“Why Safety and Sustainability – The Role of Operational Excellence” By Dr Grahaeme Henderson OBE
Thank you for inviting me to be here with you today and as always, it is wonderful to be in Athens at the very heart of the global shipping industry. No better place for today’s Operational Excellence in Shipping Forum, which is the most important Conference in the world shipping calendar this year.
So why do I say that this is the most important Conference in shipping this year? The reason is that every company regardless of its size and shipping sector, should put operational excellence and particularly safety, as their very top agenda item. In a sentence, operational excellence is not something you do, but everything that you do.
Shipping is vital to the world. In all weathers, shipping keeps the economy moving from tankers to cruise liners, from ferries to cargo and container ships, some 100,000 ships with over 10 billion tonnes of cargo sail from port to port every year. That is more than one tonne of cargo for every person on the planet delivering 80% of the food we eat, the energy we use and the things we buy every day.
As a result, you all play a staggeringly important role in the world with huge responsibilities. But, as we all know, it comes with immense challenges.
Supply chains have been shortened with just in time delivery. There are increasingly large amounts of data and real-time analysis, with information moving quickly around the world.
Consumers and customers are very well informed and have a large choice of who they can buy from.
Employees have increasingly different expectations of their livelihood, and have choices about what work they do and who they work for.
Shareholders and lenders are being scrutinised by regulators and the market, to prove they are acting and investing responsibly.
It is important to be well positioned to take advantage of the opportunities and not to be left behind. But how do you do this…the answer is through operational excellence.
To demonstrate the importance of operational excellence, let us look at the shipping world from three perspectives…namely change, investment and decarbonisation. All are interlinked, but let’s consider them separately.
Firstly, the perspective of change. As we look back, it is almost unbelievable how the world around us has changed so dramatically. That change is moving at a scary pace that doesn’t seem to show signs of slowing down. Add to this, the massive changes that have taken place through the pandemic. How can you build the resilience to face the future with confidence, and be ready to take on any change and at short notice?
The second perspective is investment and for this, let’s consider ESG or Environmental, Social and Governance, which is a hot topic. Whilst there are critics and concerns around ESG, there is no doubt that the various elements will have a major impact on business and commercial success, with greater transparency. Companies need to be ready.
Each stakeholder uses ESG to look at your business through their own lens. Are you acting responsibly in looking after the environment? How do you treat your employees and what do you contribute to the communities that you operate in? How do you conduct yourself, and do you act responsibly and ethically? These questions and many more, to determine that your company is a good investment for the future?
The third perspective is decarbonisation. It is vital to address the impact of your business on climate change, including Green House Gas emissions. What are the opportunities now and, in the future, for improved energy efficiency across all areas of the operation? How might regulatory developments, such as carbon pricing, impact your business?
Safety is fundamental to delivering decarbonisation. Whilst the debate continues about which fuel to use and how to pay for the additional costs, the most important challenge is around the operational aspects and in particular, the safety implications.
The answer to all of these questions on change, investment and decarbonisation…and more, is through operational excellence.
Operational excellence must be a key component of every shipping company’s business strategy and owned by the Board. It needs to be communicated and understood by the employees, so that they are empowered to make continuous improvements and help to build your company for future prosperity.
Shipping companies have the opportunity to re-establish themselves favourably and be ready to navigate changes in the future.
In all areas of your operational activities, you must evaluate if the processes are efficient and embrace the use of digital technologies and data, to better understand the business and areas for improvement.
Company employees need to have clearly defined roles and responsibilities, and there needs to be open and honest communications, with all stakeholders.
It is important to care for your people and put them at the centre of all improvement programmes. People need to be trained for the tasks, with continuous learning for personal and professional development.
This is just a small list and I am sure you will have many more areas of operational excellence that you could add. So, how do you lead the way for real change and actually make things happen, beyond headline grabbing news items, and discussions…and even more discussions?
How do we turn these discussions into delivery, and ambitions into actions? How do you move from plans, processes and promises, into an improved performance to make your business thrive and propel it forwards? How do you make operational excellence actually happen?
The answer is through safety…by making safety the number one agenda item in your company. This is because safety is all encompassing and fundamental to everything that we do. The mindset and skills that are needed to deliver a great safety performance are the same for all other aspects of operational excellence.
The traits of a great safety leader are the same as for a great business leader. Both require leaders who have the vision to develop and deploy an effective strategy, and take accountability to deliver results. Leaders that have empathy, and can empower and inspire employees. Leaders that ask questions and listen, and value the contribution from others.
Put simply, a great safety performance results in a great business performance. If you get the safety right, you get everything right.
Through safety, you will be able to build an energised workforce. Safety will motivate your people to do a great job every day.
By making safety the single most important subject, your company will change and thrive, and become a force for good in the world.
So how do you deliver a great safety performance and gain the other benefits too? For this, we can look to work that is moving with great progress and much pace, called Together in Safety.
Together in Safety is unique in the shipping industry. It was established to address the significant issue of the poor safety performance, that has a devastating impact on seafarers, and their families and children, and results in significant negative consequences on the business.
Together in Safety has been established with the entire shipping industry working together as one united team. This includes ship owners and operators, and the very many support groups from P&I insurance companies to classification societies, and service providers. From the very largest to the very smallest, as everyone has an important role to play.
Together in Safety is non-regulatory and we are not asking for new Government policies, but instead to resolve the issues ourselves with collective action. It is also free to join and the programmes are free to use by everyone.
Together in Safety uses a Framework of Strategic Drivers that equally applies to all areas of sustainability and will deliver operational excellence. These Strategic Drivers are Leadership, Incident Prevention, Wellbeing and Care, and Collaboration.
Firstly, the importance of Leadership. Visible leadership must stem from the top down, with the right behaviours and mindset modelled by the Owner, the CEO and the Leadership Team. Actively leading the programme and reviewing progress, and taking corrective action where required. Visiting people on the front line and listening to them. Showing them how important safety is to you.
The second area is Incident Prevention, about knowing your major exposure areas, and where you are vulnerable and need to improve. Together in Safety is focused on preventing major safety incidents, where people are killed and injured, there is high-cost asset damage and major pollution events. Our detailed analysis has found that they are always the same types of incidents, such as collisions, groundings, fires, lost containers, and mooring operations. Let’s be clear, these are not accidents, but instead, repeatable events that could and should have been avoided.
The third area is the Wellbeing and Care for your people. Our employees are the new customer of the future; they must be well cared for as individuals. It is important in today’s business to make everybody feel valued. If you look after your people well and listen to them, then they will respond positively. They will be motivated to do a great job for you and help build a strong reputation for your company.
The final area is Collaboration where companies are working together in areas of common interest to the benefit of the industry, an example being the safety aspects of future fuels.
Together in Safety has been established by the shipping industry, for the shipping industry. It is the model of how to collaborate in shipping as one group with a shared vision, working to resolve our own challenges and taking real action.
Through Leadership, Incident Prevention, Wellbeing and Care, you will have the ingredients to deliver a resilient business set to thrive in the new reality. You will understand your strengths and weaknesses, where the opportunities are and how to benefit from them.
Focussing on safety will empower your people, build trust and unify them to make the required improvements. It will develop the know how to learn from others, to generate fresh ideas and deliver practical solutions.
Safety and sustainability are the future of shipping, in attracting new high-quality talent and breaking down barriers.
Safety and sustainability are your licence to operate.
That is why this is the most important Conference in the shipping calendar this year.
Operational excellence is not something you do, but everything you do.