“If you do what everyone else does, you will get what everyone else gets.”

― Stephen Richards

In our last episode, Paul O’Neill, Part 2, I spent time laying out much of Paul’s early experience.  I did this because I wanted to convey that O’Neill was, as I mentioned at the beginning of this series, one of us. He came from humble beginnings and through the utilization of his talents and experience, he made great things happen.

Thanks again to Charles Duhigg and the research and interviews he put together to tell Paul O’Neill’s Alcoa story in his book The Power of Habit. It is because of him, we get to see what Paul did in detail…

Real quick side note before we begin. Duhigg’s accounting of O’Neill’s tenure at Alcoa is the best, and most detailed I can find. Which is why I am using it here.

“I’m really glad to be here,” O’Neill told a room full of workers at a smelting plant in Tennessee a few months after he was hired. Not everything had gone smoothly. Wall Street was still panicked. The unions were concerned. Some of Alcoa’s vice presidents were miffed at being passed over for the top job. And O’Neill kept talking about worker safety.

“I’m happy to negotiate with you about anything,” O’Neil said. He was on a tour of Alcoa’s American plants, after which he was going to visit the company’s facilities in 31 other countries. “But there’s one thing I’m never going to negotiate with you, and that’s safety. I don’t ever want you to say that we haven’t taken every step to make sure that people don’t get hurt. If you want to argue with me about that, you’re going to lose.”

The brilliance of this approach was one was that no one, of course, wanted to argue with O’Neill about worker safety. Unions had been fighting for better safety rules for years. Managers didn’t want to argue about them either, since injuries meant lost productivity and low morale.

What most people didn’t realize, however, was that O’Neill’s plan for getting to zero injuries entailed the most radical realignment in Alcoa’s is history. The key to protecting Alcoa employees, O’Neill believed, was understanding why injuries happened in the first place. And to understand why injuries happened, you had to study how the manufacturing process was going wrong. To understand how things were going wrong, you had to bring in people who could educate workers about quality control and the most efficient work processes, so that it would be easier to do everything right, since correct work is also safer work.

In other words, to protect workers, Alcoa needed to become the best, most streamline aluminum company on Earth.

O’Neill’s safety plan, in effect, was modeled on the habit loop. He identified a simple cue: an employee injury. He instituted an automatic routine: Any time someone was injured, the unit president had to report it to O’Neill within 24 hours and present a plan for making sure the injury never happened again. And there was a reward: The only people who got promoted were those who embraced the system.

Unit presidents were busy people. To contact O’Neill within 24 hours of an injury, they needed to hear about an accident from their vice presidents as soon as it happened. So vice presidents needed to be in constant communication with floor managers. And four managers needed to get workers to raise warnings as soon as they saw a problem and keep it a list of suggestions nearby, so that when the vice president asked for a plan, there was an idea box already full of possibilities. To make all of that happen, each unit had to build new communication systems that made it easier for the lowliest worker to get an idea to the loftiest executive, as fast as possible. Almost everything about the company’s rigid hierarchy had to change to accommodate O’Neill’s safety program. He was building new corporate habits.

As Alcoa’s safety patterns shifted, other aspects of the company started changing with startling speed, as well. Rules that unions had spent decades opposing- such as measuring the productivity of individual workers- were suddenly embraced, because such measurements helped anyone everyone figure out when part of the manufacturing process was getting out of whack, posing a safety risk. Policies that managers had long resisted- such as giving workers autonomy to shut down a production line when the pace became overwhelming- were now welcomed, because that was the best way to stop injuries before they occurred. The company shifted so much that some employees found safety habits spilling into other parts of their lives.

“Two or three years ago, I’m in my office, looking at the Ninth Street bridge out the window, and there’s some guys working who aren’t using correct safety procedures,” said Jeff Shockey, Alcoa’s current safety director. One of them was standing on top of the bridge’s guard rail while the other held on to his belt. They weren’t using safety harnesses or ropes. “They worked for some company that has nothing to do with us, but without thinking about it, I got out of my chair, I went down five flights of stairs, walked over the bridge and told these guys, hey, you’re risking your life, you have to use a harness and safety gear.” The men explained their supervisor had forgotten to bring the equipment so Shockey called the local Occupational Safety and Health Administration office and turned the supervisor in.

