Leading Beyond the Fence Line

Energy companies can reduce fatalities by influencing their environments

Despite significant progress, the oil industry remains a dangerous place. Major oil companies have reduced internal fatalities and safety incidents, but problems with contractors and those outside of corporate control persist.

According to the Bureau of Labor Statistics, the oil and gas fatality rate for 2013 was 24.2 deaths per 100,000 workers. That is 7.6 times higher than the all-industry rate of 3.2 deaths per 100,000 workers.

To push progress beyond the direct employees, energy companies should consider borrowing a concept from psychology. Company leaders must believe they can affect the safety of people who are not their direct reports, they must exhibit a so-called “internal locus of control.”

The super majors, for example, have reduced personal injuries and fatalities because of a sustained effort to improve asset design, maintenance, and operations, and to focus on safe behavior. During the past five years, these companies, each with around 100,000 employees, have reached a safety plateau, with a few fatalities annually. This reflects great success in reducing employee fatalities at company-owned facilities, but fatalities outside of the companies’ direct influence, involving, for example, road incidents and contractors remain constant.

By developing leaders’ internal locus of control, energy companies could inspire a dramatic shift in thinking that could extend the safety progress beyond the fence line.

Leading Beyond the Fence Line