The Weekly Reflektion 07/2023

The senior management often turns to external consultants to help them make changes that will achieve the company objectives. Sometimes these changes are forced upon the company due to external factors, for example a fall in the oil price. Sometimes the changes required are essential for the continuation of operation. However, without a guiding hand the external consultant may suggest measures that later are regretted.  

Do you always believe what the external consultants tell you?

A wet dock or impounded dock is a system where the waterlevel is secured either by dock gates or by a lock, thus allowing ships to remain afloat at low tide in places with high tidal ranges. The level of water in the dock is maintained despite the rising and falling of the tide. This can be important for cargo transfers, construction work or other activities that take place 24/7.

A shipyard in Norway constructed a wet dock to be able to offer services for the construction and modification of marine vessels and drilling rigs. This was a successful business until the downturn in the industry driven by a low oil price and a recession in the shipping industry. The manager of the yard decided that it was important to retain key personnel in order to be prepared for an upturn. The retained people were ordered to timewrite against the wet dock maintenance and inspection. The downturn was also a concern for the senior management in the company that owned the yard, and they hired external consultants to review the business including the operating costs. The external consultants had an extensive database of operating costs for similar companies and were able to benchmark these. One of the areas where the company benchmarked poorly was the operation and maintenance of wet docks. This was seen as a liability for the company and the advice from the external consultants was to sell the wet dock at this particular yard. The senior management welcomed the approach and initiated a sales process. A local competitor eventually bought the wet dock and were ideally positioned for the upturn in activities that occurred the following year. 

In our Reflektions we have often advocated the importance of ‘outside eyes’. Sometimes a company cannot see the wood for the trees and needs experienced people from outside the organisation to facilitate changes. These changes may be required due to challenges in safety, operating costs, profitability etc, etc. In the main the changes are normally related to how to get the organisation working more efficiently. We recognize the value of external consultants, after all we fall within this category ourselves. The challenge often arises when the external consultants operate remotely from the organisation and follow a standard approach without recognition of the special circumstances and unique history of the company and the organisation involved. They fit the organisation to the model and then judge the organisation against this model, including the application of standardised benchmarking tools. This approach is expedient since understanding how an organisation actually works is time consuming and doesn’t always fit the 24/7, quick turnaround approach many external consultants employ. The senior management does not always have the patience to wait for a full understanding of the issues and wants ‘quick wins’ and rapid response to demonstrate progress. There have been many ‘wet docks’ sold as a result of poorly managed change processes where external consultants have been given a ‘free hand’.