Regulatory Damnation 35: Health and Safety

Health and Safety, generally referred to as Occupational Safety and Health (OSH) or Workplace Health and Safety (WHS) in North America, refers to regulations and regulatory management concerned with the safety, health, and welfare of employees, be they full time, part time, contingent, day labourer, or unpaid intern. In an advanced organization, it’s a key component of CSR (Corporate Social Responsibility) as the health and welfare of any person doing any task for the organization is a key concern of any responsible organization.

So why is this a damnation? Is this not only the right thing to do but something you want to do as an injured or unwell employee is not productive? It’s a damnation because in some countries of the world, it’s becoming a regulatory nightmare. And not only is failure to comply with the regulations, some of which may go beyond common sense, a huge fine, but if someone gets injured and your organization failed to comply with the regulations, in some countries (and the United States in particular) that’s a million-plus lawsuit waiting to happen.

It’s a massive risk management activity that often adds very little value to the organization.

First, you need to either have your lawyer spend cycles researching all relevant OSH laws to your business at the municipal, state, and federal levels and make sure you are fully compliant, or shell out thousands upon thousands (upon thousands) of dollars to an expert OSH law firm that will provide you a list of all regulations you need to adhere to, minimum requirements, and example programs.

Then you need to identify all hazards of the

  • physical and mechanical variety
    and make sure all personnel have the appropriate safety gear and safety training and supervision if they are new to the task
  • biological and chemical variety
    and make sure all personnel have the appropriate safety gear, training, and supervision and make sure that the risk of exposure is minimized as much as it can be (and only qualified, certified personnel are allowed in the lab where the deadly virii are kept)
  • psychosocial variety
    and make sure all personnel are kept as far away from them as possible (which may mean keeping the CEO away from general assemblies, as he* is likely a psychopath)

Then you need to document your research, your policies, your training methods, your enforcement methods, and your regular review activities in case the OSHA (Occupational Safety and Health Administration) or its equivalent comes knocking at your door (as the result of complaints, injury, and/or lawsuits).

And if you’re in Procurement, not only do you have to worry about the safety and health of your employees (who might have to travel to dangerous regions for site visits of what could be danger-ridden factories), but of your supplier’s employees as well. If their practices aren’t up to par and a major disaster happens at one of their facilities, it’s your corporate brand that is going to take the hit when the dust settles and multiple worker’s rights group are quick to point out the failings in your supply chain.

It’s yet another time-sucking task that should be easy and obvious but isn’t thanks to mountains of legislation and suppliers who care more about money than people.

* Most CEOs are men. It’s probably because (considerably) more men than women have been diagnosed as psychopaths. (If most CEOs are psychopaths and most psychopaths are men, then we have a logical explanation for why most CEOs are men outside of sexism.)

Environmental & Sustainability Damnation 23: Food Shortages

So far we’ve covered natural disasters, EMPs, water, waste, rare earth minerals, and Greenpeace, but that still leaves four environmental damnations to discuss, and the next on the list is food shortages.

A few years ago, global food reserves hit a fifty year low.
With approximately 800 Million people, which is almost 11% of the global population, food insecure, and the increased rate of natural disasters, this is scary both from a social viewpoint and a corporate viewpoint. Every time there is a food shortage, the commodity prices spike, and contracts be damned.

If a significant portion of a supplier’s crops are wiped out and it doesn’t have enough to satisfy its contracts, it can claim force majeure, and unless your organization is paying the most, it’s claiming force majeure on you and your supply is out the window. If a considerable portion of its crops are wiped out, and it theoretically could meet demand, but a considerable portion of the global supply was wiped out and prices have skyrocketed, the supplier might choose to still claim force majeure and sell to the highest bidder, contracts be damned, and while you might be able to go to court and make a case that it should have fulfilled your contracts, that could take years, and you’re certainly not getting the crop this year unless you pay market price. If a major product line depends on that crop, your organization could be out of business before it won the lawsuit and recouped any damages.

