Sunday, July 15, 2012

Modeling Safety Culture (Part 3): Simulation Results 1

As promised in our June 29, 2012 post, we are taking the next step to incorporate our mental models of safety culture and decision making in a simple simulation program.  The performance dynamic we described viewed safety culture as a “level”, and the level of safety culture determines its ability to resist pressure associated with competing business priorities. If business performance is not meeting goals, pressure on management is created which can be offset by sufficiently strong safety culture. However if business pressure exceeds the threshold for a given safety culture level, management decision making can be affected, resulting in a shift of resources from safety to business needs. This may relieve some business pressure but create a safety gap that can degrade safety culture, making it potentially even more vulnerable to business pressure.

It is worth expanding on the concept of safety culture as a “level” or in systems dynamics terms, a “stock” - an analogy might be the level of liquid in a reservoir which may increase or decrease due to flows into and out of the reservoir.  This representation causes safety culture to respond less quickly to changes in system conditions than other factors.  For example, an abrupt cut in an organization’s budget and its pressure on management to respond may occur quite rapidly - however its impact on organizational safety culture will play out more gradually.  Thus “...stocks accumulate change.  They are kind of a memory, storing the results of past actions...stocks cannot be adjusted instantaneously no matter how great the organizational pressures…This vital inertial characteristic of stock and flow networks distinguishes them from simple causal links.”* 

Let’s see this in action in the following highly simplified model.  The model considers just two competing priorities: safety and business.  When performance in these categories differs from goals, pressure is created on management and may result in actions to ameliorate the pressure.  In this model management action is limited to shifting resources from one priority to the other.  Safety culture, per our June 29, 2012 post, is an organization’s ability to resist and then respond to competing priorities.  At time zero, a reduction in authorized budget is imposed resulting in a gap (current spending versus authorized spending) and creating business pressure on management to respond.

Figure 1
Figure 1 shows the response of management.  Actions are initiated very quickly and start to reduce safety resources to relieve budget pressure.  The plot tracks the initial response, a plateauing to allow effectiveness to be gauged, followed by escalation of action to further reduce the budget gap.

Figure 2
Figure 2 overlays the effect of the management actions on the budget gap and the business
pressure associated with the gap.  Immediately following the budget reduction, business pressure rapidly increases and quickly reaches a level sufficient to cause management to start to shift priorities.  The first set of management actions brings some pressure relief, the second set of actions further reduces pressure.  As expected there is some time lag in the response of business pressure to the actions of management.

Figure 3
In Figure 3, the impact of these changes in business pressure and management actions are
accumulated in the safety culture.  Note first the gradual changes that occur in culture versus the faster and sharper changes in management actions and business pressure.  As management takes action there is a loss of safety priority and safety culture slowly degrades. When further escalation of management action occurs it is at a point where culture is already lower, making the organization more susceptible to compromising safety priorities.  Safety culture declines further. This type of response is indicative of a feedback loop which is an important dynamic feature of the system.  Business pressure causes management actions, those actions degrade safety culture, degraded culture reduces resistance to further actions.

We invite comments and questions from our readers.

*  John Morecroft, Strategic Modelling and Business Dynamics (John Wiley & Sons, 2007) pp. 59-61.

1 comment:

  1. hey the review was very detailed and useful. thanks for sharing such an informative post.

    Finance for non financial managers


Thanks for your comment. We read them all. We'd like to display them under their respective posts on our main page but that's not how Blogger works.