Case Study: Fonterra - building a community of people
The Accord Fonterra case study focuses on improving health and safety outcomes at construction sites.
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Background
Following two construction site fatalities in 2009, Fonterra wanted to understand how it could avoid future incidents. The dairy co-operative decided to fundamentally change the culture at its worksites – over the following ten years Fonterra developed a robust, yet innovative, approach to site culture, worker welfare and project efficiency. These changes not only made Fonterra’s employees and contractors safer and healthier, but also made its projects more successful.
For more detail on Fonterra's approach and advice on how to do the same for your business, read the how-to guide.
Project overview
Project goal: To deliver more successful projects by improving employee welfare, and health and safety on construction projects.
Statistics:
- Project Manuka is a $100m plant upgrade and building maintenance project
- Investment in "Community of People" was 0.5% ($500,000) of the construction capital cost
- Maximum of 250-300 people engaged onsite
- Project outcomes included a 93% decrease in injuries and lost time incidents over the last 10 years on Fonterra's major construction projects
- The plant experienced a successful start-up upon reopening, with all products in specification for the first product run – delivering substantial business benefit.
Applies to: Projects over $30m if applied directly; other learnings can be applied more broadly.
Accord goals:
- Increased productivity
- Improved health, safety and wellbeing performance.
Accord outcomes:
- Consistent, reliable and timely project delivery
- High performance culture
- Workforce capacity and capability
- A collaborative industry
- An environment that supports thriving mental health and wellbeing.
Project stage: Project Manuka is nearing completion – implementation of the Community of People approach on subsequent projects will be monitored by the Beacons team.
Beacon monitoring process:
- The Accord Beacons team will monitor Fonterra's progress in subsequent projects, with a particular focus on productivity metrics
- Community of practice established to share lessons learnt with interested clients and contractors.
Fonterra case study video
Video Transcript
How Fonterra improved health and safety outcomes
To find out the cause of health and safety incidents on its sites, Fonterra embedded a researcher with different working crews in 2009. The researcher observed staff taking risks and cutting corners. Fonterra discovered that its leadership decisions were having a direct impact on site safety. To improve health and safety at its worksites, the dairy company needed to create an environment that was both physically and psychologically safe – central to this was changing the culture at its construction sites.
Trial and error approach
Although construction typically requires a linear way of thinking, Fonterra discovered that cultural change requires a trial and error approach. For this method to work, Fonterra needed to become an environment where people feel safe to talk about what's not working. Its leaders listened and learned from their staff to understand their needs and what approaches might work on subsequent projects.
The theory: Creating a 'generative' culture
Improving site culture is based on the theory that:
- 25% of a project's success is driven by the effectiveness of the design
- 25% of a project's success is driven by the effectiveness of systems and processes
- 50% of a project's success is driven by the effectiveness of the project's culture.
At the outset, Fonterra developed a cultural model to help track its progress to transformational change. The model measures project culture as below:
- Generative: positive behaviour and safe culture is reinforced by all staff
- Proactive: senior leaders look to actively address culture issues
- Calculative: rules and compliance procedures are put in place to minimise risk
- Reactive: measures are taken to address issues as they arise
- Pathological: little care or effort is taken to address issues.
Project Manuka: A Community of People
After working with its staff, Fonterra launched its Community of People programme at the Project Manuka site for a 0.5% investment ($500,000) – covered as part of the client programme management costs of its $100m site upgrade to two Hawera milk processing plants.
The project includes:
- A daily joint meeting involving all trades to review the day's activities, risks, dependencies and opportunities for collaborative working
- Providing meal options on site to encourage shared lunches and increase cross-trade communication
- Specialist health services onsite, including a nurse providing regular health checks and workplace support services to assist with mental health or other employee issues (e.g. specialists providing support for family or financial issues)
- Onsite training opportunities, including specialist supervisor training on conflict resolution and communication
- Reinforcing cultural values around the site (e.g. Project Manuka branding and information) and promoting rewards and recognitions (e.g. free lunch to reinforce positive or exemplary behaviour)
- The introduction of simple measures, including regular cleaning of site toilets, to make staff feel more valued.
Outcomes and benefits
While this approach was developed with improved health and safety in mind, Fonterra achieved better project outcomes as a by-product of improving its culture. By focusing on worker wellbeing, and creating an environment where employees from different trades can meet and socialise, the team became more collaborative and efficient.
"Health and Safety was promoted by Fonterra by turning it into a Trojan horse for improving productivity through better planning and collaboration." - Juergen Link, General Manager Assets and Capital Projects.
This transformational change has benefitted clients, contractors, and employees in the following ways:
Clients
Based on feedback from local contractors, the level of engagement and satisfaction of construction workers at a Fonterra project in Australia caused a competitor to have to offer a $10-15 per/hour increase to tempt workers to join them. As the competitor was unwilling to pay that premium across the board, it experienced delays in initiating their capital works.
Since launching its approach in 2009, Fonterra has experienced a 93% decrease in injuries and incidents on its major construction sites, which would have previously resulted in lost time on projects. Toolbox meetings, involving detailed planning between different trades, has allowed Fonterra to move from a slower, sequential method of working, to a faster and more dynamic approach.
Contractors
Main contractors on Fonterra sites now encourage clients on other projects to adopt similar approaches. Contractors have developed positive relationships with Fonterra and see the benefits of the training their supervisors and front-line staff have received.
"Project Manuka's Community of People Programme made it possible for the team to work through the incredible stressors of a pandemic. Resources had been implemented to support the mental health and wellbeing of the staff, which gave the team the tools and motivation to continue during even the most stressful times and conditions." - Craig Waghorn, Apollo Projects Director and Chief Executive.
"Obvious benefits are the project outcomes are better, more successful and more consistent. Of course we still have usual challenges, but we collaborate better, solve complex problems, work across boundaries, we are more respectful of each other, it has enabled us to develop better ecosystems for our projects, pushed us into new ways of thinking and made it easier for us to listen to each other." - Andrew Grafas, Tetra Pak Processing Key Account Manager.
"[It] creates a way for different people from different trades, backgrounds, religion, countries, and beliefs to care for one another. To understand one another." - Nathan Rumball, Apollo Projects Site Manager.
"Enabled me to build stronger relationships, focus on the wellbeing of our teams and achieve project goals while enjoying the journey." - Henri Viljoen, Tetra Pak Project Manager.
Employees
As a result of the many benefits available to staff – including improvements to their health, social and cultural wellbeing – workers are incentivised to work harder and ensure they remain on the project. One scaffolding supervisor told the Accord Beacons team that the work site, "is like Disneyland". He said his team works harder and takes more pride in their work because they enjoy where they're working.
"Everyone working here from different companies and trades…it's like a family." - A. Smith, Dialog Fitzroy Scaffold Supervisor.
"We work together, no more tunnel vision within trades. We are one people." - Jade Rongonui, Fonterra Leak Mitigation Manager.
"Absolutely without a doubt, the village/family environment is a big success in creating culture change, attitudes towards health and safety and that management do actually care." - Mike Longstaff, Fonterra Health and Safety Coordinator.
Learn how to implement a similar programme in your business by reading our how-to guide.