Non-marine related professions like MBA’s and lawyers are moving into the management areas in marine oil&gas industry and shipping , occupying all space in top management with their world view. Mariners is moving out due to the extra risk it adds to report to, be managed by and report to people not understanding the concerns of the marine discipline area. We actually see a profession war. A war on who is to have the best (top) positions in the industry. Competence is secondary. To apply correct competence to the task is risk measure # 1, especially shoreside and in the management functions.
A reputable company through more than 100 years in marine operations as Noble Denton (now DNV GL Noble Denton) was started in 1904 by one engineer (Denton) and mariners (Captain Noble and Captain Pedder), combining the competence of seafaring marine and engineering skills and know-how. Both engineers and mariners is normally practical more than theoretical people. The academics needs mariners more than we need them.
An era is over. According to studies 80% of incidents in the marine industries is made by human errors, and 80% of all those is management errors due to their lack of understanding of risks involved or not to put enough support or allocate sufficient funds to control the risk (?). Non-mariners shoreside now define and controls the risks associated with marine operations, without having a clue or competence to be successful. Expect a rise in accidents, and negligence claims. Also expect this people will always require scapegoats when things go wrong, that must be others than themselves. Watch up mariners, you’re an easy prey.
To keep the correct expertise and stakeholders (marine) out of the loop as part of the ‘profession wars’, don't have any say in the matter is more or less standard modus operandi in many companies. All is decided on top level, on 'Yes Sir' basis, no explanations given, no logical reason given, no transparency, simply pass the orders down the hierarchy, from the persons in their ‘Ivory Towers’, where they have locked themselves in to do some heavy thinking and decision making.
When it is British/Italian organization structure more than Scandinavian, than it is top down management, strictly vertical reporting lines, shuffling decrees and orders down in the organization from top, no horizontal line organizations as we are more accustomed to in Scandinavia.
“The former head of Costa Cruiselines, Pier Luigi Foschi, testified as a prosecution witness at the trial on Monday, telling the court that neither Costa nor Carnival bear any responsibility whatsoever for the captain’s errant actions before, during or after the disaster. “The company is not responsible for what happens on board the ship,” Foschi told the court. “For us, the ship should have never been in that place at that time on that night. We entrust the ship captain with full responsibility for the ships.”
If only life was so simplistic. Normally there is a chain of events leading up to incidents like this, like the investigation report of Bourbon Dolphin concluded:
“In its report the Commission points out that it is not possible to show that an individual error, whether technical or human, led to the accident; rather, a series of circumstances acted together to cause the loss of the vessel. ( ) It emerges from the report that a number of indirect factors have contributed to the accident.”
If Foschi is employing incompetent people, he is not responsible? The incompetent scapegoats on lower levels is responsible for his incompetency than?
Marine assurance as is this writers occupation is to assure decision and operations performance compliance quality in marine matters as per procedures, laws and regulations and branch standards.
This writer claim there is increased operational marine risks due to decision aversion and incompetency by responsible managers, this is a consequence of the unfortunate development of the organizations doing operations in the marine environment is ridden by profession wars, MBA's and lawyers fight their ways into all top manager positions..
Decision aversion is caused by incompetency, endless meetings to try to find the best and safest approach, but when there is only ‘Yes, Sir-people’ around, there will be no stakeholder management of value, as in this type of organizations the lower levels are basically only echo boxes of top management, too afraid to raise their concerns in opposition to any decisions taken, be it operational or organizational decisions.
(Internal) stakeholder management is a key element of risk management, Benoit Froment, Project Director at Borealis, says; “Their [stakeholders] interests and concerns are somehow risk factors”
It is actually a requirement in Corporate Social Responsibility policies to apply correct stakeholder management. Question everything that have an operational impact! Especially what comes from the ‘ivory towers’ and get it documented, in order not to be the scapegoat when things go wrong (they always will, calculated risk, just a matter of time).
We must remember that at upper levels, as things have progressed, there are MBA’s and lawyers, bureaucrats, not operational professionals. If they ever was vice enough to see their own limitations, and employ persons with the competence they are lacking, but most of the time competent people is not welcomed, seen as a threat, troublemakers, because they do not always agree on the ‘ivory towers’ decisions.
