How Paul O’Neill Fought For Safety At Alcoa

By most accounts, Paul O’Neill’s first speech as the new CEO of Alcoa was a complete failure.

The speech was given in a hotel ballroom not far from Wall Street, and it was meant for the investors and analysts who did business just a few blocks away. In the last few years, the aluminum manufacturing giant has performed poorly. 

Investors were nervous, and many had arrived at the hotel expecting the usual grand turnaround vision of how this new leader was going to reduce overhead, improve profits, and, most importantly, raise the stock price.

But that’s not what happened.

The Shift to Worker Safety

“I want to talk to you about worker safety,” O’Neill began.

Almost immediately, the attitudes in the room were transformed. The energy disappeared. The room was silent.

“Every year, numerous Alcoa workers are injured so badly that they miss a day of work,” O’Neill continued. “I intend to make Alcoa the safest company in America. I intend to go for zero injuries.”

When his initial remarks had finished, most of the audience was still stunned and confused. A few veteran investors and business journalists tried to get the meeting back toward a normal CEO-to-Wall Street address. They raised their hands and asked questions about capital ratios and inventory levels. O’Neill wasn’t willing to entertain any of it.

“I’m not certain you heard me. If you want to understand how Alcoa is doing, you need to look at our workplace safety figures.”

When the meeting was over, the confused attendees cleared out of the room quickly. Within minutes, investors were calling colleagues and clients with sell orders. Journalists were drafting articles on how the new Alcoa CEO had lost his mind. But as it turned out, O’Neill’s mind was still very much intact and focused not only on the right metrics.

But also the right fight.

Example Alcoa: How Safety Transformed Its Culture

If you looked at Alcoa by the numbers, its safety record was one of the few things it was doing well. Alcoa had the best safety record in the aluminum industry. 

At the same time, its financial record was suffering. Alcoa was founded nearly 100 years before O’Neill took over, and for the first half of that, it enjoyed a virtual monopoly on aluminum production in the United States. However, antitrust regulations, stiffer competition, and an oversupply in the marketplace led to a financial crunch for the giant.

O’Neill’s strategy was based on the belief that Alcoa and all its employees needed a deeper focus on the process. They needed to make the production process more efficient (and likely cheaper). But O’Neill also realized that few people outside home office accountants could grasp, let alone get motivated by, streamlining the production process. “Part of leadership,” O’Neill once explained, “…is to create a crisis.”

O’Neill saw the safety record as something that would win their minds and hearts. And it would require a deep look at the production process. You can’t improve safety without understanding every step in the process—understanding each risk—and eliminating it. But understanding the process doesn’t motivate people.

Safety could.

O’Neill’s Fight for Safety

So, O’Neill picked a fight.

He picked a fight with the idea that something inside the company was injuring and even killing their employees. O’Neill picked a fight with the notion that industrial manufacturing came with an “acceptable” amount of risk. O’Neill wanted to fight the idea that any risk—any injury—was acceptable.

He got to work recruiting others to join him in that fight. His speech at the shareholder meeting was the first of many war declarations against whatever harmed Alcoa employees. It was strategically chosen. 

It sent the message to employees that shareholder returns weren’t his priority—employees were.

O’Neill’s commitment to leading the fight for safety would get tested early and often. About six months into his tenure, O’Neill was awoken in the middle of the night by a telephone call from a plant manager in Arizona. Earlier, a machine had stopped working when a piece of aluminum scrap had jammed a hinge on one of the machine’s large mechanical arms. 

A new employee offered to fix it. The man had only worked at the company for a few weeks—he joined because Alcoa offered free healthcare, and he and his wife recently found out they were pregnant. 

To try and fix the jam, he’d jumped over a safety wall and walked across the machine until he’d reached the jam and removed it. However, the machine sprung back into action when he cleared the jam. The six-foot-long arm swung back across its arc quickly, striking the man in the head and crushing his skull.

He died instantly from the impact.

By the end of the day, O’Neill had assembled a meeting with the plant’s executives. “We killed this man,” he told them. He was unwavering. “It’s my failure of leadership. I caused his death. And it’s the failure of all of you in the chain of command.” 

At that moment, it was clear to everyone in the room…and to everyone who would later hear about the tragedy and O’Neill’s response, unlike other industrial plants and their past. Accidents were unacceptable.

Accidents were the enemy.

In that meeting, O’Neill and the executives reviewed every detail of the accident. They watched video footage repeatedly and recreated the stages of the accident using diagrams. Eventually, they compiled a list of dozens of mistakes made by multiple parties. Two managers had seen the man jump the safety wall but didn’t stop him. 

That was a management failure, as was the man’s lack of knowledge that he should find a manager before attempting a repair. That was a failure of training. The machine should have had an automatic shut-down procedure if it sensed a human inside. That was a failure of engineering.

As a result of that incident, major changes were made quickly. All the safety railings at every plant were repainted bright yellow, and new policies and procedures were created. Perhaps most surprisingly, O’Neill sent a companywide message to all workers asking them to call him directly, even at home, to suggest new safety practices, especially if managers weren’t listening or implementing their ideas.

