Risk management
in a
changing
industry

If you regularly keep up with Venturn’s updates, you may know that we previously presented our Social Innovation Quiz during the most recent ZeelandMaritiem event at the end of 2019. Nellie Boer was crowned the big winner of the quiz. When we spoke to her afterwards, it quickly made sense why. She represents Goeree Lighthouse, a company that specialises in asset and risk management for a wide range of industries. Over the years, Nellie and Erik, the founder of the company, have run into many of the issues that social innovation addresses. We spoke to them about innovation, navigating today’s labour market, and change management on the work floor.

“Risk management is incredibly broad,” Erik explains. “Of course there’s always the technical risk management, the failure behaviour of ship parts for example.” The shipping industry and many other segments in logistics are dealing with decreasing margins, which have led to budget cuts in organisations. One aspect of Erik and Nellie’s work is to help organisations cut costs by calculating a technical optimum in maintenance. “We’re definitely moving towards more innovative models that use predictive maintenance. This helps companies to only do the things they have to do when it comes to maintenance and repair: performance-based. Not too much maintenance, definitely not too much, but definitely not too little either.”

“Risk management has everything to do with processes in your organisation, with the people in your organisation.”

Predictive maintenance, advanced data analytics, and other technical innovations are hot topics in the maritime and logistics industry. Take autonomous shipping, for example. “I believe that in the next 15, 20 years, crossing oceans autonomously is going to be a reality,” Erik continues. But making such innovations a reality requires more than just the technical puzzle pieces. These technological advances have a massive impact on the way the industry operates. As a result, the people in the industry have to  adjust the way they work. This makes successful change management strategies essential. “When you zoom in, you’ll find that risk management has everything to do with processes in your organisation, with the people in your organisation, with finance, with the whole environment of the company.”

Shifting parameters

Nellie remarks that, regardless of the changes forced onto employees by technological advancements, shifts that require change management have already taken place in industries like maritime, logistics, and energy. “When you approach a risk analysis, you already have to take into account that we’re dealing with a completely different workforce than 30 years ago. The supply of personnel has changed. Society as a whole has changed. That softer side has become crucial—organisations don’t have a choice. It is what it is. So you see different paths being taken than in the past.” Management roles are more complex and require different skills. Labour on the work floor is increasingly contract-based, which impacts to what extent an employee feels connected to the company. Any kind of maintenance plan needs to take those changes into consideration. Nellie continues: “The parameters within which we work have changed. They’ve just become so different. Because of that, the questions we get from our clients have changed. Risk analysis isn’t just about the technical aspects anymore, but about people.”

“Job security is gone—you can be brief about that, it’s just history.”

“It’s about the discussion on employment security versus job security,” Erik describes. Job security refers to the traditional way of working. You’re trained to do a certain job, and over the course of your career, you master all the skills required to fulfil that job. Employment security is much broader. It’s all about applying your experience and skills in new areas. People who are able to transfer their knowledge into a different environment might not have the same job forever, but they won’t find it hard to secure employment. “Job security is gone—you can be brief about that, it’s just history,” Erik states. “Employment security is much more important. Having a certain toolbox and knowing how to use it flexibly. You must be able to switch. And for some people, those that are very attached to their desk so to speak, that’s very hard.”

Threatening the ecosystem

“People will pick up the phone and be like, oh it’s those consultants again.”

The idea that risks and operations aren’t just about technical requirements is not always immediately embraced by everyone in an organisation. “Funny things happen when we come in,” Erik says. “People get a little uncomfortable. They see us as outsiders, as ‘those consultants’—I’ve been working for 20 years and that’s the first time I’ve heard that. People will pick up the phone and be like, oh it’s those consultants again. Especially with Nellie, since she doesn’t have a technical background, you notice that people start talking very vaguely… well, you might be better at explaining it.”

“Very abstract, yes,” Nellie continues. “It can be very threatening. That I, without any technical knowledge, suddenly waltz in and think I can start telling them how to do this and that…! And people will pretend that they are cooperating with you, but really, they’re just not.” This pocket veto requires a very careful approach to change management. It’s a natural reaction when people feel that the ‘ecosystem’ within their organisation is being threatened. When you are viewed as an outsider—in this example, as ‘those consultants’—members of a group can undermine the change process by inaction or by withholding important information. Nellie: “We’ve had cases where performance improvement simply wasn’t realised because of specific people in specific positions. It’s unfortunate when you’ve identified areas that a company could really improve in and they don’t do anything with that knowledge. But in the end, that responsibility lies with the organisation.”

