Navigating the Perfect Storm

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Navigating the Perfect Storm

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A conversation between Windward CEO Ami Daniel and Guy Mason, Global Head of Shipping, BP. 


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COVID-19 has transformed the global community. For the oil and shipping industry, it created the Perfect Storm – challenging not only the commercial environment and the way people work, but also the way the work itself is performed. This is especially true for safety-related work which is always the top-priority, forcing the business leaders to think differently about communication, collaboration, and community. 

Ami Daniel asked Guy Mason to share his leadership insights, especially today, as the oil and shipping industries must quickly adapt in order to keep trade safe and efficient.

Below are our top five takeaways:

1. Be Data-Driven and Digitally Enabled

Now is the time to prioritize the progress of digitization and shift business operations to more data-driven and digitally-enabled models. As ‘normal’ processes are shifting, now is an opportune time to review and implement new digital processes which will allow to be faster, execute anywhere, be reliant on a fewer number of people – ultimately delivering better objective outcomes.

2. Leave Room For Innovation

It is tempting to stop all innovation processes in times like these, to save cash and to release key staff to focus exclusively on their critical roles. But some innovation processes have to remain a priority – those that have to do with digitization of the business, and specifically those addressing new challenges and barriers that are emerging.  

3. Experience Over Process

Relying on processes that have been tried and tested through time is highly-effective. Once processes can’t be completed as a whole, this requires people to bring their experience into play, to think more broadly about what the inherent risks are, and what proxies could give the organization the same level of assurance needed. 

4. Seek New Collaborations

We are reminded in times like these that every industry is part of a bigger ecosystem, with critical dependencies – and even greater shared responsibilities. That’s why working closely with the different pieces of the industry, even with players we wouldn’t regularly do, is key to think together and coordinate efforts to find collaborative solutions that ultimately will benefit all stakeholders. For maritime, more than anything it’s about safety and seafarer welfare, trying to find a systematic solution for crews that will keep ports open to deal with some of the unintended consequences of trade restrictions.

5. Nurture a Culture of Care

Corporations are run by people, and this is the time to remember that. Focus on doing the right thing, volunteering, donating, supporting local communities that need it most. The companies themselves can lead by example through their own actions. It is also key to encourage and facilitate for employees to take an active part. One final point is to remember that this shouldn’t just be in times of crisis, but something which should be part of any organization’s DNA.

Want more than our top takeaways? Read an edited version of the full conversation transcript below

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Full Transcript (edited)

Ami Daniel:  Hi Guy, good afternoon. How are you today?

Guy Mason: I’m great, thanks. Locked away in isolation in my house. But I’m rather surprised about how we can manage our business in this remote way.

Ami Daniel:  Guy, can you introduce yourself? 

Guy Mason:  Sure.  I’m Guy Mason and I am the Global Head of Shipping in BP. I run the shipping team which has accountability for the safe and efficient movement of BP’s cargoes around the world. 

Ami Daniel: Well that’s great. Guy, we’ve known each other for a couple of years now,  and what I  enjoy is that every meeting with you starts with 20 minutes about leadership and learning. So this is why I’m really excited to have you here today. This is an extraordinary time in history, between peak virus and very low prices for oil, that’s seemingly the perfect storm. How does that look from your eyes, running one of the biggest fleets in the world and moving the most amount of oil in the world?

Guy Mason: It’s an incredibly challenging time, and I’ve heard lots of people talk about it being unprecedented, and that’s often a phrase which people use in a throwaway way, but certainly in my 33 years now in BP, having been through a number of these cycles and actually interestingly having been living through the SARS pandemic when I was in China, all of this does feel unprecedented to me. On the one hand, we’ve got incredibly low oil prices which, for an energy company like BP, is a huge challenge, and we’re having to manage our way through that in a way where we’re all at home remotely. And yet, at the same time, it’s slightly different in the shipping industry, particularly the tanker industry, because we’ve got almost record high freight rates as everybody wants to have a ship at the moment. Global oversupply of oil and gas means that people are looking for places to put their production, and actually we just received our results for the first quarter, and as I read those, I noted that the volatility in the VLCC market and the earnings that we received for the VLCCs and that move BP’s cargoes have been between $25,000 a day and $300,000 a day, all in one quarter.

So it’s a challenging time, and yet a time where actually there’s a lot of really interesting stuff that’s happening with a lot of things that have historically been very difficult. Lots of big boundaries in the past disappeared overnight. Because the challenge of chasing the market opportunity for us and finding our way through this is so big, it’s been fascinating to watch the teams actually come together, and although we’re not coming together physically, coming together and working in a more collaborative way even though we’re all isolated in our own little rooms at home. That’s been really interesting to watch.

Ami Daniel: You and your team have been big advocates of maritime safety, and the use of technology and analytics for that purpose. Back in the day, you were one of the pioneers for creating technology around vetting. But now with COVID-19, I hear that it’s a bit more challenging to have safety inspections. How are you assuring the level of safety and security for your teams and your ships while it’s hard to do basic things like board a vessel? How are you approaching these challenges now?

