Making change count
Saab’s Nico Berx explains why managing change is essential for successful port innovation projects
Ports and terminals, both very traditional sectors, have shown little innovation over the last decades. Sure, new technologies have been developed and implemented, but it takes a lot of time before they are widely adopted. Is this because the port industry is afraid of change? Perhaps, but before I discuss change management as a challenge or as a process, let’s look at the basis for that change: innovation.
Most people think innovation equals technology. Market leaders providing technology are indeed classified as bigtime innovators. Boston Consulting Group’s yearly list of the most innovative companies includes Apple, Microsoft and Google in top spots. Airbnb, Uber, Visa, Southwest Airlines and American Express also take key positions in the list, yet none of these produce state-of-the-art technology. They make smart use of data, technology, systems, equipment and rely on competent, committed staff to go the extra mile for their customers, keeping a close eye on profitability, sustainability and continuity. They innovate and see innovation as a continuous process and recipe for success.
However, when it comes to innovation in ports, terminal operators and shipping lines do not rank highly; here, the biggest innovation took place over 60 years ago when Malcom McLean introduced the container.
Innovation has mainly to do with how we do business with our customers, and how companies create value for their customers and themselves. Motives for innovation are often economical and sometimes, innovation is the only way to survive. Think of Netflix. Its only way to survive was to radically change its business model and move away from physical movie rentals. Who still has a DVD player at home?
Some innovation drivers are external: rules, regulations, environmental pressure and so on. These can also be brought back to economical drivers. Green shipping and ports are demanded by cargo owners, who demand that shipping is sustainable. Lines and ports that do not comply could lose business.
Done well, innovation generally lowers costs, and increases quality and customer service making companies resilient, sustainable and ready to face the competition.
Regardless of the drivers, innovation always implies change. That change may not be drastic; innovation can be incremental, allowing change to be implemented step-by-step. Incremental change is easier to plan, implement and oversee and is more easily “digested” and supported by staff, customers and business partners.
Buy-in from people is crucial when it comes to change. Efficient, productive and effective ports and terminals need well trained, skilled and motivated management and staff. While real estate, storage areas, equipment, connections are important, human resources still come first, even in automated terminals.
Adapted integrated tools and technology – such as port management information systems (PMIS) or terminal operating systems (TOS) – do nothing by themselves. People need to be trained to use them to the full extent of their capabilities. Training staff is extremely important to motivate them and make any change process a success. Competent leaders encourage, motivate and mentor their staff on the journey of change.
There can be some tell-tale signs of resistance to change in staff, such as: staff checking out, contradicting, or starting polemics; persistent rumours, intrigue or restlessness; avoidance or debate; or inattention and absenteeism.
When staff display these “symptoms”, big alarm bells should sound and port and terminal management needs to react immediately. As resistance to change is often based on fear of the unknown, economic factors (loss of jobs), change of habits, loss of comfort and secure feeling, and/or an inability to manage information, management can take steps to address concern.
Quite often the implementation of new port or terminal IT system is considered an IT project. However, such a project, and any other innovation for that matter, affects the entire port or terminal. In the interest of successful change management, it should therefore not be seen as an IT project, but instead as an operational and management project. Of course, the IT department will play an important role in supporting the implementation, especially the technical part.
But it should be remembered that implementing a PMIS or TOS has everything to do with customer services, processes and optimisation of processes and these projects contain a huge change management component. Often, operational staff have been doing processes and activities for 10, 20, maybe 30 years without really questioning these processes and procedures. Suddenly, they will need to adapt to new, optimised processes so get them involved very early in the process to get their buy-in as soon as possible.
In some cases, IT systems will be changed to meet existing procedures, but in many cases, it is more advisable to modify some long-standing processes than to adapt the years of worldwide best practices which are incorporated in the system.
Having an implementation team with extensive and practical/operational experience that have gone through similar processes in the past is key to making these projects a success. Terminals and ports implement new systems only once every 15 or 20 years or even less frequent. One can hardly expect the terminal and port staff to have previous experience of managing such projects. Ideally, your supplier is the one with experience in the software development and implementation, as well as sufficient knowledge of your business. That is the only guarantee that they can maintain the highest quality possible.
Indeed, PMIS or TOS functionality is only one part of the evaluation and selection process. At least as important, or perhaps even more so, are cultural fit; actual and proven experience of the sales, project management, implementation, development and support team; the training approach, the go-live assistance; and the ongoing support. The experience of the supplier’s implementation team will allow them to guide and assist the terminal management and its staff in each step of change, preventing any risk. And if there is a hiccup, the same team will help in containing the consequences and mitigating the effects.
Leading by example
To keep staff motivated, capable leaders show vision, determination, lead by example and communicate clearly about what is to be expected during and after the change management process. Good leaders allocate sufficient time, money and resources to achieve targets and objectives and are realistic when planning the strategy. They are committed and motivate staff at all levels, provide ample training, coach and mentor, are open, honest and methodical.
According to the University of Antwerp’s Dr Christa Sys, the success rate in implementing innovation in ports and shipping is around 85% and is a mix of technological, administrative, organisational and cultural nature.
There is still a lot of room for innovation and change in the maritime industry. The first step in detecting opportunities for optimisation is to listen carefully to customers, mapping their needs and requirements. For too long ports have operated as islands and customers have had limited choice.
But ports can innovate by integrating themselves in the logistics flow, by becoming open and transparent when exchanging information, by taking sustainability and corporate social responsibility initiatives, and by implementing UN sustainable development goals. Innovation does not always require big investments, high-end technology or extensive and complicated changes. Instead, innovation and change management needs to fit in the development status, the social climate, and the actual needs and means of ports and terminals.
One final note: it is better to start small than not to start at all. Opportunities can often be found by simply looking at things in a different way. The worst enemy of innovation and change management is indifference, immobility, blindly complying with rules and regulations and self-constraining thoughts.
Here’s a simple example of innovation that any port or terminal can do. Students I taught in India came up with the suggestion of regular cleaning of the port or the terminal. Before then, no-one had thought to undertake this simple task, yet first impressions count and if a potential client visiting a port is unimpressed by the cleanliness of the facilities, securing the business might be that much harder. Was it difficult to implement? Not really, although management did take a little convincing. Has it contributed to the business? Yes, a lot; a small investment can generate a lot of leverage.
In conclusion, change management is not to be feared. It needs careful planning, due identification of risks, and plans for their prevention and mitigation. Those risks should never be feared; they simply need to managed in the same way that change does.
Nico Berx is director, marketing and sales, ports and terminals at Saab.
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