“Another executive told me one day, he stopped at a street excavation near his house because they didn’t have a trench box, and gave everyone a lecture on the importance of proper procedures. It was the weekend, and he stopped his car, with his kids in the back, to lecture city workers about trench safety. That isn’t natural, but that’s kind of the point. We do this stuff without thinking about it now.”

 O’Neill never promised that his focus on worker safety would increase Alcoa is profits. However, as his new routines moved through the organization, costs came down, quality went up, and productivity skyrocketed. If molten metal was injuring workers, when it splashed, then the pouring system was redesigned, which led to fewer injuries. It also saved money because Alcoa lost less raw materials in spills. If a machine kept breaking down, it was replaced, which meant that there was less risk of a broken gear snagging an employee’s arm. It also meant higher quality products because, as Alcoa discovered, equipment malfunctions were a chief cause of subpar aluminum.

Researchers have found similar dynamics and dozens of other settings, including individual’s lives.

Studies have documented that families who habitually eat dinner together seem to raise children with better homework skills, higher grades, greater emotional control, and more confidence. Making your bed each morning is correlated with better productivity, a greater sense of well-being, and stronger skills sticking with a budget. It’s not that a family meal or tidy bed causes better grades or less frivolous spending. But somehow those initial shifts start chain reactions that help other good habits take hold.

If you focus on changing or cultivating keystone habits, you can cause widespread shifts. However, identifying keystone habits is tricky. To find them, you have to know where to look. Detecting keystone habits means searching out certain characteristics. Keystone habits offer what is known within academic literature as “small wins.” They help other habits to flourish by creating new structures, and they establish cultures where change becomes contagious.

But as O’Neill and countless others have found, crossing the gap between understanding those principles and using them requires a bit of ingenuity.

Six months after Paul O’Neill became CEO of Alcoa, he got a telephone call in the middle of the night. A plant manager in Arizona was on the line, panicked, talking about how an extrusion press had stopped operating and one of the workers- a young man who had joined the company a few weeks earlier, eager for the job because it offered health care for his pregnant wife- had tried to repair. He had jumped over a yellow safety wall surrounding the press and walked across the pit. There was a piece of aluminum jammed in the hinge on a swinging six-foot arm. The young man pulled on the aluminum scrap, removing it. The machine was fixed. Behind him, the arm re-started its arc, swinging toward his head. When it hit, the arm crushed his skull. He was killed instantly.

Fourteen hours later, O’Neill ordered all the plant’s executives- as well as Alcoa’s top officers in Pittsburgh- into an emergency meeting. For much of the day, they painstakingly re-created the accident with diagrams and by watching videotapes again and again. They identified dozens of errors that had contributed to the death, including two managers who had seen the man jump over the barrier but failed to stop him; a training program that hadn’t emphasized to the man that he wouldn’t be blamed for a breakdown; lack of instructions that he should find a manager before attempting a repair; and the absence of sensors to automatically shut down the machine when someone stepped into the pit.

“We killed this man,” A grim faced O’Neill told the group. “It’s my failure of leadership. I caused his death. And it’s the failure of all of you in the chain of command.”

The executives in the room were taken aback. Sure, a tragic accident had occurred, but tragic accidents were part of life that Alcoa it was a huge company with employees who handled red hot metal and dangerous machines. Paul had come in as an outsider and there was a lot of skepticism when he talked about safety, said Bill O’Rourke, a top executive. We figured it would last a few weeks and then he would start focusing on something else. But that meeting really shook everyone up. He was serious about this stuff serious enough that he would stay up nights worrying about some employee he’d never met. That’s when things started to change.

Within a week of that meeting, all the safety railings Alcoa’s plants were repainted bright yellow, and new policies were written them. managers told employees not to be afraid this is to suggest proactive maintenance and rules were clarified so that no one would attempt to unsafe repairs. The newfound vigilance resulted in a short term noticeable decline in the injury rate. Our core Alcoa experienced a small win.

