September 2015, Vol. 242, No. 9


Compression Report: Safety Emphasis Wins Exterran NSC Kudo

Jeff Share, Editor

In the oil and gas industry, there is not and never will be a priority higher than the safety of a company’s employees. Go to any industry conference and you’ll see how seriously the topic of safety is taken. It bears repeating: safety is job one.

Exterran, a Houston-based compression company, realizes that an effective safety program always starts from the top. Brad Childers, Exterran’s president and CEO, clearly understands that as does the National Safety Council (NSC) which earlier this year singled out Childers as one of just nine CEOs in the United States who do “get it.”

“It” in this case refers to recognition for being “dedicated to safety for the long haul and committed to continuous improvement for both their organizations and themselves,” according to Deborah Hersman, president and CEO of the NSC.

Childers’ efforts have not gone unnoticed by others. In June he received the EY Entrepreneur Of The Year® 2015 “Transformational CEO” Award for the Gulf Coast Area for demonstrating “excellence and extraordinary success in such areas as innovation, financial performance and personal commitment to their businesses and communities.” Leaders are nominated by external third parties, and Childers was selected by an independent panel of judges.

In this interview, justifiably proud Childers discusses safety in all of its essential components and how a successful program should work.

P&GJ: What was your reaction to being recognized by the National Safety Council?

Childers: I was honored to accept this award for Exterran employees because I know how high the NSC sets the bar for this award and how many companies were in the running. Our employees are the reason we earned this recognition. They are the ones who work safely every day, not just for Exterran, but for their families. And that’s what matters most.

P&GJ: How do you (or how have you) prioritize(d) safety among Exterran’s business responsibilities?

Childers: Our approach to prioritizing safety is straightforward. For us, safety is not one of a number of business priorities; it’s the most important job we do. We are first and foremost in the job of saving lives, saving limbs and saving families.

P&GJ: What does it take to create and then nourish a successful safety program? Must it always start at the top?

Childers: Setting boundaries and expectations at the top is required in order for everyone to clearly understand the vision and also the playing field to achieve that vision. Then, it’s important to take stock of the current state of affairs – the priorities of the management and employees; the routines used to run the business; and the impact of the operation of the total enterprise on safety.

Next, you have to build a plan that ensures everyone knows what they need to do to achieve the current focus. We use a planning process for safety that is built in and around our annual business planning process, so that the safety plan becomes part of what we measure, action and review on a regular basis throughout the year.

Then comes commitment which we demonstrate by sharing our plans publicly and measuring progress in frequent management routines. This keeps every level of management engaged with our current focus as we continue to strive toward our vision.

Finally, I believe you need courage. Courage is needed because so many things in our business can get in the way of our commitment to our core value of safety. We must have the courage to say no to those distractions. Similarly, there are some people who are naysayers or fence-sitters, and we all must have the courage to work to get them aligned or address the problem if we cannot.

P&GJ: How does Exterran communicate the need for total safety to its employees, especially those who work outside of the U.S.? Is it through team meetings, email, etc.?

Childers: Several years ago, we launched the “XFactor™” platform at Exterran. It’s a means for us to train and communicate about health, safety and environment (HSE) to all levels of our organization around the world.

“XFactor for Leaders” provides training and insights for managers mid-level and up so they are prepared to carry the message of HSE to their teams. “XFactor 24/7” provides tools and techniques for our frontline supervisors to lead, communicate and coach all of our employees on safety. “XFactor 3D” conveys key messages and expectations to employees who are engaged in the most challenging and risk-laden aspects of our business.

We also have an expectation that every meeting starts with an XFactor moment where someone shares a short message on safety. And our intranet frequently publishes features on our safety performance – stories of stopping a job because of a safety problem, a business unit’s success in working incident-free for a record period or customers recognizing Exterran for safety. All of this is intended to keep our vision and focus fresh and our value of safety alive and well.

Most recently, given progress in our performance, we’ve amped up our message in our quest to better save lives, limbs and families, our new goal: Goal Zero.

P&GJ: In an equipment and service company such as Exterran, what are some of the challenges that workers face in doing their jobs every day, both in the field and in the office?

