Safety Leadership with CEO Mike Bennetts of Z Energy

 Audio Podcast available at the bottom of this post or on itunes.

  • 1:09 Why is Safety Important to Z Energy?
  • 2:40 How Does a CEO Drive Safety Performance Improvements?
  • 6:10 Why Safety is Important to Mike Bennetts
  • 10:08 Take Time to Reflect Using Other’s Examples
  • 10:53 Increase Safety in the Supply Chain (contractors etc)
  • 13:48 How to Prepare for Worksafe New Zealand
  • 16:29 Why CEO Should Embed H&S in their Business
  • 18:29 The Paradox of Safety


Mike Bennetts

Tony:               Welcome back listeners. I’m here with Mike Bennetts who is the Chief Executive of Z Energy. Now Mike has nearly 30 years working in the oil industry and Z Energy itself has over 200 shop stores and nearly 100 truck stops, about 3,000 employees or partners or contractors. Basically it’s a complicated and a dangerous business to be in. Today we’re going to get a chief executive perspective on safety in such an environment. Thanks, Mike, for coming on.

Mike:              Great. I’m very pleased to be here.

Tony:               I thought I’d start off by asking you right off the bat because I’ve been to your website and your tag line even in your e-mail and in your annual reports you can tell safety is really important. Safety first. Why is safety important to Z Energy?

Mike:              I think it actually has a number of dimensions. I think you took the most obvious one we run a hazardous business. All the products we sell are hazardous. Therefore in order for us to deliver the commercial outcomes that we are committed to and that our shareholders expect, we have to make sure we run safely and reliably. That means we don’t want to be blowing things up or damage the environment with our hazardous products. The first thing is it just makes a whole lot of business things.

Then secondly, I think in terms of the values of this company, I was very fortunate that I inherited a company that was 99 years old under the Shell ownership. Then we ever since brought the Z Energy branding to all of that. What we’ve done is we’ve been able to put together a set of values inside the company where we actually care about the stuff.

I like to strive that I care about it but actually all of the people who worked for us, they equally care about it because it matters to them. In terms of their own personal safety, given they work in hazardous operations in our business, but we have things like 60 million customers a year come across our ball court. If we didn’t have safety we’re putting at risk the 60 million people or the equivalent there obviously is the 4 million Kiwis who come and visit us all those times.

It’s very much a values thing and I think that when you connect safety at the level of values you’d probably get a lot of more opportunity available to you rather than if you just connect to it at a logical level or at a level of sort of commercial outcomes.

Tony:               Sure. I can tell that you are really passionate around safety. As a chief executive, how do you go about leading and driving safety throughout your organization?

Mike:              Yes. One of the phrases that we use inside our company around that is what we call “visible safety leadership.” There are different ways of doing that. You can have safety walk-abouts, you can go into your operational activities and be visible, you can equally pay attention to those people who do well. Often it’s probably more important to recognize the mini extras that are done to keep things safe rather than being on site investigating an incident when something goes wrong.

Tony:               That’s a really good point.

Mike:              Putting them into a positive is a really important part of that. Then a practice that I have is once a month I just drop an e-mail or a blog to everybody inside the team. It’s what I call my health and safety reflection. Whatever is on my mind at the time I just let them know what’s on my mind. Clearly I don’t randomly generate that. I think about what’s the theme that’s most appropriate for where the company is at right now or what I have recently experienced or where have I recently dropped the ball or felt I wasn’t doing so well. I would create my own thoughts.

I think it’s a combination of good assistance, target spearheading, paying attention to the procedures, being visible and equally I think being human. I’d like to think that people will hear me say from time to time, “I don’t know what the right answer is here. I don’t know what great safety leadership looks like for the city or a company like this. Can you tell me what you’d expect whether you’re a stake holder, an employee, a contractor or indeed a partner that we may have a more enduring relationship with?”

Tony:               How do you find people respond to the safety blog?

Mike:              Yeah. I get mixed messages on there actually. Sometimes you’re the boss and you’ve seen things out, balance can be interpreted in different ways. It either means people didn’t hear or they might go, “Oh. I don’t know how to respond to that.” I take a little bit of the silence possibly being a little bit of both of those.