Guy Mason:  Well, to be honest, Ami, it is incredibly challenging and it does occupy the significant majority of my mind, my waking hours, occasionally my sleeping hours, but that’s not the intent. In my waking hours, I’m thinking about how we can keep our cargos safe as the first thing, and secondly, how we can do it efficiently. It is true to say that historically, the way that we do that is by inspecting vessels, ports, and terminals on a routine basis – the industry does it that way – and some of that has not been possible because of the restrictions on flights and movements across the world at the moment. So one of the interesting things in the way that we’ve had to operate is around innovation. COVID-19 burned an innovation desire or an innovation approach at the same time as needing to identify what the barriers are, and those barriers are dissolving and moving away. So there are different ways of achieving the same result. I’m not sure that those different ways would be sustainable in a very long period but for the short period, you can look at proxies and alternatives to a physical inspection and assure yourself that there’s an equivalent safety requirement there. I think one of the interesting things that this whole experience has brought upon us is in many ways, is that it forces incredibly experienced people that we have throughout our organization to use their experience as opposed to relying on processes that have been tried and tested through time. And so we’re now requiring people who make these decisions not to say ‘I’ve completed the process and therefore it’s alright,’ but to think more broadly about what the inherent risks are, and what proxies there may be in place that would give us the assurance that we need in order to continue.

 

Ami Daniel:  Interesting. In the theories of how teams are being built, basically there are three major phases.  Storming, forming, and performing. As the CEO of Windward, and speaking to other business leaders, it seems that we’re past the storming part, and we’re probably in the forming and performing part. What have you learned, and I’m sure you’ve learned a lot, about the grit of your team, the cultural strengths? you spoke about innovation, about doing things differently, what can our audience take away from this experience in your eyes? Let us walk three minutes in your shoes for a second as a leader.

Guy Mason: That’s a great question. I think at the heart of it, it brings in the role of the corporate into sharp focus here. And we’ve seen more in this experience than I’ve seen in my time – I think in my entire working career. So what do I mean by coming into sharp focus?  It’s not only about shareholder value. Of course, shareholder value is incredibly important, but particularly where you have a big corporation like ours that generally has good access to resources, the societal obligation has to be to do all that we can to support society get through this and use our resources appropriately while also making sure that the company gets through this. Our CEO said there’s no God-given right for us to get through this. We have to intervene and make wise decisions, but given the strength of the asset base and the strength of the company, we probably have a better chance than the many companies in getting through this. 

The culture of care of the company and individuals have really shown through in times like this. It’s about doing the right thing. I work with somebody who is now volunteering for the National Health Service two days a week, we’ve got people who’ve been donating their time and making their own donations, we’ve got our canteen in Sunbury which obviously doesn’t have anything to do at the moment, but they are cooking 7,000 food parcels every day for local people. We’ve made donations for personal protective equipment, and we’ve got a chairman and a CEO who donated 20% of their salary for the rest of the year. So the whole culture of care is really showing through as perhaps the predominant feature, and it’s amazing what people have done in order to help people in their local community, and to help the world more generally get through this period of difficulty.

Ami Daniel:  Interesting, because I’m not sure that the first thing that would come to mind to a lot of the people listening to this is that a hugely successful global corporation is based on care, and I think it’s a great insight. You spoke before about innovation, who are you looking up to? Are there other industries’ best practices, people, that we or our audience can learn from? Collaborations that are out of the box, or people who are really leading in an inspiring way that you see.

Guy Mason: Yes, so in the innovation world and collaboration space it’s interesting. Let me start with innovation; I think, and I wouldn’t have imagined it, but this period of sitting at home for hours on end staring at the screen talking to your team and never meeting them would stimulate innovation but it absolutely has in my mind. It’s amazing what can be achieved when you’re pushed into these circumstances and the size of the enemy, if we can call it that, is so big that everybody coalesces around that and works together. It might be that we’ve only really made baby steps, but certainly, this has opened the door to many things that would be almost impossible in a former world.

In terms of our processes, I think it really makes me very thoughtful about the need for us to be more data-driven, more digitally-enabled. If you think about some of the well-established, perhaps long-running processes in the shipping industry, many of them are maybe old-fashioned in their nature, pencil-based or spreadsheet-based, and dependent on a wise person ultimately saying yes or no at the end. The ability for us to move that into a more data-driven, objective way will allow us to be faster, it may enable us to execute anywhere, and it’ll allow us to be reliant on fewer number of people, and I’m also convinced it will deliver better objective outcomes. So, I think, when you’re forced into a situation where you have to work digitally and remotely, it does make you think really deeply about those processes and I’m sure there’s a lot more that we can do in that space.