Successful change management strategies require you to look not just at individual components of an organisation, but at the organisation in its entirety. When Goeree Lighthouse is approached by a client with a question, the first thing they do is zoom in. What’s behind that question? What is the structure of the organisation? Seemingly straight-forward project failures—going over budget, for example—can have their root cause all the way up at senior management and company strategy. It makes projects incredibly complex. “But that’s what makes this line of work so incredibly fun,” Nellie comments. “That challenge. It makes you approach each new project with a different mindset, at least for me.”

Organisational change

“If you want to go in a certain direction with your organisation,” Nellie remarks, “Regardless of what your goal is, you have to look at your staff as an asset. What kind of personalities do you see, what’s the group cohesion like? You calculate the probabilities and risks of this group of people. And then as a leader you start by asking yourself the question: am I going to be able to reach my goal with this group? Is their mindset correct? And if the mindset needs to be adjusted, how am I going to do that? Just like you have certain maintenance jobs when it comes to your technical capital, your people require upkeep as well.”

This upkeep can take different forms, like training sessions, coaching, or workshops. How these are implemented depends on the existing organisation. “Think of it like an S-curve,” Erik explains. “On one side of the curve, you have the pioneers, the people that are on board before you’re finished explaining where you want to go. On the other side, you have people that are chronically resistant to change. The biggest group is the one in between that you need to include in the change process.” The effort that is needed to realise successful change management depends on where people are located on that curve. One of the most important aspects of the change process is showing people what’s in it for them. What kind of positive impact is a specific change going to have on them as an individual? And, in a broader sense, how can the company continue to provide a fun and interesting working environment for an employee? That process of value creation for the employee is about more than salary. It’s about ensuring that your employees get a certain sense of fulfilment from the work they do.

“Practicing what you preach is what makes the difference between a difficult transition and one that radiates synergy.”

Change management isn’t just about getting employees to embrace new ways of working. Leadership requires the ability to take decisions and expressing which direction you expect your employees to go in. But it requires introspection as well. When situations go awry, leaders should start with reflecting on their own skills, mindset, attitude and behaviours and how they present themselves to their staff. Nellie: “Forcing a certain truth on employees while exhibiting the exact opposite of what you’re telling them won’t work. Practicing what you preach is what makes the difference between a difficult transition and one that radiates synergy.”

Rewriting definitions

So, successful change management seems to have two major components: effective leadership that sets the right example, and learning structures put in place to guide people through the change process. Now think about that S-curve again. What if, despite all effort, someone isn’t able to move ahead on that curve? Erik: “At that point, it’s important to be able to say: it’s been a great ride, and we’ll help you find something else, but this is where our paths as employer and employee diverge. Not just for the benefit of the company, but to protect that individual from having to drag themselves out of bed every morning and dreading every minute at work extra.”

According to Erik, “It’s inherent to the changing labour market that, as an employer, you look at things like turnover from a different point of view. And then you see that old definitions need to be rewritten.” Traditionally, employee turnover isn’t viewed in the most positive way. If someone leaves the company, it must mean something is wrong, or there was a conflict of sorts, right? But don’t confuse a split between an employer and employee with conflict. Someone might simply be at the end of their learning curve. Or they just aren’t able to adapt to the new work setting or organisational direction. In those cases, a ‘happy middle’ exists between firing someone or receiving a resignation letter: outplacement. Nellie clarifies: “In my experience, you see that those people already realise that they no longer fit in. If an employer is then able, in all maturity, to properly escort that person as they exit the company… It really makes a difference. If someone leaves with a positive mindset, even if they’re working elsewhere, you’ll never lose them as an ambassador for your company.”

Lessons learned

“Always think: what’s in it for me? What can I learn from something or someone?”

All things considered, those who want to make big changes can expect to be faced with great difficulties. So how can professionals, whether they are the decision-makers or the ones who get change thrust upon them, face the hardships of change management? “Be open to different perspectives,” is Erik’s first point of advice, one he has personal experience with. “I have to allow Nellie, who has a completely different background, to give her opinion on matters. Because I might know how things work in my field, but she has a track record with knowledge and experience of her own. And it’s exactly those differences that make us complementary partners.” Erik stresses the importance of having an open and positive approach, even when you feel threatened by the unfamiliar. “Always think: what’s in it for me? What can I learn from something or someone? If you look at the world through that lens, I really believe you’ll make huge progress as an individual and as an organisation.”

“Make time for reflection,” Nellie advises. “What am I doing right now? What is happening around me? Is it time to adjust, is there something that needs my attention? Share those reflections with your environment, take advantage of the learning capacity of your network.” Trends in work and society often have already passed by before you’ve had the chance to look into them. A flexible mindset is a crucial asset in navigating the fast-paced world we live in. She concludes: “To add what to Erik said, step out of your comfort zone. Ask yourself how you can learn something new by doing things differently than you are used to. Even if it’s something simple, train your brain to do it another way, because that will inevitably lead to new insights.”