Accidents Can Happen to the Best Companies: Are You Ready?
Building a healthy safety culture is not for the weak. If you play in this arena long enough, odds are that you will see your share of disturbing accidents. We hope that the tools in this book will help you greatly mitigate this risk, but it would be foolish not to be prepared.
An excerpt from the much anticipated release of Leading People Safely: How to Win on the Business Battlefield
Building a healthy safety culture is not for the weak. If you play in this arena long enough, odds are that you will see your share of disturbing accidents. We hope that the tools in this book will help you greatly mitigate this risk, but it would be foolish not to be prepared. You must deal with your own fears or anxiety, which could undermine your ability to lead your team in a bold new direction. The fear of a tragic accident or injury can be paralyzing. The tools in this book will allow you to rest a little bit easier, knowing that you have done everything in your control to prevent accidents. That said, it is important that you find ways to keep any fears at bay while focusing on sustaining the healthy culture you have begun to shape.
Sometimes our anxiety stems from mega-fears about the state of our companies, especially if something goes wrong. Sometimes fears emerge from our personal lives. These fears frequently crop up because we are not adequately protected against calamities.
When you are worried about all the things that could go wrong, you can’t lead your business with a clear head. That means you can’t grow and protect your culture, either. You risk being too distracted to implement and continue to use these culture-building tools. Something else threatens to cast a larger shadow over your day-to-day leadership.
Therefore, it’s vital to find ways to head off these crippling fears. The old saying that “the best offense is a good defense” is true and relevant here. Take the precautionary measures that can stop these fears before they show up.
Based on our own experience and what we have seen with countless other leaders and companies of all sizes, here are some typical realms where it pays to execute defensive maneuvers:
Make sure you have adequate personal insurance. You need to feel confident that you will be covered if you are sued personally as the result of your acts or omissions in the performance of your corporate duties. Carry a personal umbrella with limits, depending on your individual factors. In today’s world, $10 million should be the least you consider. If your business is set up right, you should not be personally liable. Still, that won’t prevent someone from suing you personally, and it may not prevent a jury from piercing through the company if its assets are not sufficient to handle the claim. Don’t get caught relying on theory rather than reality. Protect yourself against reality.
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Take out solid directors and officers (D&O) liability insurance, as well as employer’s liability insurance. You’re not the only individual in your company who could be named in a suit, and you need to be prepared. When choosing your coverage, don’t simply land on a nice round number. Carry the limits that most closely match your worst-case assessment.
Take active steps to keep your personal assets and business assets out of reach of creditors if your business should fail. Talk to an experienced estate planning attorney to strategize the best options to put certain personal assets in trust so creditors can’t get at them. This is not something you should entrust your general attorney to handle. Find an estate planner with experience working with business people, someone who does not need to be educated about the risks or the action steps to avoid them.
Similarly, if you have multiple businesses inside one company with different risk profiles, divide the businesses into separate companies. If you have an asset-heavy company with operating risk, consider forming a leasing company to lease the assets to the operating company. Complicated? Maybe. Fee intensive? Often. However, if everything blows up, you will feel pretty good that you have protected your company and your shareholders.
Insure for the worst-case scenario to the extent allowed by your budget. Don’t view insurance as existing to take care of the small paper cuts. Insurance is there for a potentially severe accident. Having $2 million in general liability insurance sounds like extensive coverage. In reality, it is a drop in the bucket under the wrong scenario. Buy as much umbrella coverage as needed to protect against a reasonable worst case. Consider taking more front-end risk (e.g., greater deductibles) in exchange for higher coverage limits. Large insurance limits will allow you to think more clearly, knowing that a major accident or injury is less likely to threaten your business’s existence.
Most importantly, have a disaster plan prepared in detail. If tragedy strikes, you need to begin execution mode immediately and 24/7. This is not the time to be asking, “What should we do now?”
You and your entire leadership team must know in detail who is responsible for each aspect of managing the crisis. Ensure that your team includes the right people inside your company as well as properly qualified attorneys, adjusters, and public relations managers. At the same time, understand that the incident is likely to be a distraction for your team, your customers, and possibly the public. Make certain that your disaster plan includes a commitment to transparently communicate the issue to your employees and to allow those not involved in its resolution to return to work with clear minds. The incident, no matter how severe, cannot derail the rest of your business.
Feel free to add to this list any other subjects or areas where you recognize the need to play defense to keep your fears from blocking your way in successfully leading your company and your culture. What are the worst-case scenarios that dance across your mind or keep you up at night?Taking the time now to play some defense may be just what you need to keep focusing on your mission to build a better safety culture and achieve greater profitability and success for your company. You need to be asking yourself every day, “What else can I do to sustain and enhance our company’s safety culture right now?” To successfully accomplish this, you must have a clear head, knowing that your downside is protected.
This has been an excerpt from the much anticipated release of Leading People Safely: How to Win on the Business Battlefield