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October 2, 2014

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Does shipping really need a Steve Jobs?

Martin Stopford is right. Or at least, when he said recently that shipping needs a Steve Jobs, perhaps what he really meant is that the industry needs to stop behaving like the late Apple boss’s one time nemesis; Microsoft.

 

Stopford made his widely reported remarks in the house magazine of propulsion specialist ABB and it is to companies like this that he appeared to be directing his message. Shipping’s equipment manufacturers, along with its designers, builders, operators and users need to ‘think different’ to quote Apple’s purposely illiterate advertising slogan.

“I don’t know who in the maritime business has the capability, the budget and the resources to put that sort of thing together. What shipping needs is a Steve Jobs,” he said. The late Apple CEO was a good example of how understanding the market, adapting technology and ‘sticking with an idea’ can transform a company.

Looked at in a little more detail, what Dr Stopford – perhaps the industry’s leading market analyst, author of the seminal Maritime Economics and all round pundit of choice – actually said, was that there is a need not for innovation itself but for a generation of middle and senior managers that understand enough about technology to deliver real change in corporate behaviour.

As he pointed out, the perception that shipping is old fashioned is so deep seated that it has become a fait accompli – a truth universally acknowledged – but one to which no-one can agree how to respond.

Shipbuilding is even worse, since yards have until very recently, had no incentive to do anything much new and as a result “have been building roughly the same ship since 1985”. The evidence of this technological stagnation is “there in the numbers. The fuel efficiency of the ships, the basic design features have not changed much.”

That is beginning to change – economics and perhaps some climate-derived pressure has seen to that. And in fact as Dr Stopford acknowledges, there is plenty of innovation around: in navigation, propulsion, cargo-handling and communications sectors.

The trouble is that when these come into contact with the shipping industry, the differences in approach, the lack of new thinking about new ways of working exposes the dearth of technical knowledge currently resident in shipping companies.

It’s in this sense that shipping needs to be less of a behemoth and more of a leader. It’s a truism that small companies, usually with none of the baggage he describes, can spring up and nimbly suggest that people look at things in a completely new way.

The problem is that the large, often global and fairly traditional companies that make up the shipping industry respond like, well, a large multinational; they do what is possible, what is achievable, rather than what is truly ground-breaking. The business risk or at least its perception is too great to make any big leaps without having a pretty good idea of what will happen next and who gets sacked if it fails.

In some ways it’s unfair to blame Microsoft for continuing to pump out versions of software that is so ubiquitous and by and large works well. But it’s worth remembering that when it has tried to innovate – to make an Apple-like leap – the results have often been mixed to say the least.

In fact the same problem – of becoming part of the business establishment – is impacting Apple now as it seeks to solve the problems of its latest iPhone launch, software glitches and security issues.

And there is another lesson too. Apple will have to show the same kind of innovation that Jobs demonstrated in the coming decade to continue selling hardware, software and services to new markets, having enthralled the developed world with the social and business power of its products.

Shipping’s need is just as urgent. Pessimists claim the industry is facing the rest of the decade at least bumping along the bottom of a phantom recovery, in which too much investment money chases too few profitable opportunities.

Perhaps we are fortunate then, that Dr Stopford reckons it could take “at least 10 years to breed a new generation of middle and senior management in shipping who really understand how to put all the pieces together.” They need to be at both senior board and middle management level.

It is true that shipping has not even begun to test the limits of technology innovation and how it might be applied to the problems it faces: compliance, training, competence, positioning, tracking, safety, security. But if there is an App for profitability then that is the one that needs to be developed first.

Dr Stopford’s call is an engaging one, especially given his long experience in what we might call ‘old shipping’. At heart he is arguing that technical competence needs to be re-instilled into shipping companies led by forward-thinking management.

And keeping with the smartphone simile, he said that those who can’t or won’t re-engineer themselves are doomed to be “locked into history and go the way of Research in Motion and Nokia.”

But there is something of a religious undertone too, suggesting perhaps that Dr Stopford understands that this is also a leap of faith – a leap few shipping companies have been prepared to make until now.

“After 50 years of global free trade, the shipping industry is looking towards an era where it needs to pick up its bed and walk. It needs to do something different,” he said. “Just carrying on building slightly bigger ships with each generation, and otherwise roughly doing what you did before, is running out of steam.”

And in fact he reckons that shipping’s stakeholders don’t even have to be Steve Jobs to survive. Instead they need tools that do what the iPod, iPhone and iPad do, organise, present and make intuitive the process of working with a tidal wave of information technology. Crack that and the industry really will be thinking different.

Ends

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