The Second Incident

The next big test would come midway through O’Neill’s tenure. Alcoa was making progress on their fight, but accidents still happened. At a plant in Mexico, a carbon monoxide leak went undetected as it poisoned one hundred and fifty employees. 

Each had to be treated at an emergency clinic, though thankfully, no one was killed. The senior executive in charge of the plant had installed ventilators to remove the fumes and prevent future events, but he had never reported the incident. In their individual fights to keep the accident rate at zero, a lone executive had decided to keep the accident a secret.

It wasn’t until a shareholder meeting that O’Neill even heard of the incident. A Benedictine nun from the area near the plant raised the issue. The nun’s order had heard about the tragedy in their community and purchased fifty shares of Alcoa for the express purpose of traveling to that meeting and forcing the issue. 

O’Neill sent a team down to Mexico to investigate. They gathered all the facts and concluded that the executive had most likely intentionally covered up the incident.

Two days later, he was fired.

It wasn’t an overnight transformation, but Paul O’Neill’s internal fight against accidents and his fight for worker safety gradually changed the systems and the culture

Since prioritizing worker safety meant studying the production process, the improvements also made the plants run more efficiently. Since monitoring and responding to accidents meant constantly communicating safety numbers and ideas for increasing safety, executives eventually began sharing other data and other ideas more rapidly.

O’Neill’s fight for safety didn’t just turn around accident rates—it improved the whole company. When O’Neill left Alcoa in 2000, the company’s income was five times higher than when he’d started. And its market value had increased from $3 billion to over $27 billion. It was a nearly impossible turnaround.

And it would have been impossible had O’Neill not chosen the right tactic to motivate senior executives, union representatives, and individual workers. “Increase efficiency” isn’t a rallying cry that moves anyone. Safety—protecting each other from the threat of accidents—moved nearly everyone (disgraced Mexican plant executives notwithstanding).

O’Neill picked the right fight. And that fight saved lives—and saved Alcoa.

O’Neill’s turnaround of Alcoa is a great example of the motivating power behind the Revolutionary Fight—one of three archetypes of fights I’ve found to motivate followers. Leaders pick a revolutionary fight whenever they point to an aspect of the status quo and say, “The whole industry finds this acceptable, and we refuse to accept that.” 

They can point to injustice, inequality, environmental damage, or (in the case of Alcoa) the idea that any level of risk is “acceptable.” O’Neill was saying, as the leader of one of the safest companies in the industry, that they were still asking employees to take unacceptable risks.

He knew that fighting would motivate people far more than just saying, “We need to raise the stock price.” So, he made safety the core of his revolutionary campaign.

I love his quote that “part of leadership is to create a crisis,” but I also know that not every company is always in crisis. But almost every industry has something a leader can point to and say, “That’s unacceptable.” When they do, they become revolutionaries.

Not every leader can find a crisis, but every leader can find a fight.

Why Prioritize People Over Profits

If you look at it, O’Neill’s decision to prioritize safety over profits was indeed a revolutionary move. 

What it meant was that the power of valuing people over financial performance sets the foundation of trust and loyalty in the workplace. Unlike the conventional corporate mindset, the ultimate goal changes from maximizing shareholder returns to employee well-being and safety.

When employees see that their safety and well-being are the priority, they become more engaged and, of course, committed to your organization. They are more likely to stay with you and less likely to switch to other jobs.

When employees come first, profits follow. Using O’Neill’s style, you create a culture of trust where innovation, efficiency, and productivity thrive. This creates a ripple effect that ultimately leads to achieving business goals and growth. 

Leadership Lessons from Paul O’Neill’s Approach

Paul O’Neill’s leadership style offers many lessons. Its approach is one of transparency, accountability, and empowerment. 

Instead of blaming the victim or shifting the blame, as traditional approaches do, O’Neill took full responsibility for the incident and conveyed to others that it was, in fact, the leader’s responsibility. 

Just like successes, we should own up to failures, too.

O’Neill also invited the employees to contact him directly with any ideas or safety concerns. He completely disregarded the hierarchical barriers and promoted transparent and open communication.

When employees are empowered, no matter their level in the organization, they feel a sense of ownership in the company’s vision and mission. This makes them equal partners in sharing responsibilities, which brings about cultural change and a lasting impact.

Wrap Up

Paul O’Neill’s leadership at Alcoa has many lessons to offer, but the core lesson remains: prioritizing people. Your employees are far more valuable than profitability or growth. Of course, those are an organization’s key goals, but they can be driven when you commit to providing your employees with basic safety and trust. 

Ultimately, your organization will be en route toward these goals. 

This approach became the foundation of the cultural revolution, which opened the ground for innovation, teamwork, and trust.

HOME_AboutDavidBurkus

About the author

David Burkus is an organizational psychologist, keynote speaker, and bestselling author of five books on leadership and teamwork.

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