All marine operations are more or less a project and process.
The book 'Managing Project Stakeholders', by Tres Roeder defines stakeholders as “people who are subject to, are part of, or have decision making over a project.” “In summary, stakeholder management is required for all types of projects and change management processes" (Page 16).
Like the marine organizational change process, initiated and in progress in many companies throughout the industry as cost saving schemes today. The MBA’s and the lawyers will seldom do any saving of money to make themselves obsolete.
Roeder’s book says nothing that personnel acting as echo boxes for the management decisions is good stakeholder management. On the contrary, that is the most DANGEROUS and risky business, a company environment where people are afraid of rising their concerns, is detrimental to good risk management.
If the Second Officer on Costa Concordia was not too afraid of the Captain and raised his concern of deviation of passage plan, simply said no, this wouldn’t have happened. “Yes, Sir’ is bad stakeholder practice (and also bridge team management principles).
Baker (2007): “Recommendation 3: Process safety knowledge and expertise Develop and implement a system to ensure that all levels of management possess an appropriate level of process safety knowledge and expertise.
The panel recommends considerable stakeholder participation in the process. It is in effect asking for a complete competence assurance system for the organisation and its contractors that includes incident investigation and process hazard analysis techniques, and awareness training.”
“Recommendation 4: Process safety culture Involve the relevant stakeholders to develop positive, trusting, and open process safety culture within each refinery.
The expectation is that this is done by participation in a climate that encourages it where unsafe acts can be reported and used to improve the way things are done. Control, communication and co-operation are mentioned.”
Most big companies have a policy to actively engage internal and external stakeholders to understand and learn from their perspectives. The problem is many times that the good intention by words, is not implemented, not working as it is supposed to do in spirit.
The policy is not enough emphasizing on the risk control side of stakeholder management (to apply correct expertise the correct places, in correct positions), but it is a very good intention.
“Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large."
Competence Assurance is one of the means by which we can achieve sufficiently low levels of risk in the operations.
As DNV Vice President Graham Bennet, Vice President, Maritime Oil & Gas says in 2014 DNV Offshore Safety Report video presentation here:
00:30 Proactive vs. reactive approaches
08:11 Loss of confidence in the industry, with significant stakeholder concerns.
32:00 Advanced barriers, more than technical barriers, organizational, competence, etc.
33:00 Implementation of the nice words, big manuals…values and policies “Bennet: “They have just not implemented it", “to implement what they already have decided to do".
FOCUS: All the nice words on papers and manual needs implementation.
Exactly. For now they are only existing as a form of paper-exercises.
In order to do so, companies must actively engage internal and external stakeholders to understand and learn from their perspectives and take their professional concerns into considerations before any decision is taken. All companies are part of the communities they operate in and have that responsibility to all the companies stakeholders as well as the broader society.
“Corporate Social Responsibility is the continuing commitment by business to contribute to economic development while improving the quality of life of the workforce and their families as well as of the community and society at large."
So why is nobody interested in following this what corporate policy require in stakeholder management as part of CSR? Why have policies if nobody care to follow them?
Answer: Many companies struggle with the implementation. Writing all the manuals and nice words was the easy part. Now the difficult part of it remains, implement it in the mind and hearts of the workforce, from the top managers in their corporate ivory towers to the roughneck on the drill floor or the AB on the deck of the OSV AND the operational professionals at the office.
Stakeholder management from a risk perspective is based on the thinking that those in front lines is able to see things differently, and see risks, hazards and non-compliance’s the managers in their sometimes ivory towers is not able to see and/or understand themselves.
Stakeholders perspectives are dependent on their competency level in the disciplinary area they represent as stakeholders.
Human factor slide : Bernard Fontaine, Jr., CIH, CSP, AIHA Fellow. Managing Partner, The Windsor Consulting Group
Marine risk assessment, prepared by Det Norske Veritas for the HSE – Health and Safety Executive says about the value and importance of internal stakeholders in risk management, and the lack of it that it is risky business to let the barriers down in this regard:
Internal Stakeholder Consultation: “Finally the Risk Decision Context (see the UKOOA framework in Section 1.5.2) with higher elements of novelty, uncertainty or stakeholder concern will also push towards more thorough risk assessment."
