The last time you tossed a bag of Doritos into your grocery cart, did you notice anything different? Maybe a label that read: "This snack food proudly brought to you from a 100 percent injury-free factory"? No. It wasn't there. Not yet anyway. But if Keith Reynolds has his way, it could happen.
Reynolds is vice president, risk management, for Plano, Texas-based Frito-Lay Inc., winner of the 2006 Theodore Roosevelt Workers' Compensation and Disability Management Award in the for-profit category.
Reynolds and the company's dedicated corporate risk management and operations safety teams are responsible for the well-being of 45,000 employees engaged in manufacturing, field sales and distribution. Sending each and every one of those employees home to their families at the end of the day in one piece is what keeps Frito-Lay's safety and risk management teams motivated to continuously improve safety performance.
The payoff: Between 2000 and 2005, Frito-Lay reduced its injury frequency rate by an impressive 34 percent. In the same time period, the company's total workers' compensation loss rate plunged 31 percent--a $9.8 million reduction--despite an increasing exposure base and a nationwide upward spiral of workers' compensation medical costs.
The company's safety and workers' compensation programs have drawn recognition and accolades from peers, as well as the safety community at large. Occupational Hazards magazine named Frito-Lay one of America's 12 safest employers in 2005.
The program has come a long way since 1997. Faced with workers' comp costs careening out of control and injury rates in double digits, Jim Rich, then senior vice president of operations, set his jaw and said, "Enough." Rich drew a line in the sand and set the first major changes into motion. The most important change of all, however, was not a policy or procedure--it was a mindset and a vision of Frito-Lay's future.
Tom Jacob, director, operations safety, explains, "Safety to Jim was not about numbers. It was not about the cost of workers' compensation. It wasn't even about the injury frequency rate . . . It was about the thousands of associates that were all helping us to drive this great organization. He took it very personally and really helped develop that vision throughout the organization, and that continues to grow with us today."
Rich has since retired, but his legacy survives and thrives. The framework he created remains as the foundation for the company's risk management performance standards. What the current teams have built upon that foundation is a sophisticated and highly adaptable environment.
FROM ENEMIES TO ALLIES
Frito-Lay's approach to reducing workers' compensation costs is heavily weighted on safety and prevention, following the obvious logic that the most manageable injury is the one that never happens. To that end, Frito-Lay has established separate-but-equal safety centers. Operations Safety encompasses the company's 34 manufacturing plants and warehouse operations, while Sales Safety focuses on the company's route sales and distribution employees.
"We are true believers that safety ultimately is the driver of improved casualty performance," says Reynolds. "We focus relentlessly on safety and on continuing to improve our safety numbers. I'm a firm believer that the only way to win in this area is prevent accidents, injuries and vehicle collisions. Yes, we have to manage the cost on the back side, and I think we do that very effectively. But in the end, the way to win is to take care of our employees."
Reynolds' comment exemplifies the single characteristic that underlies Frito-Lay's success: its unflagging commitment to providing employees with a safe work environment. You'll find no lip service to safety at Frito-Lay. From the corporate offices in Texas to the associate driving a truckload of chips to your favorite corner store, "Safety first" is no rubber-stamped slogan on a dusty safety poster--it's a deeply held belief and a way of doing business.
The company has fearlessly chosen progressive paths in pursuit of its safety goal. One prime example: In 2000, the company took on a seemingly unlikely partner to help drive safety improvement, the federal Occupational Safety and Health Administration. While the bulk of U.S. employers cringe at the thought of OSHA showing up at their doorsteps, Frito-Lay was welcoming them in.
That was the start of Frito-Lay's involvement with OSHA's Voluntary Protection Program. VPP Star certification involves a rigorous application and evaluation process, and sites must submit to in-depth employee interviews, as well as multidimensional evaluations and measurements of the site's systems, processes, training and work environment.
The basic criterion for certification is not whether a site meets OSHA standards, but whether it actively goes above and beyond those standards to create a safe work environment. To date, 27 of Frito-Lay's facilities are VPP Star Certified, more than any other food manufacturer in the United States.
Frito-Lay's involvement with OSHA is just one facet of the company's array of safety and workers' compensation programs. Developments over the past several years have included simple but significant ergonomic upgrades, mandatory job rotation, the addition of behavior-based safety training incorporating peer-to-peer observations and coaching, mandatory periodic Smith System Driver Training and the introduction of formalized safety management training for more than 1,500 frontline managers.
All of these efforts, over time, have put Frito-Lay's safety program on a plane that most employers still aspire to.
"I don't know that we do safety training anymore," says Jacob, a statement that would evoke gasps of shock and awe at any meeting of safety or risk professionals. But it's that higher plane that he's referring to.
He explains, "I think now we're building competency within the organization. We're going out and doing ride-alongs, work-withs, making sure that people not only have the understanding and the knowledge, but can demonstrate the skills and proficiencies. I think we have clearly elevated the level of knowledge and training and experience these people have so they can make the appropriate decisions to work safely, avoid risk and continue to help us pursue our future."
100 PERCENT INVOLVEMENT
Since 2000, the company has worked tirelessly to nurture relationships with occupational-medicine providers in the vicinity of each location, and has also introduced online reporting of injuries. To further encourage timely reporting, Frito-Lay offers each location significant financial credits for each claim reported within 24 hours. In addition, the company has devoted significant efforts to continuously refining its return-to-work program. Since 2000, Frito-Lay has enjoyed a 37 percent reduction in disability durations thanks to these efforts.
