Tyco International’s Centralized EH&S Audits
The regulatory and compliance difficulties that accompany a single merger are challenging enough. Now imagine the hurdles that arise when acquiring hundreds of companies in the course of just a few years.
Add in the regulatory scrutiny that comes in the wake of a massive accounting scandal, and you have the mess that Tyco faced a few years ago. Under former CEO, Tyco had adopted an aggressive acquisition strategy, buying more than 800 companies from 1999 to 2002. Years later, Tyco still had a hodgepodge of Environmental, Health & Safety programs and no room for error. To minimize risk, Tyco worked to centralize the EH&S program so it could have more control over its many far-flung units and subsidiaries.
A particularly tough challenge was shifting from a “holding company mentality to an operating company mentality,” says the director of EH&S management systems and transactions. “From a risk standpoint, having such a diverse set of businesses—healthcare, electronics, manufacturing services—all presented their own issues.”
For example, Tyco’s service and installation operations work at customer sites, where they don’t control the work environment, and the risks may be harder to manage. “Our EH&S risk control programs must be able to accommodate all of the different work environments whether they are controlled by us or not,” says the director of EH&S management systems.
The initiative to consolidate certain support functions began as far back as 2002. In addition to gutting the existing board of directors and leadership team, the CEO helped drive the company to become one operating company with one way of doing things.
This included creating a more centralized EH&S program. To achieve this, the CEO hired in addition to its director of EH&S management systems and transactions, its vice president of EH&S and its director of EH&S compliance assurance.
The team soon realized that Tyco needed a more efficient system for global EH&S management. Working with spreadsheets and different pieces of varied software programs was no longer efficient.
Tyco therefore turned to a software provider to help it take internally developed management system tools, audit processes, checklist protocols, and scorecards and incorporate them into one software solution. “You need tools and you need to be consistent”. “If you’re not measuring it, nobody is paying attention to it.” The provider selected is a QEHS performance and compliance management tool from Enablon, which Tyco is using to consolidate its global operations.
Achieving Uniform Self-Assessments
With the company-wide roll out of Enablon nearly complete, Tyco is now turning its attention to the self-assessment process. “It is probably the biggest hurdle for us,” says the director of EH&S management systems and transactions.
In the past, Tyco didn’t have a unified plan to implement the self-assessment program across the business units. “It was left up to the businesses to manage”. “We were more focused on the compliance aspect and getting that under control.” The quality of self-assessments was inconsistent, he adds; some businesses did it very well— monitoring, measuring, and scoring them—where others weren’t doing much of anything.
Using the Enablon platform helps Tyco to analyze results across different regions and businesses. In addition, scheduling, managing, and reviewing self-assessments used to be done off-line; no longer. “Now we’re able to do it online”. “Everybody has insight into when audits are happening, as well as what the results are.”
In addition, the platform has allowed Tyco to create a customized common hierarchy for its systems. This enables the business units anywhere in the world to map any audit protocol or checklist of regulatory content to a standard hierarchy if, for instance, a lockout/tag-out procedure needs to be entered into the system or an environmental permitting issue arises. “That gives consistency and visibility into specific risk areas”.
“We’ve also developed a very specific and well-documented compliance assurance process,” he says. This includes how Tyco does things from the scheduling of the audit all the way through the follow-up and the corrective actions that are being taken.