It’s sort of interesting just as a throwaway and also does bring into question the role of the office. What is the role of an office when you can work in this way and actually be quite effective? In fact, in some ways be more effective than in the office because there’s something about this technology that we’re sharing today which brings discipline. Discipline to start meetings on time, you can’t have a whole day as much as I know you and admire you, Ami, I can’t spend a whole day staring at you and so the meetings have to be shorter. There has to be more discipline. More discipline in the meeting, the technology only allows one person to speak at a time, when you’re sat around a table with a big team of people, it’s quite easy for three or four conversations, it just doesn’t work on this technology. And there’s something about the coffee machine chat which is sometimes helpful, but actually, in the absence of coffee machine chat, individual employees are left to make up their own minds.

Ami Daniel: I love that. I’ve seen that as well on our side- meetings are on time, nobody is late at this point, and everybody comes prepared and are much more focused on what they’re saying so, I think it’s a learning experience overall for everybody. 

Can we talk about the crews for a second? I think a lot has been discussed about the fact that there are some issues in replacing crews, and there are human beings who are staying at sea for extended periods of time. What’s your perspective about that? I assume it creates operational challenges, but also people welfare challenges, maybe maintenance challenges.  What’s your approach on this?

Guy Mason: Yeah, it’s at its heart. It’s a human problem and it comes back to the care point of view. I feel deeply for our seafarers who are effectively isolated on their vessels currently and we’re unable to affect crew changes. We are monitoring that really carefully and if we were to chat about collaboration, it is the area in which we’ve been working closely with lots of different pieces of the industry. So with other shippers, this isn’t a competitive matter it’s a safety matter, so we’ve been trying to work through thinking together with other shippers how we can affect a safe change of crews. We’ve been working with governments to try and keep ports open to deal with some of the unintended consequences of trade restrictions. 

Just as an aside, I don’t know if you picked this up, but Europe implemented an export control license around the export of Personal Protective Equipment [PPE] in the middle of all this. They didn’t want people to export PPE, of course, but if you’re in the shipping industry then you’re exporting this stuff all the time. And so we had to work quite hard with the government bodies and the European Commission and so on to ensure that actually there was a carve-out that would allow us to export, “technically export” because our ships will leave the area. And then you know all the industry bodies whether the UK Chamber of Shipping here in London, whether it be the MPA in Singapore, whether it be the International Chamber of Shipping, the IMO, trying to get that international collection of bodies that oversee our shipping industry in order to find a solution to make these crude changes. It is a key priority and it’s probably one of the top half a dozen things I’m spending time on is to try and find a breakthrough that will allow us to change our crew so that they can get home to be with their loved ones. There isn’t a systematic solution by finding the odd way to do it here and now, here and there, but it’s a very difficult and live and current problem and one that’s a concern for us.

Ami Daniel:  And one that could be a concern going forward, because the forecasting and scientific analysis says that COVID-19 is here to stay at least for the next 12 months. With these peaks and maybe another outburst towards the winter or next year, I guess it’s something that we probably need to solve systematically.

Guy Mason:  Yeah and there are proposals just on, there are proposals on the table for these international bodies to work together to identify perhaps a dozen ports across the world, where you specifically set them up for crew changes. You make sure that the air bridge is open so there are flights coming in and out of that, and you put in place the extra controls that you might need, perhaps testing once there’s reliable testing that’s available, combined with some period of isolation as folks embark on cruises, on vessels to start their trip link. So that’s the kind of thing that’s being talked about amongst these international bodies that would be a fantastic solution if we can pull it off. I suspect it’ll take a little while for us to, for us collectively in the industry to make that a systematic solution.

Ami Daniel: It’s a start. So just to wrap up, I think people talk about digital transformation for a while, which for me is kind of a blanket term for data science, AI, risk modeling, analytics, and you just said it maybe the COVID-19 situation in the world is forcing, or accelerating, some of the innovation that we’re seeing.  How do you as somebody who runs one of the biggest fleets and one of the biggest oil companies in the world’s shipping department, how do you see this, and how do you prioritize? How do you use this as not just a threat but an opportunity in communicating with your team?

Guy Mason:  Yeah and I think it might be a bit early to have any new insights on that, but as I think you know, we are working in this space actively. We have a program that is in place where we’re trying to quite fundamentally change the way that we think about our processes. The only thing that has come up so far, as we look through this lower price period which of course is a very challenging period for us and we’re needing to save every dollar that we can, the choices that we’ve made have not included completely stopping this kind of digital work. So we’ve prioritized the progress of the digitization of our business in a world where many things are being stopped, not only to save cash in the short term but also in order to release some key staff so that we can focus exclusively on their supply chain critical roles, those that are directly touching, and impacting, and affecting the safe movement of cargoes. So I think it’s a question of prioritization in the short term but I’m convinced that this experience will drive us on to ever deeper levels of trying to digitize our business because, you know, it’s easier operate a business which is objectively digitized in a way like this environment that we’re in today. If you can do it in a digital way and without having to get people together, then that has to be good for all seasons in my view, so more to come on that, Ami. 

Ami Daniel: Absolutely, Guy Mason, Global Head of Shipping BP, thank you very much for these insights, and I look forward to chatting again. Keep safe.  

Guy Mason: As ever, I enjoy the conversations with you Ami, thank you for taking the time with me today.

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