The company's partnership with its third-party administrator, Sedgwick CMS, has played a major role in its dramatic gains in the past few years. Sedgwick has tailored a claims management and nurse case management program to meet Frito-Lay's needs, with dedicated supervisors, dedicated nurses and largely dedicated claims examiners working through seven hub workers' comp offices. Sedgwick execs credit Frito-Lay's high-touch approach for its outstanding gains in post-injury performance.
Robert Peterson, Sedgwick CMS executive vice president and national director of client development, says the impact that employer involvement has on the claims process cannot be overstated. "It's a true partnership, and we don't mean that as a cliché," says Peterson. "We're really engaged together all the way through the resolution, and that really does impact the bottom line. That's the kind of thing that will continue to push their results in a positive direction."
"The ownership they take of the program--that's one of the things that makes them unique," adds Kathryn Tazic, Sedgwick CMS vice president and workers' compensation practice lead. "We do a lot of analysis with them on the impact to their employees prior to implementation. That's a very results-oriented way to look at the program."
Keeping close tabs on every step in the claims management process allows Frito-Lay managers to catch any "hiccups" before they become issues that would delay the process. For instance, if an injured employee's physical therapy isn't scheduled in a timely manner, it's noticed, questioned and remedied quickly, before the delay can exacerbate the injury.
Reynolds explains that with Frito-Lay's absolute focus on doing what's best for the employees in all things, 100 percent involvement with the TPA is the company's only option. "We're an organization that does not believe that you simply file a claim, hand it off to a TPA."
Adds Jeff Stroud, Frito-Lay's corporate claims manager and liability practice leader, "We're very passionate about what we do. We're passionate about our process. We're passionate about the outcome. We're passionate about our people. Our people are what make this organization great. We've got a lot of faith in Sedgwick CMS, but ultimately, we know our people best, and we know how to manage that process to the best resolution."
Frito-Lay and Sedgwick are working together to achieve a higher plane on the claims management side as well. Reynolds says that he and Stroud are working with Sedgwick to develop even better analytic capabilities, in order to better dissect data from medical providers. The new analytics would help claims managers home in on the most advantageous treatment options for injured employees. For example, is six to eight weeks of conservative treatment for a soft-tissue strain or sprain the best way to treat the injury? Or is taking it right to a diagnostic procedure such as an MRI or a CT scan a smarter way to go?
"We always reserve the right to get smarter," says Reynolds. "We're constantly challenging our outside vendors to bring us new ideas."
But Peterson says it's what the company does with those ideas that really sets it apart from the pack. "One way to really describe their organization is, they take a great idea and make it the very best that it can be."
FULLY ENGAGED FROM DAY ONE
Risk management success at this level takes even more than commitment from upper management. It depends upon the full engagement of every employee at every level, taking ownership of the company's success. That Frito-Lay has managed to achieve this throughout its organization is arguably more impressive than any amount of cost reduction you can find in the company's books. That fact doesn't go unappreciated by management.
"We get some nice accolades, like this Teddy Award," says Jacob, "and it's really about the frontline associates who are embracing this on a day-to-day basis and who are leading the organization from a safety standpoint. They're just doing a tremendous job."
You might expect that getting 45,000 employees to embrace safety would be a monumental challenge. But Jacob says it's not necessarily as difficult as you might think, particularly if you set the tone for it from their first day on the job. He cites the example of the company's Perry, Ga., facility. Harold Bryant, the site's safety manager, never asks new employees whether they'd like to get involved in the safety process. Instead, he lays out their options and asks which safety programs they'd like to sign up for. "So from day one," he says, "Harold's getting the engagement from employees. He's telling them right up front that the expectation is to be engaged in our safety process."
Managers and supervisors sustain the momentum with varying degrees of positive reinforcement. Sales safety manager Pam Hermann says maintaining Frito-Lay's level of employee engagement means keeping the mantra "reward and recognize" in mind, and keeping the results of their efforts visible to all.
Hermann says that managers and supervisors take every opportunity to recognize good safety performance. The company recently took out a double-page ad in Transport Topics magazine to recognize the 350 or so drivers who have achieved 1 million, 2 million or 3 million miles of safe driving--that means not even a ding in a side-view mirror. About a quarter of the company's over-the-road fleet belongs to the million-mile club.
"Celebrating success is huge," says Hermann. "From the pat on the back to the thank-you card to the barbeque on the dock. It's a matter of acknowledging positive safety performance or achieving certain goals."
NEXT STEP: ONLY ZERO WILL DO
Frito-Lay's vision, from early on, has been to become the safest workplace in North America. This seemed a lofty goal, perhaps no more than a pipe dream to doubters. But as the company edges ever closer to achieving that goal, it has revisited that mission, now setting its sights on an ever grander goal: zero injuries.
Many in the safety arena brush off zero-injury goals as unrealistic and unachievable. But perhaps those folks haven't met Keith Reynolds, Tom Jacob or their remarkable teams just yet.
The combined talent, enthusiasm and drive of Frito-Lay's staff put even a zero-injury goal into the realm of the possible. We'll see. Keep your eyes on your potato-chip bag.
lives in Pennsylvania.
November 1, 2006
Copyright 2006© LRP Publications