The floor of Alcoa’s Tennessee smelting plant was tense. Newly appointed CEO Paul O’Neill was about to make his maiden appearance after taking charge. America’s largest aluminium manufacturer was losing its past glory by day. Revenues had been decreasing for some time and the share price was declining. Earlier attempts by management to make reforms had only increased tensions with the unions. Workers had burnt effigies of some managers during protests. A large number of senior executives within Alcoa were feeling betrayed. They had been side-lined and an outsider was now setting the course during a crisis. “I am willing to negotiate on everything with you but there is one thing I will never negotiate on, Safety!”, said O’Neill during his address. His sole focus on increasing safety of the working environment was not making much sense. Nevertheless, it was hard to disagree with a policy of safer working environment, at least in public.
It was only a few months after his first appearance at the shareholder meeting. The investors had serious reservations on O’Neil’s appointment as the CEO. They were eagerly waiting for his introductory address in hopes of revolutionary recovery plans. O’Neill broke off by pointing out the safety exits within the room. He continued to enlighten his audience with an elaboration of the exit plan in case of a fire emergency. When he finally addressed the elephant in the room, it was about subpar safety conditions and high injury rates among Alcoa employees. His goal was to make Alcoa a zero injury workspace. As he wrapped up his address, an investor rushed to advise his shareholders to sell Alcoa’s stock. “They have put a hippy in charge!”. The reactions of others were not much different. The accidents in Alcoa were at a high but not far-fetched for a place that manufactured aluminium. The company’s existence was at stake and newly appointed CEO was only focusing on safety. This did not resonate well with The Wall Street.
After O’Neill’s appointment, Alcoa’s profits went record high in a year. His tenure resulted in a five times increase in stock price while Alcoa also became one of the safest places to work in the world.
O’Neill had identified safety as the ‘Keystone Habit’ for improvement. It took some time for Alcoa’s executives to realise that the new CEO was actually serious about workplace safety. Up to that point, they were hoping that he will forget this escapade and will get along with routine business of running the company by the book. To cope with O’Neil’s preferences, the organization had to draw new operating rules. Any safety incident had to be reported to him within 24 hours. Most operating procedures and working environment had to be revaluated and improved to provide a safter environment. With the improved communication channels, delimited hierarchies and the welcoming of improvement suggestions from staff at all levels, Alcoa’s culture transformed. The productivity boomed and the place resumed its position as the market leader. All this, while working towards safety.
The prime minister has identified corruption as the Keystone Habit. His mostly uncompromised stance on corruption is not by choice. Facilitating the textile sector, empowering the construction industry, prioritising government’s spending on its people, building houses and new cities would not have any meaning if the cultural acceptance of corruption is not addressed.
Alcoa’s board did not have a lot of choices when they put O’Neill in charge. They stood by Paul O’Neill as The Wall Street and pretty much everyone else thrashed him for his perseverance. Among the internal troubles and belligerent competitors, board’s consistent confidence in his leadership contributed in saving Alcoa from the inevitable.
“Why not give the PDM what it wants and get on?”, one might ask. The country would then have to wait for decades before another attempt at melting the corruption culture could be made. The blow would be weaker. The surrounding environment will be harsher. The corrupts would be even stronger. For now, the cacophonic bleats about inflation and incompetence have faded. Sania Nishtar’s work, though in-progress, has already ensured nation’s reiterated confidence. Saying no to the NRO is the only way.