Then, Neil pounced.

I want to congratulate everyone for bringing down the number of accidents. Even just for two weeks. You wrote in a memo that made its way through the entire company. We shouldn’t steal it we shouldn’t celebrate because we followed the rules or brought down the number we should celebrate because we are saving lives.

Workers made copies of the note and taped it in their lockers. Someone painted a mural of O’Neill on one of the walls of a smelting plant with a quote from the memo inscribed underneath just as Michael Phelps routines had nothing to do with swimming and everything else to do with this discuss. So O’Neill’s efforts began snowballing into changes that were unrelated to safety, but transformative. nonetheless.

I said to the hourly workers, if your management doesn’t follow up on safety issues, then call me at home. Here’s my number O’Neill told me, workers started calling but they didn’t want to talk about accidents. They wanted to talk about all these other great ideas.

The Alcoa plant that manufactures aluminum siding for houses, for instance, had been struggling for years because executives would try to anticipate popular colors and inevitably gets wrong. They would pay consultants millions of dollars to choose shades of paint, and six months later, the warehouse would be overflowing with sunburst yellow, and out of suddenly in demand hunter green one day a low level employee made a suggestion that quickly worked its way to the general manager. If they grouped all the painting machines together, they could switch up the pigments faster and become more nimble and responding to shifts in customer demand. Within a year profits on aluminum siding doubled.

The small wins that started with O’Neill’s focus on safety created a climate in which all kinds of new ideas bubbled up.

And turns out this guy had been suggesting this painting idea for a decade but hadn’t told anyone in management and Alcoa executive told me then he figures since we keep on asking him for his safety recommendations. Why not tell him about this other idea? And it was like he gave us the winning lottery numbers

when a young Paul O’Neill was working for the government and creating a framework for analyzing federal spending on health care, one of the foremost issues concerning officials was infantry infant mortality. The United States at that time was one of the wealthiest countries on the earth and yet it had a higher infant mortality rate than most of Europe and some parts of South America. Rural areas in particular saw a staggering number of babies die before their first birthday is.

O’Neill was tasked with figuring out why. He asked other federal agencies to start analyzing infant mortality data and each time someone came back with an answer. He’d asked another question, trying to get deeper to understand the problems root causes. Whenever someone came to O’Neill’s office with some discovery, O’Neill would start interrogating them about new inquiries. He drove people crazy with this never ending push to learn more to understand what was really going on. I love Paul O’Neill, but you could not pay me enough to work for him again. One official told me that man has never encountered an answer he can’t turn into another 20 hours of work.

Some research, for instance, suggested that the biggest cause of infant deaths was premature births. And the reason babies were born too early was that mothers suffered from malnourishment during pregnancy. So to lower lower infant mortality, improve mother’s diets. Simple right. But to start missing, malnourishment, women had to improve their diets before they became pregnant, which meant the government had to start educating women about nutrition before they became sexually active, which meant officials had to create nutritions curriculums inside high schools.

However, when O’Neill began asking How about how to create those curriculums, he discovered that many high school teachers in rural areas didn’t know enough basic biology to teach nutrition. So the government had to remake how teachers were getting educated in college and give them a stronger grounding in biology so that they could eventually teach nutrition to teenage girls so that those teenage girls would eat better before they started having sex and eventually be sufficiently nourished when they had children.

Poor teacher training the officials working on the working with O’Neill finally figured out was a root cause of high infant mortality. If you asked doctors or public health officials for a plan to fight infant deaths, none of them would have suggested changing how teachers trained. They wouldn’t have known there was a link, however, by teaching college. However, by teaching college students about biology you made it possible for them to eventually pass on knowledge to teenagers who started eating healthier, and years later gave birth to stronger babies. Today, the US infant mortality rate is 68% lower than when O’Neill started the job.