Equally a number of people like to say each month, maybe five or 10 people would come back to me out of the 200 or maybe 300 people who receive the e-mail directly. They would either come back to me face to face or they would drop me an e-mail. Sometimes I get challenged which I really appreciate. People say, “Do you realize that’s not quite how it works,” or “Do you know how hard that would be for me to do that?”

Most of the time people come back and say, “Well I haven’t thought about that,” or “It’s really good to see that you brought that up.” When I talk about health and safety I do talk as much about health as I do about the safety, because in a business like ours where you mentioned we have 3,000 people who interact with us. The 300 of those sit in an office which is much less hazardous than working in a terminal where we store fuel or working on a service station or driving a truck.

I think it’s a combination of all those things that really matters. Visibility, I try to be committed in what I do. I encourage any safety leaders to do what’s best for them or what they feel most comfortable for around safety leadership but not shy away from being visible on things because you don’t want to go uncertain and not really know how it works.

I think it’s okay to go on uncertain, not know how the operations work and just engage with people. “Tell me about your job? What are the hazards that you face? Do you feel well-supported?”

Tony:               What turns your mind to putting this personal importance on safety? Was there a particular event in the past or was there an evolution or series of learnings and appreciation of the business been in fact, etcetera? What was it?

Mike:              It was a mixture of both actually. When you are in the industry like I was, I started in the mid-80s where safety was a focus, given the hazardous nature of the sector that I worked in, but it wasn’t necessarily systemic or as well-organized as it is today. I was on that evolution and I always like to think that for the company that I work for I was a good example of safety leadership.

For one time I worked in South Africa. I was responsible for a business unit of about 500 people where somebody died. It wasn’t sort of a workplace accident. It was one of our HR employees driving a company car on a public holiday on a road in Johannesburg with clear blue skies and she lost control of the vehicle and crashed. Because it was a company incident, our procedures required us to investigate the incident. It was awful to intrude upon the grief of her family which is a private matter given it happened during a public holiday to actually go and do the procedure.

Once I come to grips with that myself I can recall driving home a couple of weeks later and just thinking to myself and I often ask myself this question about safety. I say, “What did I do or not do that contributed directly or indirectly to Myra’s death?” I worded it deliberately that way because I thought, “Well, didn’t we have that debate properly whether do we put airbags in cars or whether we bought cars with AVRs in place?” This was a number of years ago.

When someone you work with dies even that was outside of work, it was a typical accident because most of the accidents that do take place in our industry are actually car accidents or traffic accidents rather than things blowing up. It was about a month later another colleague of mine, so not in my business unit, was killed in another car accident. His car was hit on a levelled train crossing in Zimbabwe.

When it just comes close to home and you think, “We followed the procedures, we do all of these things but people still died. What did I do or not do as a safety leader that contributed directly or indirectly to the outcome?”

That made it a lot more personal for me and I’d say up until then I probably had an attitude of compliance towards safety. Then after those thing I had an attitude of commitment. It’s a subtle difference in language but I think it’s quite a profound difference in terms of how you think and behave.

Tony:               Thanks for sharing that. The listeners out there hopefully will not have to go through this type of event. I’m wondering how they could learn from this without having to go through that because often everyone here, those sorts of incidents you read about them all the time. How do we get them to an emotional mindset and realise that that could actually affect their business?

Mike:              I think that’s a great question. Unfortunately there are lots of examples out there I think for people to relate to. You mentioned a few whatever level of leadership you have in your company you’d say, “If I haven’t been at my level of leadership at Pike River, what would I have done or not done that contributed directly or indirectly to what happened?”

I encourage all safety leaders to actually put themselves in whatever safety thing comes on TV whether it is something as tragic but simple as a car accident or a heavy load falling on someone in the workplace versus your largest scale tragedy like the Gulf of Mexico explosion or Pike River or in lieu of other incidents that happen. I think there’s enough in television.

I think if people just slow themselves down and put themselves on the shoes of the chief executive, the CFO, the operational manager, the safety leader or the foreman on site. If you really want to get committed to safety it doesn’t take you long to put yourself in the shoes of others.

