Sometimes a disaster serves as a catalyst. After such an event, an organization will implement procedures that raise awareness of the consequences that can follow from even the simplest actions. For the nation's largest corporation, such a disaster occurred in 1989 when the Exxon Valdez ran aground on a reef in Prince William's Sound.

Read related: “BP Oil Spill: The Bigger Picture.”

As anyone born before 1970 will recall, this environmental disaster was catastrophic. More than 200,000 barrels of oil spilled into the water, resulting in widespread damage to a pristine, unspoiled ecosystem. The fact that the vessel's captain had been drinking and left the bridge proved to be a public relations disaster. Although the captain was in clear violation of company policy, ExxonMobil suffered a significant setback in the court of public opinion.

While ExxonMobil took vigorous action to repair the environment and its reputation through lengthy clean-up efforts, reparations and image management, it also instituted a set of internal controls to guard against similar occurrences in the future. Although management could not physically audit the actions of each employee working across the company's international footprint, it could put into place what we in our agency call “a culture of preparedness.”

Because ExxonMobil initiated a culture shift, change was widespread and deep-rooted throughout the organization. If management had responded to the disaster by simply publishing a handbook or policy guidelines, personnel would have addressed only the issues outlined in the guide. Change would have been specific and limited rather than generalized and widespread. Instead, as recently reported in a New Yorker magazine article, positive change was affected in even the most basic ways:

• At company headquarters, employees backed their cars into parking spaces in order to see clearly as they pulled away during a potential emergency.
• A written reprimand might result from simple acts that could have hazardous consequences. Potentially hazardous acts included failing to turn off a coffee burner and not wiping up after a spill.
• Departments organized safety meetings and competitions. In some instances, prizes were awarded to clerks who made sure file drawers were closed. During these safety meetings, employees might share stories of near misses or catastrophes that had been narrowly averted. It was as if these were safety consciousness awareness sessions.

The culture shift was so pervasive, it even spread to employees' personal lives. Along with addressing what could potentially happen in the workplace, group safety meetings might also cover the proper use of a ladder when cleaning gutters. After all, an employee who is injured in a household accident will be unable to show up for work.

Read related: “Risk Management Critical to Deepwater Safety.”

Although it came at great cost to the environment, the corporation's reputation and revenue, the Valdez oil spill motivated ExxonMobil management to create and promulgate a culture of preparedness throughout all levels of the organization. While no dollar sign has been assigned to the economic and human savings that have been realized, they are certain to be significant.

Of particular interest is ExxonMobil's decision to go beyond relying on the obvious response of publishing manuals and guidelines. Benefits would have been limited to the particular subjects that were addressed there. Maybe because the disaster was so overwhelming, management chose a course of action that would overwhelm the horrible reality that disaster could strike at any time, in any place and in any number of different ways. ExxonMobil opted for a culture shift rather than a policy shift, and so sent a message of safety and preparedness through all channels of the firm's operating structure. In the vernacular of our culture, when change was required, “they didn't mail it in.” They did the work.

Any other organization—from mom-and-pop retail stores to construction companies to software companies—can learn from this example by creating and promulgating its own culture of preparedness. Claims will be reduced. Lawsuits will be reduced. Lost man-hours will be reduced. Human misery will be reduced.

By communicating this important message to our clients, we who make a living in the property-casualty insurance business may perform our greatest service: fewer claims submissions, potentially lower premiums and a safer more productive organization.

By helping our clients instill a culture of preparedness, we will serve our own interests, underwriters' interests, our clients' interests, and perhaps most importantly, the families of the men and women who work for our clients.