instituting organizational routines that encouraged engineers to take more risks. When unmanned rockets exploded on takeoff, department heads would applaud, so that everyone would know their division had tried and failed, but at least they had tried. Eventually, mission control filled with applause every time something expensive blew up. It became an organizational habit. [105] Or take the Environmental Protection Agency, which was created in 1970. The EPA’s first administrator, William Ruckelshaus, consciously engineered organizational habits that encouraged his regulators to be aggressive on enforcement. When lawyers asked for permission to file a lawsuit or enforcement action, it went through a process for approval. [106] The default was authorization to go ahead. The message was clear: At the EPA, aggression gets rewarded. By 1975, the EPA was issuing more than fifteen hundred new environmental rules a year. [107]
“Every time I looked at a different part of the government, I found these habits that seemed to explain why things were either succeeding or failing,” O’Neill told me. “The best agencies understood the importance of routines. The worst agencies were headed by people who never thought about it, and then wondered why no one followed their orders.”
In 1977, after sixteen years in Washington, D.C., O’Neill decided it was time to leave. He was working fifteen hours a day, seven days a week, and his wife was tired of raising four children on her own. O’Neill resigned and landed a job with International Paper, the world’s largest pulp and paper company. He eventually became its president.
By then, some of his old government friends were on Alcoa’s board. When the company needed a new chief executive, they thought of him, which is how he ended up writing a list of his priorities if he decided to take the job.
At the time, Alcoa was struggling. Critics said the company’s workers weren’t nimble enough and the quality of its products was poor. But at the top of O’Neill’s list he didn’t write “quality” or “efficiency” as his biggest priorities. At a company as big and as old as Alcoa, you can’t flip a switch and expect everyone to work harder or produce more. The previous CEO had tried to mandate improvements, and fifteen thousand employees had gone on strike. It got so bad they would bring dummies to the parking lots, dress them like managers, and burn them in effigy. “Alcoa was not a happy family,” one person from that period told me. “It was more like the Manson family, but with the addition of molten metal.”
O’Neill figured his top priority, if he took the job, would have to be something that everybody-unions
“I went to basics,” he told me. “Everyone deserves to leave work as safely as they arrive, right? You shouldn’t be scared that feeding your family is going to kill you. That’s what I decided to focus on: changing everyone’s safety habits.”
At the top of O’Neill’s list he wrote down “SAFETY” and set an audacious goal: zero injuries. Not zero factory injuries. Zero injuries, period. That would be his commitment no matter how much it cost.
O’Neill decided to take the job.
“I’m really glad to be here,” O’Neill told a room full of workers at a smelting plant in Tennessee a few months after he was hired. Not everything had gone smoothly. Wall Street was still panicked. The unions were concerned. Some of Alcoa’s vice presidents were miffed at being passed over for the top job. And O’Neill kept talking about worker safety.
“I’m happy to negotiate with you about anything,” O’Neill said. He was on a tour of Alcoa’s American plants, after which he was going to visit the company’s facilities in thirty-one other countries. “But there’s one thing I’m never going to negotiate with you, and that’s safety. I don’t ever want you to say that we haven’t taken every step to make sure people don’t get hurt. If you want to argue with me about that, you’re going to lose.”
The brilliance of this approach was that no one, of course, wanted to argue with O’Neill about worker safety. Unions had been fighting for better safety rules for years. Managers didn’t want to argue about it, either, since injuries meant lost productivity and low morale.
What most people didn’t realize, however, was that O’Neill’s plan for getting to zero injuries entailed the most radical realignment in Alcoa’s history. The key to protecting Alcoa employees, O’Neill believed, was understanding
In other words, to protect workers, Alcoa needed to become the best, most streamlined aluminum company on earth.
O’Neill’s safety plan, in effect, was modeled on the habit loop. He identified a simple cue: an employee injury. He instituted an automatic routine: Any time someone was injured, the unit president had to report it to O’Neill within twenty-four hours and present a plan for making sure the injury never happened again. [108] [109] And there was a reward: The only people who got promoted were those who embraced the system.
Unit presidents were busy people. To contact O’Neill within twenty-four hours of an injury, they needed to hear about an accident from their vice presidents as soon as it happened. So vice presidents needed to be in constant communication with floor managers. And floor managers needed to get workers to raise warnings as soon as they saw a problem and keep a list of suggestions nearby, so that when the vice president asked for a plan, there was an idea box already full of possibilities. To make all of that happen, each unit had to build new communication systems that made it easier for the lowliest worker to get an idea to the loftiest executive, as fast as possible. Almost everything about the company’s rigid hierarchy had to change to accommodate O’Neill’s safety program. He was building new corporate habits.
ALCOA’S INSTITUTIONAL HABIT LOOP
As Alcoa’s safety patterns shifted, other aspects of the company started changing with startling speed, as well. Rules that unions had spent decades opposing-such as measuring the productivity of individual workers-were suddenly embraced, because such measurements helped everyone figure out when part of the manufacturing process was getting out of whack, posing a safety risk. Policies that managers had long resisted-such as giving workers autonomy to shut down a production line when the pace became overwhelming-were now welcomed, because that was the best way to stop injuries before they occurred. The company shifted so much that some employees found safety habits spilling into other parts of their lives.
“Two or three years ago, I’m in my office, looking at the Ninth Street bridge out the window, and there’s some guys working who aren’t using correct safety procedures,” said Jeff Shockey, Alcoa’s current safety director. One of them was standing on top of the bridge’s guardrail, while the other held on to his belt. They weren’t using safety harnesses or ropes. “They worked for some company that has nothing to do with us, but without thinking about it, I got out of my chair, went down five flights of stairs, walked over the bridge and told these guys, hey, you’re risking your life, you have to use your harness and safety gear.” The men explained their supervisor had forgotten to bring the equipment. So Shockey called the local Occupational Safety and Health Administration office and turned the supervisor in.
“Another executive told me that one day, he stopped at a street excavation near his house because they didn’t have a trench box, and gave everyone a lecture on the importance of proper procedures. It was the weekend, and he stopped his car, with his kids in the back, to lecture city workers about trench safety. That isn’t natural, but that’s kind of the point. We do this stuff without thinking about it now.”
O’Neill never promised that his focus on worker safety would increase Alcoa’s profits. However, as his new routines moved through the organization, costs came down, quality went up, and productivity skyrocketed. If molten metal was injuring workers when it splashed, then the pouring system was redesigned, which led to fewer injuries. It also saved money because Alcoa lost less raw materials in spills. If a machine kept breaking down, it was replaced, which meant there was less risk of a broken gear snagging an employee’s arm. It also meant higher quality products because, as Alcoa discovered, equipment malfunctions were a chief cause of subpar