Tony:               You mentioned before writing a blog or a newsletter of health and safety reflections. Sort of what you’re talking about recommending people do reflect taking a time out of the essential and reflect upon what’s going on and what’s happening in other areas and how they would affect you.

Mike:              Yeah.

Tony:               Talking about you’ve got a large number of contractors or suppliers, how do you drive an increase in safety performance in your supply chain?

Mike:              That’s a fantastic question and clearly it’s very topical right now sort of post-Pike River and with the workplace safety in New Zealand and all that stuff happening. We have a combination of things. I think if I spoke about the things that people would be more expecting to hear from me is we have a management system around health and safety. We expect the contractors who work for us to have the same.

They don’t have to have the same system as us but we need to have evidence that they actually have a system. If they worked for us say on the service station, they need to follow our permit-to-work process etcetera etcetera. There’s a whole bunch of systems and procedures that we require from our contractors.

Secondly, again I come back to that visible leadership piece wasting time with out contractors. For example our delivery of fuel through the trucks. We almost 100 trucks driving around New Zealand. They’re not actually owned by Z. They are owned by Hookers Pacific and we think of it as an outsourced operation.

Every 6 months I sit down with the truck drivers at Hookers Pacific and in Christchurch, Wellington, Dunedin and Auckland which covers almost all of the drivers. I just sit down and have a yawn. We just talk about safety stuff and they tell me things.

The first time I turn up they go like, “Here’s the new guy and he’s just showing off,” or whatever story they have because sometimes the boss would do things. The second time I go back and I go back every 6 months they go, “Oh. Maybe we should pay more attention to what he has to say.” Particularly when they tell me things and I go do something with it. When I come back for the third time, it was almost not quite like old mates catching up but there’s a relationship developing now and there’s a more openness for them to hear what I have to say, and equally for me to listen to what they have to say.

Again there is just two things. I think there are two ends of the spectrum here. There is both the systems and procedures that you would mandate or contract your contractors or partners to do for you but also you have to show that you care. My way of showing that I care about the drivers is you’re going to have a sausage roll with them and chew the fat over a bunch of stuff. I could tell you what, they give me more advice on what I need to be doing to improve customer satisfaction than meeting my own people.

Tony:               So there are benefits their for you too?

Mike:              Yeah, exactly but as I said if I make sure that I genuinely listen to what they had to say and I do something about it well then they’d be more trusting and open around raising talks under the issues around safety that they wouldn’t otherwise raise. I always make sure that there’s someone from their own Hookers Pacific management team that is in the conversation with me, so that we come across as being not just Z parachuting in. This is actually management both the contract provider manager as well as the contract receiver.

Tony:               We’re about to go through a major change in New Zealand health and safety with the new regulator, WorkSafe New Zealand about to come online in December. What are your thoughts on these changes? How are they going to affect your business or how should other people be thinking around these changes?

Mike:              Yeah. I think you got to be very careful when you are in business and regulations change. You got to be here just don’t relate to it like I’m being done to. Sometimes regulations can get in the way of running a good business if I could drop out that cliché.

What I and some of my colleagues worked very hard to do is to really understand why this is happening, what’s the content for it. If we really get connected to that then regulation or changing regulation can occur differently. We use the word context a lot in this as I’ve said. If you don’t have the context for something, what you’re being asked doesn’t always make sense.

We work pretty hard to understand the context. Then we work really hard in understanding what are we committed to here? Is it just meeting the minimum obligation or can this actually enrich what we’re doing? We are actually completing an exercise. We’re now going on a conversation on it tomorrow actually. We’ve done already some work to identify the gaps between our current H&S management systems and our strategies and our goals and our policies versus what we think is coming.

We think again by being productive on early on that it doesn’t feel like a club that comes along on particular day that you get beaten up by the regulator on. That’s the other aspect to it is I encourage people to be proactive so it doesn’t feel like you’re jumping, there’s a big stiff change between what you’re currently doing one day and then the new months there’s something else happening there.

Then I’d go back to that values perspective. I’d say within your company what really matters and how does this changing legislation, whether it be the requirements upon you as a director, as a chief executive, as a front-line safety leader, or just as a general employee? What about these matters to you? Because if you can’t find something in it that matters to you then I suggest you’re just going to come out of it again from a perspective of compliance.