O’Neil’s experiences with infant mortality illustrate the second way that Keystone Habits encourage change by creating structures that help other habits to flourish. In the case of premature deaths changing call and collegiate curriculums for teachers started the chain reaction that eventually trickled down to how girls were educated in rural areas and whether they were sufficiently nourished when they became pregnant. And Neil’s habit of constantly pushing other bureaucrats to continue researching until they found a problems root causes overhaul how the government thought about problems like infant mortality.

O’Neill’s safety habits had created an atmosphere in which other behaviors emerged. Early on, O’Neill took the unusual step of ordering Alcoa has offices around the world to link up in an electronic network. This was in the early 80s When large international networks weren’t usually connected to people’s desktop computers. O’Neill justified this order by arguing that it was essential to create a real time safety data systems that managers could use to share suggestions. As a result, Alcoa developed one of the first daily worldwide corporate mail systems.

O’Neal logged on every morning and sent messages to make sure everyone else was logged on as well. At first, people use the network primarily to discuss safety issues. Then, as email habits became more ingrained and comfortable, they started posting information on all kinds of topics such as local market conditions, sales, quotes, and business problems. High ranking executives were required to send in a report every Friday, which anyone in the company could read. A manager in Brazil used the network to send a colleague in New York data on changes in the price of steel. The New Yorker took that information and turn a quick profit for the company on Wall Street. Pretty soon everyone was using the system to communicate about everything. “I would send in my accident report, and I knew everyone else read it, so I figured, why not send pricing information, or intelligence on other companies?” one manager told me. “It was like we had discovered a secret weapon. The competition couldn’t figure out how we were doing it.”

When the web blossomed, Alcoa was perfectly positioned to take advantage. O’Neil’s keystone habit, worker safety had created a platform that encouraged another practice email years ahead of their competitors.

By 1996, Paul O’Neill had been at Alcoa for almost a decade. His leadership had been studied by the Harvard Business School in the Kennedy School of Government. He was regularly mentioned as a potential commerce secretary or Secretary of Defense. His employees and the unions gave him high remarks. Under his watch Alcoa stock had written risen more than 200%. He was at last universally acknowledged to success.

In the May of that year had a shareholder meeting in downtown Pittsburgh, a Benedictine nuns stood up during the question and answer session and accused O’Neil of lying Sister Mary Margaret represented a social advocacy group concerned about wages and conditions inside an Alcoa plant in C u dot Hakuna Mexico, Mexico. Yeah. She said that while O’Neill extolled Alcoa as safety measures, workers in Mexico were becoming sick because of dangerous fumes.

It’s untrue. O’Neill told the room on his laptop he pulled up the safety records for the Mexican plant. See, he said showing the room its high scores on safety, environmental compliance and employee satisfaction surveys. The executive in charge of the facility Robert Barton was one of Alcoa’s most senior managers. He had been with the company for decades and was responsible for some of their largest partnerships. The nun said, they aren’t that the audience shouldn’t trust O’Neill and she sat down.

After the meeting, when Neil asked her to come to his office, the nuns religious order owned 50 Alcoa shares, and for months they had been asking for a shareholder vote on a resolution to review the company’s Mexican operations. O’Neill asked Sister Mary, if she had been to any of the plants herself. She told him no. To be safe, O’Neill asked the company’s head of human resources and General Counsel to fly to Mexico to see what was going on.

When the executives arrived, they poked around the Akun your plant plants records and found reports of an incident that had never been sent to headquarters. A few months earlier, there had been a buildup of fumes within a building. It was a relatively minor event. The plants executive Barton had installed ventilators to remove the gases. The people who had become ill had fully recovered within a day or two.

But Barton had never reported the illnesses.

When the executives returned to Pittsburgh and presented their findings O’Neill had a question.

“Did Bob Barton know that people had gotten sick?”

“We didn’t meet with him,” they answered. “But yeah, it’s pretty clear that he knew.”

Two days later, Barton was fired.

The exit shot outsiders, Barton had been mentioned in articles as one of the company’s most valuable executives. His departure was a blow to employ important joint ventures.

Within Alcoa, however, no one was surprised. It was seen as an embedded inevitable extension of the culture that O’Neill had built.

“Barton fired himself,”  one of his colleagues told me. “There wasn’t even a choice there.”