Childers: Employees working with hydrocarbons face inherent hazards and risks each and every day. There are ways around it, but these are challenges we can help mitigate. First, it can be a challenge for some workers to overcome a former energy-industry culture that may linger from a time when safety wasn’t prioritized as it should have been.

Another challenge we face is the “graying” of the workforce and our ability to pass along the learnings of years of experience to those coming up in the industry. In periods of rapid ramp up, we must get our new employees quickly and effectively trained for their roles, as well as oriented to our safety culture.

Additionally, one of the industry’s biggest challenges has been and continues to be our work with rotating equipment. Throughout the energy industry, from exploration to production to transportation to refining, employees work with rotating equipment each and every day, in many cases all day long. Ensuring new people in the workforce understand and can address the hazards of rotating equipment is an absolute must. Likewise, we have to work hard with our experienced workforce to make sure they do not become complacent. Finally, the continued evolution of technology is something we will always have to deal, which, in essence, is about helping our organizations better deal with and embrace ongoing change, period.

P&GJ: Does a successful safety culture include helping employees improve their personal health? Does this also involve taking better care of the environment?

Childers: There’s no doubt that safety and employees’ personal health go hand in hand. We strive to address this by having solid benefits programs and we work hard to help our employees better understand and manage their personal health through tools and education. And of course we strive always to be good stewards of the environment. We have been involved with our industry and various agencies to strike that right balance of regulation that helps all of us achieve our goals of protecting the environment while sustaining successful businesses that provide jobs and create shareholder value.

P&GJ: When you became CEO of Exterran, did you see a need to improve its safety culture?

Childers: When I took the role of CEO in 2011, Exterran was well-prepared to make a step change. We had a good cultural foundation, HSE processes were moving forward globally and leaders were looking for the next steps.

P&GJ: What were some of the first steps you took, and how were they received by managers, field and office workers, and your board?

Childers: Using those insights, we focused most of our attention on culture change. We enhanced our XFactor platform, we improved our safety communications, we retrained leaders, we formalized our HSE management reviews, we put an incident-review process in place that went all the way to my desk, and we added leading indicators.

Then we purposely identified and began to formally and frequently recognize front-line leaders who were demonstrating, in often very tough conditions, the leadership and ownership of safety that was the essence of our core value of safety.

P&GJ: How do you quantify the results of your safety program?

Childers: When I’m in the field, meeting with employees in our manufacturing plants or service operations, they shake my hand and the first thing they want to talk about is the safety of their operation. That’s a powerful testament to safety being a core value for Exterran.

Our vision truly is becoming engrained in our culture, and leadership and personal ownership of HSE is taking hold. Tracking TRIR (Total Recordable Incident Rate) is important, but it’s a number; it’s a numerical expression of what we have done. At the end of the day, it’s that handshake, that look in the eye, that story of courage that quantifies who we are and our real values.

P&GJ: As many energy field jobs involve hazardous activities in often hazardous conditions, do you think companies are doing as much as they should to emphasize worker safety?

Childers: Our industry has made a lot of progress in the past 25 or so years to improve safety and environmental management throughout. But I don’t think any of us can or should be satisfied with our current performance until we reach a point where no one gets hurt. No injuries, no accidents, no incidents. We’ve rolled out a Goal Zero focus at Exterran this year to help drive us to the next level of safety excellence.

P&GJ: What advice do you have for other companies that are trying to improve their safety culture?

Childers: It has to start with culture. If you get your culture right, getting the other things to fall in place is much easier. Next would be to establish that clear vision, understand where your organization is relative to that vision and then find your focus – those few things you must do now to move you closer to your vision. Measure and stay on that focus until it is ingrained, then find a new focus that takes you another step closer to your vision.

Editor’s note: Exterran Holdings Inc., the parent company of Exterran Corp., last month announced plans to spin off its international services and global fabrication businesses. Exterran Corp. will be a stand-alone, publicly traded company focused on global business opportunities not limited to compression and will have 7,000 employees. Exterran Holdings will be renamed Archrock Inc. and will focus on the U.S. compression market with 2,500 employees. Both companies will be headquartered in Houston with Childers becoming president and CEO of Archrock.



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