Again we’re thinking quite carefully about in terms of the values inside Z or what matters to Z. “How does this helps us to get after what matters to us?” as opposed to, “Here are some more rubbish coming down the pipeline. It’s going to create costs inside the business.”

We are very, very connected to and actually the work we’ve done see there are some gaps. As much as we might have thought we have a reasonable safety record, we’ve got consistency, there are some gaps in the way we’re doing things and what is now likely to be expected under this legislation from the directors all the way down. We’ve already talked about it a couple of times in the board.

Tony:               There are probably business owners listening right now even potential chief executives who may not be completely sold on health and safety. People use many arguments from the moral, legal, or the increase in business productivity or a combination of those to convince people they need to be in health and safety. You’ve talked about those really but are there any other thoughts or arguments that you would like to put forward for people to embed health and safety into their business?

Mike:              Yeah. That’s a really great question. Actually I wouldn’t offer up any one answer. I just want to give a generic one where I would say you’ve got to find what works for you or what matters to you in such that you connect to it. For some people that might be actually and this is also my experience. If you run a really good safe operation it’s usually quite efficient which means it’s a lot of costs.

You can either come at it from the moral values perspective. I know ultimately if someone ever got died or died or physically hurt from something I’m responsible for, I’m going to face off to the family. That’s something that really gets me.

I think everyone has got to find a thing that gets them into the game or in other words what’s your game with playing around safety. It might be, “Well, if I get to be more safe we’ll be more efficient and we’ll make more money.” That’s a game worth playing for some people. For me my game was playing to make sure that when people leave Mike here during the day, they go home to their families at night in as good shape as they arrived.

I should also say by the way I don’t mind making money at running a safe operation either so it’s not one or the either, but again I think just really, really set a point what really gets you committed to safety and find the thing for yourself.

Tony:               Okay. Now is there anything else that you want to add or put in another way is there a question you wouldn’t want me to ask around health and safety?

Mike:              Yeah, there is actually and you could see of course I wasn’t this candid. I’ve got a document printed off in front of me and it’s written by a guy called James Reason who was sort of the person who first put up the concept of this swiss cheese model wherein all the slices wind up and you get yourself an accident. That was obviously written a number of years ago. He recently written about what he calls Safety Paradox or Safety Culture. Again I love paradoxes because that’s actually how the world works. It’s not as simple as if you do this, things will be safe.

He put down a couple of things here that I think if you hadn’t asked me what’s your safety record like, I would say, “It’s reasonably good.” You could have said to me, “Well, you should feel … you should feel good about that.” What James Reason points to is that, I’m going to quite from him. He said, “Safety is defined and measured more by its absence than by its presence. However so often in safety we concentrate on the things that we do wrong, lost time, injuries, first aid cases. So it’s the presence of those things rather than anything else.”

I think this whole notion of paradox is though when you say we are going after the zero harm workplace environment. Well we never get to zero. Now we want if we have our targets in the years ahead a good or a bad outcome.

What I say certainly to myself and to my team is that the number or the result is just a result. Let’s not get to whatever whether it’s good or bad but what are we going to do about it? I think it’s very easy in safety to treat it like any other performance metric and you tend to judge it. If it was three last year and it’s one this year you’ve done a great job. What I’d say actually one is clearly different to three but does that mean you actually got to safer or you actually risked life but you actually haven’t had the incidences to record.

Again it’s that whole notion of paradox. It’s never as straightforward as it seems. I think that’s where again I think safety leaders can get into trouble because they expect a good management system will make things better. New legislation would make it better. It’s going to be lots of different things and I worry as much about a month in which we have no safety incidents as I do about the months in which we do record something going wrong with safety.

Tony:               Great. Thank you and that’s actually a great place to finish in. What I’ll try and do is put a link to that article if we can get it online. But if people, the listeners do want to get hold of Mike or know more about Z Energy, they can do so through the website Thank you very much, Mike, for your thoughts.

[Link to pdf article here]

Mike:              Great, Tony, and thank you very much for the opportunity to share them.