Cultural Alignment for Contractors: A supply chain assessment

Recently, the oil and gas industry in particular, has seen a strain on the supply chain to keep rates low putting pressure on both sides to be more efficient and productive. But what if the organisational cultures of the supplier and buyer don’t match up properly? Can this be costly for both sides particularly when it comes to safety? In the Netherlands, this has been recognised by the national authorities introducing the Safety Culture Ladder concept as a standard assessing organisational cultures of the buyer and supplier and finding the gabs between the organisations so improvements can be made.

Today most industries are characterised by a complex web of interdependence, often involving lengthy supply chains. It is rare for large organisations in these industries to operate without the contributions of contracting companies in one form or another, and often these contributions require the presence of a contractor’s employees on site. Since company culture resides in the behaviours and attitudes of all individuals present and working on the company’s site(s), in this scenario there is an interface between the “host” culture and the “guest” culture; its consequences - for safety, productivity, efficiency - depend on the similarity or divergence between the two.

As might be expected, the “host” organisation assumes the greatest risk. In terms of legal responsibility, the owner of a site is liable for the safety of all those present, regardless of formal employment contracts. Even beyond safety issues, the site owner has a substantial stake in site activities, and the success of these projects depends in part on how well the “host” team and that of the contractor(s) cooperate.

Organisations today have to work hard to embed a strong safety culture throughout their workplaces. With a focus on cost-cutting and productivity still present from the oil price crash a few years ago, organisations who remain focused on their safety culture are showing extra effort, desire and care for people and the plant. Cultural maturity is synonymous with fewer incidents and injuries, higher productivity and efficiency, and healthier, happier employees. Investing in programmes that reinforce safe behaviours and company values are worthwhile, as a robust safety culture is resilient and less vulnerable to breaches.

Therefore, it is important that safety training and education extends to contract workers who influence performance, essentially functioning as employees on site and bringing their own cultural propensities to bear. But what if safety training is limited to internal workforce? And how do organisations know contractors fit into their safety culture before they come to site?

This is where cultural alignment comes into play. When two (or more) company cultures are aligned, projects are delivered without loss or harm to people, plant or productivity. Rather than relying on blind chance or a subjective feeling without an objective assessment to find an appropriate match, organisations can actively screen bidders during the tender process to increase the likelihood that their contractors operate according to values and safety principles similar to their own. Additionally, both parties benefit when areas of incompatibility are identified so that accommodations can be made, or steps can be taken to not only improve their alignment but also cultural maturity.

We recently worked with ConocoPhillips (COP UK) as part of its continued focus on safety; the company recognised the role of contractors in supporting a safe work environment. They turned to DEKRA for advice on customising a cultural alignment assessment aimed at narrowing a field of 5 bidders in a tender process down to 2. In close consultation with COP, DEKRA designed a tailor-made assessment comprised of interviews and surveys to determine the degree of cultural alignment between COP and its prospective contractors. Using the assessment results in tandem with other information gleaned from the tender process, COP was able to select two promising companies for the final round of bidding.

ConocoPhillips understood the difference cultural alignment could make in maintaining and reinforcing the progress it had achieved towards establishing a robust company culture. Finding suitable contractors who enrich rather than undermine efforts at embedding safe behaviours is a reasonable goal for any company wishing to preserve and sustain its cultural maturity and as part of any supply chain assessment. As noted, the benefits of alignment extend beyond creating a safe workplace, although this alone justifies the added energy and attention a cultural alignment assessment may require. Organisations also stand to gain in terms of productivity, quality and efficiency as well as learning more about themselves and their closest associates.

Carlene Smith, assessment & solutions consultant at DEKRA Organisational Reliability Ltd.

Carlene Smith, assessment & solutions consultant at DEKRA Organisational Reliability Ltd.