From a cost versus benefit perspective, it is understood that value must justify the cost for leadership buy-in. These decisions are made regardless of the underlying motivation, which has consistently caused a disconnect between the safety technology industry and adoption.
To date, the most significant challenge is providing quantifiable ROI figures based on the success rate of avoided incidents. Unfortunately, there is no easy way to prove the adoption of safety technology will save money, because 1) the success of safety systems are still predominantly dependent on the end user, and 2) no two organizations will arrive at the same costs, even when measuring identical components of safety, so no set analysis has been established.
Tracking the costs of safety can be a complicated and time-consuming process. But with a set goal, reliable cost model, and well-defined boundaries for data collection, it is possible.
According to the International Risk Management Institute (IRMI), safety costs can be divided into two categories: safety-producing activities and 'nonsafety' costs. By tracking these two costs, you can track how the numbers change over time, showing where investments in safety can reduce the cost of 'nonsafety' for your organization.
"Nonsafety costs are those expenditures resulting from a lack of safety, such as accidents, incidents, and lawsuits," Ron Prichard, Expect Commentator for the IRMI said. By collecting the indirect costs, which commonly include lost productivity, diverted management attention, delays, accident investigation, many find that the cost can be upward of four times the direct damages.
"However, with serious accidents, these expenses can rise to 10-15 times the direct costs, especially if litigation ensues," Prichard continued. "Occupational Safety and Health Act (OSHA) fines and other penalties are also usually considered nonsafety related expenses.
"When done properly, safety efforts prevent incidents. Over time, the benefit of preempting incidents begins to have a less obvious cost benefit as incidents become fewer. Thus, collecting good data in the early implementation phases becomes a factor in continuing to demonstrate value over time" (IRMI, The Cost of Safety).
Unfortunately, until value justifies the cost, management will continue to see safety technology as an added cost that doesn't help the company's bottom line. Which is because the most common way to recuperate their money, as we have found, is by encountering a zero incident rate.
The End User
We remain on the road towards higher levels of automation as safety technologies continuously develop. This has left control and the ultimate success in avoiding incidents still dependent on the implementation and individual use of end users. Most of the systems available to heavy-duty industries today are still dependent on implementation and the users, use of the technology, predominantly because it is still uncommon for vehicles and equipment to be fully autonomous.
It is important to recognize people will sometimes make mistakes, and although safety technology does minimize the occurrence and likelihood of these, safety features aren't a substitute for safe, defensive driving. Safety technology does not replace your safety culture; it enhances it. Top-down support of best safety practices, education, skill acquisition, and training are recommended for creating and sustaining successful, efficient, and safe operations.
Shaping Effectiveness as a Leader
As leaders first and foremost, owners and managers hold the power to influence the lives of others – particularly because leaders’ actions can heavily affect the well-being of others. The authority to make decisions as a leader goes hand in hand with the obligation a leader has to use his or her power for the common good.
At the heart of every successful company are the people who make it possible.
Employee response to adoption can be, arguably, one of the most influential data points for safety technologies qualitative ROI. To enhance your safety culture, the first step is adopting a growth mindset and taking a proactive approach to every obstacle, big or small.
With power comes the moral aspect of leadership, which truly shapes how effective leaders are. In bringing leaderships to focus back to people, the key to being successful is enhancing your safety culture with safety technology and best practices.
Technology has come a long way since the early 2000s. Evolving to bring improvements to safety and our daily lives today. Safety technology, at its core, is about improving and protecting life. By defending things of value, safety technology like PreView Side Defender®II save more than lives when helping operators avoid incidents – they save money - justifying its quantitative and qualitative value.
Note: The MVI Cost Calculator is a great tool to build your safety costs model from.