Tactise blog
Growth vs. Resilience: How to Find the Balance and Build Safer Operations
Industrial accidents don’t just damage equipment or disrupt operations — they can undermine a company’s financial stability, reputation, and long-term viability. Every major incident reinforces one simple truth: cutting corners on safety — whether in training, maintenance, or system upgrades — always comes back at a higher cost.
Globally, companies have made noticeable progress in workplace safety. According to the International Labour Organization (ILO), fatal occupational injuries have declined over the past decade in many regions. Yet the challenge persists: industrial incidents still claim an estimated 2.3 million lives each year, and businesses incur nearly $3 trillion in annual losses due to accidents, downtime, and health impacts.
At the same time, many organizations face a new paradox: rapid growth ambitions often outpace their ability to scale safety systems. A global McKinsey study shows that companies expanding production by more than 15% per year are twice as likely to face severe HSE incidents — primarily because investment flows shift toward new capacity rather than maintaining existing assets.
So how do leaders avoid this trap and create a genuinely resilient production environment?
At the same time, many organizations face a new paradox: rapid growth ambitions often outpace their ability to scale safety systems. A global McKinsey study shows that companies expanding production by more than 15% per year are twice as likely to face severe HSE incidents — primarily because investment flows shift toward new capacity rather than maintaining existing assets.
So how do leaders avoid this trap and create a genuinely resilient production environment?
A Perfect Storm for Failure
Across industries worldwide, the root causes of incidents tend to look the same. Whether it’s manufacturing, energy, logistics, or heavy industry, organizations often struggle with:
1. Communication breakdowns across hierarchy
In many companies, information flows smoothly downward — but rarely upward. Operators and frontline teams, who see risks first, may lack the authority or psychological safety to raise concerns. Research from the National Safety Council shows that 40% of workers hesitate to report unsafe conditions due to fear of blame or inaction.
2. Deferred maintenance disguised as “cost optimization”
Major production facilities have high tolerance for deterioration — systems can operate “on the edge” for years. This creates the illusion that cost-cutting works. Yet accidents caused by aging assets remain one of the top incident drivers worldwide. In fact, mechanical integrity failures account for up to 30% of major industrial events (IChemE).
3. Leadership distance from operational risk
Executives often assume that safety risks are fully visible at the top. In reality, many leadership teams see only fragments. Research consistently shows that senior leaders underestimate the number of high-severity risks in their organizations by up to 70%.
The result is a dangerous cycle: frontline teams adapt to working with degraded equipment, middle managers suppress “bad news,” and executives feel confident everything is under control — until the system breaks.
1. Communication breakdowns across hierarchy
In many companies, information flows smoothly downward — but rarely upward. Operators and frontline teams, who see risks first, may lack the authority or psychological safety to raise concerns. Research from the National Safety Council shows that 40% of workers hesitate to report unsafe conditions due to fear of blame or inaction.
2. Deferred maintenance disguised as “cost optimization”
Major production facilities have high tolerance for deterioration — systems can operate “on the edge” for years. This creates the illusion that cost-cutting works. Yet accidents caused by aging assets remain one of the top incident drivers worldwide. In fact, mechanical integrity failures account for up to 30% of major industrial events (IChemE).
3. Leadership distance from operational risk
Executives often assume that safety risks are fully visible at the top. In reality, many leadership teams see only fragments. Research consistently shows that senior leaders underestimate the number of high-severity risks in their organizations by up to 70%.
The result is a dangerous cycle: frontline teams adapt to working with degraded equipment, middle managers suppress “bad news,” and executives feel confident everything is under control — until the system breaks.
“Red” Risks: The Missing Link in Many Organizations
No complex operation runs without deviations. The question is how companies classify and manage them.
In mature safety cultures, risks are categorized by severity — “red,” “orange,” and “green.”
Red risks are those that could lead to a fatality, catastrophic asset damage, or major environmental harm. They require immediate attention from the highest decision-making level.
However, many companies lack:
This gap is one of the most common failure points we see globally.
In mature safety cultures, risks are categorized by severity — “red,” “orange,” and “green.”
Red risks are those that could lead to a fatality, catastrophic asset damage, or major environmental harm. They require immediate attention from the highest decision-making level.
However, many companies lack:
- a clear owner for red risks,
- a structured escalation process,
- and a protected budget for eliminating them.
This gap is one of the most common failure points we see globally.
Why red risks must be handled by the CEO
Only the first executive level has the full situational perspective and authority to act without delay. In high-reliability industries (aviation, oil & gas, nuclear), CEOs personally oversee the most critical risks — this is an established international practice.
But taking ownership requires accepting three realities:
2. Red risks never disappear completely.
As improvements are made, issues previously considered “orange” may now count as “red.”
3. Managing red risks is not an add-on — it is the core leadership responsibility.
It cannot be delegated to middle management.
But taking ownership requires accepting three realities:
- You will initially discover far more red risks than expected.
2. Red risks never disappear completely.
As improvements are made, issues previously considered “orange” may now count as “red.”
3. Managing red risks is not an add-on — it is the core leadership responsibility.
It cannot be delegated to middle management.
The Role of a Protected Safety Investment Budget
A risk-based approach only works when safety has a non-negotiable, ring-fenced budget. Without it, organizations inevitably postpone maintenance, inspections, or component replacements — all in favor of growth initiatives.
Companies with protected HSE investment streams demonstrate:
This is the foundation of operational resilience.
When leaders consistently eliminate red risks, maintain asset integrity, and ensure open upward communication, companies become not just safer — but more stable, more profitable, and more trusted by partners, regulators, investors, and employees.
Companies with protected HSE investment streams demonstrate:
- up to 50% fewer severe incidents,
- greater operational uptime,
- and higher long-term ROI (DuPont Sustainable Solutions data).
This is the foundation of operational resilience.
When leaders consistently eliminate red risks, maintain asset integrity, and ensure open upward communication, companies become not just safer — but more stable, more profitable, and more trusted by partners, regulators, investors, and employees.
- Founder & CEO, Tactise International
HSE and Operational Risk Expert
Learn more about Dmitry and Tactise