Effective loss control calls for a total approach that combines many parts of the organization. It is impossible to get consistently good results unless a complete and holistic approach is undertaken. This morning my objectives are for you to:

  • Understand the importance of developing a comprehensive loss control strategy

  • Review the critical components and measurements of your safety and loss control plans

  • Leave with suggestions and tactics available to you in developing your system

What are your measurements of a successful loss control system? Fatalities? Motor vehicle accidents per million miles? Lost time injuries? Recordable injuries? Experience Modification Rate? First aid? Property damage?

While all of these are quite effective measures and important to track, they are lagging indicators and will not predict where the next loss will occur.

First let's set the stage with a little background in Safety Management Systems and a look at where we are today.


Students of safety are all familiar with H.W. Heinrich, commonly referred to as, the "Father of modern safety." Many of his concepts form the basis of what we believe today. Just a few of his contributions include:

  • The Iceberg Theory in 1925 - a.k.a. "Incidental Cost to Employers" or "5:1 Ratio"

  • "Origins of Accidents" theory based on 75,000 accidents (88/10/2); and

  • The Pyramid (1/29/300 hierarchy) based on his study of 50,000 accidents.

The so-called "Heinrich's Pyramid" suggests that for every serious incident there is an increasing number of underlying minor incidents, which are further underlain by even more near misses or unsafe behaviors. While the numbers may vary from industry to industry, the fundamental concept holds true.

The measure of effective loss control programs, however, is often taken at the top of the pyramid. Many senior managers focus on outcomes - those visible incidents - that are easy to measure. Trying to formulate an effective loss control strategy from these events misses the mark. This concept is often referred to as "driving while using the rear-view mirror." You have a pretty clear picture of where you have been, but absolutely no idea where you are going!

Heinrich sets the stage for us by introducing the concept that there may be some underlying issues (hazardous conditions, at-risk behaviors, near misses, etc) that we should explore. Perhaps if we work to eliminate some of these underlying causes we can begin to make a better system.

As we explore these underlying events and conditions we must also consider the possibility of multiple causes. Along comes Frank Bird, another pioneer of safety management. While it was not specifically Bird who invented the concept of multiple causes, he certainly played a key role in promoting the concept. Bird also advances the notion that in addition to the immediate causes, there are likely some underlying local and system causes (failures of our management system).

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