Since most crops are still grown in fields, and not greenhouses (which are not as environmentally friendly as one might think if one is trying to grow crops in the summer), the right climate is needed for a good yield. Sun and warmth, but not enough to dry the plants (and bake them to a crisp), enough rain (and irrigation), a sufficiently long growing seasons, and an absence of pest swarms. A drought can quickly wipe out a crop. A fire can quickly wipe out a crop. An earthquake that can destroy irrigation systems and storage containers can wipe out a crop. And so on. Moreover, as the rate of natural disasters increases as a result of global warming (which is a bad term because it’s not just global warming, it’s global climate change on a broad scale), the rate of natural disasters that destroy crops and lead to food commodity shortages is going to increase. Diversified supply is no longer an option, but a must. Excess production and storage in diverse locations for eventual disasters is a must. Planning ahead years at a time is a must.

It’s another damnation that does nothing but increase the complexity of your job.

Happy 1,450th Nessie!

According to legend, One Thousand, Four Hundred and Fifty years ago today, Saint Columba, an irish abbot, supposedly banished a ferocious, unidentified, water beast to the depths of the River Ness after it had killed a Pict and then tried to attack Columba’s disciple. This unidentified water beast has been equated with the Loch Ness Monster, affectionately known by the locals as Nessie.

Many believers speculate that Nessie was a plesiosaur, which, if it had a metabolism similar to modern reptiles, could allow it to live for hundreds of years. (Of course, considering how long dinosaurs have supposedly* been extinct, it’s hard to know how long they could have lived.)

 

So maybe we should be saying, Happy Birthday Nessie VII!

* Cryptozoologists have found evidence that certain dinosaur species may have survived in remote places of the planet where the climate has not changed in tens of millions of years up until recent times, at least until the time of the middle Egyptians in one case and until the time of the Aztecs in another. As this is not a blog on cryptozoology, we won’t discuss such evidence here but encourage you to do your own research if interested.

Sourcing Innovation is all for Rank and Yank in Procurement!

In particular, SI is all for yanking anyone who suggests that the right way to manage talent is to yank out the worst performers in your organization on an annual basis.

This is another prime example of a consulting cock-up from the Big 5/6 who also brought us (often courtesy of the Board of Directors, as per yesterday’s Procurement Damnation post) baseless outsourcing, unnecessary asset liquidation, and the contingent conversion.

While the doctor is all for the reassignment, or, if necessary, the removal of labour that’s not cutting it, arbitrarily hacking the bottom 10% is the dumbest move you can make. Not only does it ruin your reputation (which is why, on Glassdoor, only 62% of current and former employees would recommend Amazon.ca, which employs the rank and yank strategy, as opposed to Google which is recommended by a whopping 92% of current and former employees), but it ruins your future results.

For example, let’s say a new CPO comes in, does a deep performance review across the talent base and removes the non-performers from the organization (either by having them reassigned to another department or retiring them). If everyone who is left is a performer, arbitrarily removing the 10% of the lowest performers in the following year is equivalent to hammering a nail in her coffin with her in it.

To clarify this, let’s say the department has ten employees including three senior buyers, two intermediate buyers, two junior buyers, one full time spend analyst, one full time relationship manager, and one full time contract and compliance manager. If the performance measurement is geared towards identified savings, because the directors are dictating savings, after two years, the relationship and the contract and compliance manager will likely be gone because, doing their jobs properly, they are not identifying savings but ensuring savings identified by the buyers or analyst is realized. In fact, even if each role has its own scorecard, due to the fuzzy nature of what a relationship and compliance manager will due, it’s still quite likely that whoever fills these rolls will rank quite low and be at risk of getting the axe.

But if they don’t get the axe, then, chances are the junior buyers will because the intermediate and senior buyers, who will be more educated and experienced, will able to skew their projects and results to the performance metrics they are measured against. And that’s equivalent to the CPO nailing her coffin while she is in it because, at some point, the senior buyers are going to retire and need to be replaced by the intermediate buyers who will need to be replaced by the junior buyers, who will need a few years to become intermediate — which means that the organization will never see any junior buyers advance. (As it will be cycling a new junior buyer in every year as it cycles one out every year.) As a result, in the long term, the organization will slowly run out of intermediate, and then senior, buyers and results will diminish rapidly — to the point where all employees are equally poor, returns are dismal, and there will be no difference between cutting the bottom 10% and cutting everyone.

Get the picture?

So the next time someone suggests that the organization employ a rank and yank strategy to get better results from its talent, SI strongly recommends that you jump up and say “that’s a great idea, how about we start with you” as you hold open the door!