DNV challenges shipping executives on competence

Still in the grip of an economic downturn, the shipping industry is struggling to manage the gap between shrinking budgets and the costs of maintaining quality safety and environmental performance through competence. But according to DNV, the issue is widely misunderstood.

Total’s Group Head of Shipping, Luc Gillet, indicated to the press early in 2009 that Total will pay special attention to its relationships with owners in the current period of economic downturn. “In the context of this economic crisis, you must be able to find owners who offer quality service, quality maintenance and experienced crews,” he said. “We must be more vigilant than in previous years.”

Magnar Eide, Project Manager for DNV’s SeaSkill™, a unit in DNV devoted to maritime competence and training, says: “Ship owners should consider carefully the long and short term impact of these reductions not only on safety and environmental performance, but their business,” he says. “Our analysis of this issue over many years suggests that competence is strategically vital to achieving business objectives.”

Over the past two years, DNV SeaSkill™ has focused on these issues and developed services to help companies manage these challenges by identifying cost effective solutions to turn competence development into sound business policy. However, Eide says that many companies continue to struggle to bridge the gap between senior executives and competence development personnel, who may have different views on the role and cost of skills programs. “Senior shipping executives probably realize that competence vital to attracting and retaining experienced seafarers in a tough market,” he says. “But few consider the enterprise risk of underfunded competence development programmes.”

In an effort to clarify the issue, DNV has prepared the following Open Letter to senior shipping executives.

Dear CEO;

You probably realize that competence is an issue to attract and retain experienced seafarers to man your ships in a tough market. You may have already mobilized the HR /Training Manager to develop a comprehensive recruitment and competence program, or perhaps you’ve asked your HSE personnel to manage STCW issues. Either way, you probably acknowledge the risk companies’ face when a lack of competence, caused by bad performance, makes the evening news.

We know now that nearly 80 per cent of accidents and incident at sea are caused by human error and like many CEOs, you probably acknowledge that your company has room to improve. However, you may also be aware that competence personnel and top decision-makers may not share the same views on the impact of competence and training on the business. To help clarify the issue, we have prepared a list of issues related to competence which have a real impact on the success of your business.

What every maritime CEO should know about competence

  1. Competence does not equal training: To view competence only as an issue related to training is to miss the point. Competence is a strategic resource which is as important as finance. Ensuring that competence is nurtured and allowed to develop enables companies to deal with the good times, the bad times, diversification and changing strategic goals.
  2. Protect and manage competencies: Human error accounts for over 80 percent of accidents and incidents at sea. The cost of such accidents and incidents can have dire and unpredictable strategic implications for a company. Identifying critical operational competences are the necessary pre-requisites to minimising damaging financial outcomes.
  3. Bring competence into the business model of your company: Make sure your organisation values and supports learning. If there is a culture with little sharing of knowledge, little involvement from senior staff in the promotion of learning, or if the organization is operates in “silos”, no amount of investment can ensure a strong learning culture.
  4. Know the cost of ignoring competence: Many of the incidents and accidents in recent years can be attributed to short-sighted leadership decisions to reduce costs related to competence development and training. CEOs must consider the risk to the bottom line against short term cost reductions. The loss of brand equity is a huge risk posed by lax competence and training practices, one which many CEOs need to address. A company’s brand is the bedrock upon which most major enterprises build their business. When that bedrock cracks, many businesses have a hard time recovering.
  5. E-learning is here to stay: Shipping companies increasingly operate as borderless entities. As a result, it is imperative for company leadership to realize that a business operating without the advantages of E-learning is at a comparative disadvantage to those that embrace this new technology. If E-learning becomes a part of a company’s strategic planning, it can have a direct impact on competiveness, employee retention, recruitment and lowering costs. Avoiding this transformation can place organisational readiness at risk. Learn what it can do for you.
  6. The competence role of the CEO: It is clear that CEOs need to provide leadership by challenging the organisation to understand risks and requirements, so that the organisation can review and refine its approach to competence issues. Is the organisation on track with competence initiatives? Has it experienced any incidents lately? How can we differentiate ourselves from the competition? These are the types of questions that the CEO must ask HR and others in order to keep the company message relevant. Competence personnel must not only report to the CEO, but be engaged in an open dialogue.
  7. Increasing technological complexity in shipping demands higher levels of competence: To be able to access new business opportunities such as Arctic voyaging, offshore energy production and cope with increasingly strict regulatory environmental requirements, shipping companies must develop competence beyond compliance requirements. The initiative to raise competence to the levels required needs to come from the enterprise as part of the strategic business plan.
  8. Changing attitudes from compliance-driven mindset to a business centric mindset is vital: The maritime sector has a long history of training been driven by the regulatory demands for minimum safe levels of competence. This instils a reactive approach to training that is driven by prescriptive models such as the IMO model courses and traditional classroom training. Beyond compliance might well be a good slogan to place competence as a change agent in the organisation and harness new ways to learn. Social networking and virtual competence driven methods can be applicable. Exploit them.

Source: Det Norske Veritas

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