Zero Culture Begins at the Top - Part 1

Saturday, February 14, 2004 | 0

"The Courage to Change"

Part 1 of a 3 part series.

Once we find our comfort zone, we tend to stay there. That's because change can be hard. Change involves planning, risk, and work. And it's simply easier for people to keep repeating the same old patterns-even if they no longer work. And what goes for us also goes for the companies we run.

I have seen this play-it-safe pattern in many businesses throughout the country. There's a great deal of talk about change and about plans for the future, but when it comes to action, nothing really happens.

Some businesses do embrace change, and the results are remarkable. I've seen sleepy, dormant companies get a spark of new life and become leaders in their industry. The transformation is almost miraculous. It's like the person who has been a smoker all his life and suddenly quits. He sees the light. He sees his purpose. He gets the point. Something has happened inside, and a dramatic change takes place.

I've been a workers' compensation insurance broker for the past 16 years, and I have had the pleasure of doing business with more than 350 small to large employers in a variety of industries. I've worked with companies with perfect safety records and I've worked with companies that have had some of the worst safety records in their industries.

I've seen vast differences in workers' compensation costs between companies within the same industry. One struggling company was forced to pay 300 percent more for workers' compensation than its competitors. I've seen these workers' compensation costs literally force second- and third-generation family-owned companies into bankruptcy.

But I've also seen visionary companies take bold steps to bring about dramatic turnarounds. A significant workers' compensation reduction program was often the saving grace that kept companies afloat during difficult times. In the end, those companies who had struggled with high costs were now in a position to buy their competitors with their excess profits!

The Ex-Mod Factor

There's one easy way to find out if you're in need of a change in your workers' compensation practices. How does your company's loss experience compare to your competitors'? If your experience modification factor is above a 1.0, which is considered average for your industry, there's a reason for it. If your experience modification historically has been above 1.0, chances are you are in need of a culture change.

Throughout the years, I've often been asked, from a workers' compensation perspective, what practices separate best-in-breed companies from the ones at the bottom of the list. The answer is actually quite simple: They became Zero Culture companies.

Zero Culture is a revolutionary mindset in which the top executive takes control of workers' compensation and instills a total cost-control culture. The company begins to practice better control over its workers' compensation costs than its competitors. Cost control is integrated into every facet of the corporate culture, from the top down. The company develops an understanding and a operational principle that when workers' compensation programs are left unchecked, workers' comp becomes a beast that devours the business.

The process of getting to-and maintaining-a Zero Culture climate may be difficult because it involves looking at failures and shortcomings. For example, what do employees say about the company when senior management is not around? Is there a feeling of apathy? Do workers believe they want to get back what is "owed" them? Is the culture conducive to filing workers' compensation claims due to absent management?

Changing the culture within your company requires a new way of thinking. It takes an analysis and understanding of the current culture and a desire to change it. Control must be asserted from the top down. In other words, the CEO must be fully committed to the company's culture change.

Many business owners tend to think: "It's my company and this is the way we've always done things around here. I'm not going to change. I'm going to do things the way I want." But limiting belief systems such as this can stagnate and cripple a company. Only after the CEO has changed will the company's culture change. Change does not happen overnight-but with patience and hard work, a company can make a dramatic shift.

Going down this path of change requires coaching. This is new territory and requires a new way of thinking. But remember this: You can either lead or you can stagnate. A company's limitations are set by the beliefs of the people who run it. Get out of your comfort zone and become a best-in-breed company that trims costs and manages workers' comp from the top down.

In the next article, we'll talk about the building blocks of a Zero Culture company.

Brent Heurter is the Founder and Chief Solutions Officer of ClearComp, a workers' compensation alternative for companies that desire to control and reduce their workers' compensation costs with guaranteed costs savings of up to 30%. Brent can be reached at 888-CLEAR-89 or email brent@clearcomp.com.

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The views and opinions expressed by the author are not necessarily those of workcompcentral.com, its editors or management.