We have adopted this term, after doing some strategic planning and discussing with some of our advisors over the last few months. As part of this exercise, we studied parallels in human beings, where people (and companies) are looking far more holistically at what it means to be healthy. In many cases, this is leading to pushing the boundaries of what were once considered previous limits. For examples, young people setting new records, 80 year olds doing iron mans, and the fact that last year, the US Tennis association introduced a new classification for over 90’s! Many companies are on the forefront of this and the general term being adopted is a “Wellness Program”. Consider this from Wikipedia:
Wellness programs are being implemented across the country in large and small companies, and the results are positively impacting the bottom line. “Research is showing that it’s more cost-effective to invest in preventive health practices, such as screenings, immunizations, health risk appraisals, behavioral coaching, and health awareness/education, rather than spending resources exclusively on the small minority of employees/dependents who are responsible for high-cost health claims. A U.S. Department of Health and Human Services report revealed that at worksites with exercise programs as components of their wellness programs, healthcare costs decreased from 20 to 55%, short-term sick leave was lowered from 38 to 32%, and productivity increased from 50 to 52% Researchers from the Centers for Disease Control and Prevention who studied successful strategies to prevent cardiovascular disease estimated that over a two- to five-year period, companies with comprehensive workplace wellness programs and appropriate health plans in place can yield $3 to $6 for each dollar invested, all while reducing the likelihood of employee heart attacks and strokes. Also, a 2011 report by Health Fairs Direct which analyzed over 50 studies related to corporate and employee wellness, showed that the ROI on specific wellness related programs ranged between $1.17 to $6.04. In general, it is estimated that worksite health promotion programs result in a benefit-to-cost ratio of $3.48 in reduced health care costs and $5.82 in lower absenteeism costs per dollar invested, according to the Missouri Department of Health & Senior Services. Additionally, worksite health programs can improve productivity, increase employee satisfaction, demonstrate concern for employees, and improve morale in the workplace.
We think the parallels in the asset world are very strong, and language can send powerful messages of intent.
Our own experience is that a 3:1 ROI in 12-18 months from an Asset Wellness™ program is conservative.
Rio CEO Sam Walsh talks frequently about their ability to push the entire Pilbara Iron “system” beyond its nameplate capacity. We think “Asset Wellness™” sends a comprehensive and different message that what is currently being discussed in this space, and our early trials show it is easily understood by executives, as many of them have signed off on corporate wellness initiatives for employees for exactly the same reasons.
Perhaps its worth a try in your next initiative.