pojasek. Here’s why:
Learn to communicate your ideas to senior management the easy way … with BLR’s award-winning reference, Making the Business Case for EHS. Try it at no cost and no risk. Click for details.
One Process Improvement Begets Others. EHS is often seen as an isolated activity, actually restrictive to productivity and profit. However, Pojasek maintains that improving safety often enhances overall operational efficiency, by increasing attendance and cutting workers’ comp, legal, and other costs. He also maintains that improvements in one area often flow to others, up or downstream. He recommends EHS managers learn the language of process flow to be able to show the full positive effect.
Stakeholder Relations Improved. Managers and employees are not the only stakeholders in a business. Customers, vendors, creditors, and the community also have an interest, and their view often prevails over management. Pojasek suggests making it clear how EHS programs improve the organization’s image in the eyes of these other stakeholders.
Intangible Value Increased. “Between 50% and 90% of a firm’s market value can be attributed to intangibles that include EHS intangibles,” Pojasek points out. And while operational managers may not take note of intangibles day to day, they figure mightily in investors’, banks’ and insurers’ decisions about the company. “This is a rapidly developing area,” says Pojasek, “and one [EHS professionals] should get involved with because of the impact … on the perception of business value of the EHS program in your company.”
To preach these gospels to senior management, however, requires you to learn their language. To use the tools management values—performance-based metrics and financial analyses, among them—to build support for your program at the top. Equipping you with these tools is the reason for Making the Business Case for EHS. Using this resource, you will be able to:
Define and align EHS goals as business value goals, such as increasing shareholder worth or return on invested capital.
Analyze your company’s processes and show how EHS improvements can be productivity improvements, as well.
Demonstrate how processes are interconnected, so that improvements in one area ripple out into others.
Use Activity-Based Costing (ABC) accounting to isolate how money is being spent, so EHS costs can be reduced or justified without losing safety and compliance.
Create metrics to measure the goals you’ve established, and create a single sheet of paper scorecard to make it easy for management to see that progress.
The Tools You Need to Make Your Case
To sell the case you’ve built, the book provides:
10 Business Value Principles to serve as guide points as you work through the financial maze. They teach you to write your own plans in terms of the overall company program. __________________________________________________________________
BLR’s Making the Business Case for EHS has all the charts, terms, and tools you need to get your ideas into the C-suite and come out with approval for your programs. Try it at no cost or risk. Click for more info.
8 Business Value Tactics. Principles are of little help without action steps to put them to work. The author’s 8 business tactics set up a hierarchical analysis of your company’s programs, find those EHS improvements that help most, sell an action plan to make change happen, and report it as it does.
3 Case Studies for a typical small, medium-sized, and larger business.
Senior Management FAQs. What questions will C-level executives ask as you seek approval of your program? Here are 28 common queries and the detailed answers to give.
Glossary. If you’re not familiar with terms like “bubble-up/bubble-down,” “economic value added,” or “real options,” you will be after using this part of the book.
Forms, tables, and checklists are all included as reproducibles, and also on a CD, which lets you edit and add your company-specific details for a polished presentation.
Making the Business Case for EHS is available for a no cost evaluation for up to 30 days. If, like the ASSE leaders, you could benefit from more support from the top, this program can be the means to get it. Click one of the ordering links above for a no-cost look at what it can do.