This is the final way that Keystone Habits encourage widespread change. By creating cultures where new values become ingrained. Keystone Habits make tough choices, such as firing a top executive easier, because when the person violates the culture, it’s clear they have to go. Sometimes these cultures manifest themselves in special vocabularies user which becomes itself a habit that defines an organization. For instance, at Alcoa, there were core programs and safety philosophies, phrases that acted like suitcases containing whole conversations about priorities, goals, and ways of thinking.

It might have been hard to another company A again

“It might have been hard at another company to fire someone who had been there so long,” O’Neill told me. “It wasn’t hard for me. It was clear that our about what our values dictated. He got fired because he didn’t report the incident. And so no one else had the opportunity to learn from it. Not sharing an opportunity to learn is a cardinal sin.”

In 2001, only old retired from Alcoa and at the request of the newly elected President George W. Bush became Secretary of the Treasury. He left that post two years later and today spends most of his time teaching hospitals, how to focus on worker safety and Keystone Habits that can lower medical error rates, as well as serving on various corporate boards. Companies and organizations across America in the meantime, have embraced the idea of using Keystone Habits to remake workplaces and IBM. For instance, Lou Gerstner rebuilt the firm by initially concentrating on one keystone habit IBM’s research and selling routines at the consulting firm McKinsey and Company. A culture of continuous improvement was created through a keystone habit of wide-ranging internal critiques that are at the core of every assignment within Goldman Sachs. A keystone habit of risk assessment, undergrads every decision.

And at Alcoa, O’Neill’s legacy lives on. Even in his absence, the injury rate has continued to decline. In 2010, 82% of Alcoa locations didn’t lose one employee day due to injury, close to an all-time high. On average, workers are more likely to get injured at a software company, animating cartoons for movie studios, or doing taxes as an accountant than handling molten aluminum at Alcoa.

“When I was made a plant manager,” said Jeff Shockey, the Alcoa executive, “the first day I pulled into the parking lot I saw all these parking spaces near the front doors with people’s titles on them. The head guy for this or that. People who were important got the best parking spots. The first thing I did was tell a maintenance manager to paint over all the titles. I wanted whoever got to work earliest to get the best spot. Everyone understood the message: Every person matters. It was an extension of what Paul was doing around worker safety. It electrified the plant. Pretty soon, everyone was getting to work earlier each day.”

O’Neill died at his home in Pittsburgh on April 18, 2020, aged 84, from lung cancer. He is survived by a sister, a brother, his four children, twelve grandchildren and fifteen great-grandchildren.

Imagine the number of parents, grand parents, sons and daughters, grandchildren and great grandchildren that are alive because of the systems, processes, and care Paul O’Neill for the people with whom he had influence.

Well, I think we have done a good job of diving into Paul O’Neill’s actions in creating process as he took the helm at Alcoa. In the coming episodes, we will continue to dive deeper into these ideas, reasoning, and real-world observations and how our actions are pertinent within our lives, businesses, and organizations today.

Links to all the quoted resources are in the show notes and in the transcript on my website, Eddiekillian.com

Join me next Tuesday as we continue to travel the path of what is difficult, perilous, and uncertain as we explore introducing A New Order of Things.

I am your host, Eddie Killian. And this concludes Episode 20.

References

Duhigg, C. (2014). The Power of Habit: Why We Do What We Do In Life and Business. New York: Random House trade Paperbacks.

Paul H. O’Neill, S., Graban, M., Segel, K., Webster, G., O’Neill Jr., P. H., & Toussaint, J. (2020). A Playbook for Habitual Excellence: A Leader’s Roadmap from the Life and Work of Paul H. O’Neill, Sr. Independently Published.

Paul O’Neill Legacy. (n.d.). pauloneilllegacy.com. Retrieved July 6, 2022

Suskind, R. (2004). The Price of Loyalty: George W, Bush, the White House, and the Education of Paul O’Neill. New York: Simon & Schuster.

VIDEO: Paul O’Neill on Safety Leadership- https://www.youtube.com/watch?v=0gvOrYuPBEA