That means if any stakeholders have any reasonable concerns, it needs more thorough risk assessment.
Stakeholder Consultations as mentioned as one of four Risk Assessment techniques in the same standard:
OFFSHORE TECHNOLOGY REPORT, 2001/063
The 'Yes Sir' organizations is absolutely not centered around doing what is best for the business as a whole (holistic). It serves the personal organizational Kingdoms of a few Emperors, who is a risk for the business, because every time this sole deciders are wrong in their judgment of any situation, than every time there has been a decay of the stakeholder management barrier, intended to control the risk of making the wrong decisions and not to do the things that lead to an unintended outcome.
The Yes Sir climate in any organization is risky business, because if the Emperor is wrong, than there is no-one to correct it, the fearful climate of being fired if saying against the will of the Emperor(s) will cause the organization to landslide into a decay of the stakeholder barriers. People will become subversive, and the risk of saying anything detrimental to the will of the Emperor, and his fury and possible vengeance, they will keep quiet.
If anybody speak their minds the Emperors have a set of tools available, some that is close to sociopathy, the people speaking their minds risk being frozen out, taken out of the loop in decision processes, is left to push binders around their desk, until they are psychological demoralized and quit.
The Emperor needs subordinates, not colleagues. Nor did he needs to hear anybody’s opinion. He is an expert in most of the issues himself (presumably).
Never question authority, do as you are told, and only as you are told. Even if you see as Stakeholder this is not good, and not right, risky, there is nowhere out; Do As You Are Told. There is only one expert in this business, and that is the organizational Emperors and their sole divinity in decision-making.
They think that to be wrong is a weakness, but the real weakness is the fear for being wrong, for losing their Emperor status, to accept the concerns, correct it, and go on, by the way of stakeholder management. It is the whole idea behind stakeholder management, that 2-3 brains think better than one, have different perspectives and sees different risks for the operations and/or decisions in change management that is implemented and have a broadest possible support in the organization, from bottom of the hierarchy to the top.
There is major risk involved with organizational changes not properly communicated, not been through properly stakeholder management, giving wrong roles to wrong less competent personnel. The re-structuring process over long time will present challenges to functional barriers, and cause that assurance processes will not be in optimal operation. They will be defunct, due to not clear roles and responsibilities in the time it takes.
Organizational changes presents challenges to barriers, says Bernard Fontaine, Jr.
Human factor slides from : Bernard Fontaine, Jr., CIH, CSP, AIHA Fellow. Managing Partner, The Windsor Consulting Group
Fear based management is not working as part of stakeholder management. There must be an environment of openness and honesty and respect for each others contribution to make it work. It will grow direct out of Company values, practiced in everyday decision-making, that means implemented.
In organizations run by Emperor(s) more than by stakeholder management the managers do not see it as a responsibility to answer emails and address legal stakeholder concerns by those who report to them. They regard it as their freedom to decide if the concern is of any value or not, if it should be allowed to be discussed in the open, in the collegium, between the professionals.
When Captain Schettino was sentenced to 16 years prisontime lately in the Costa Concordia case, it is a convenient solution to assure the insurance money is getting into the pocket of the people who shares responsibility for the incident that was costing 32 people their lives, because like always the root cause is normally systematic errors more than individual errors.
When the head of Carnival is stating public the sole responsibility of the Master, it is a statement not necessarily based on realities.
To manage risk we have competency requirements from the bottom to top of the shipboard organisation, but it is not ending there, as we shall see there is still the same competency requirements to the shorebased management, as it is for the shipboard managers and crew, because it is very often happen that safety and security is compromised long before it become a shipboard issue.
When shoreside financial personnel and business administrators are calling the shots and take all the decisions based on economical parameters and marketing considerations alone, given they have got the non-conformity reports as per the ISM System, they are fully and completely responsible for the outcome, even if they don't understand at all what is reported. If they filter it out due to lack of knowledge and/or understanding, they are still negligent and can be tried for that negligence in a Court of Law.
HSE Gov UK
“Inspection of nearly 100 offshore installations (HSE, 2007b) found amongst other shortcomings that there is poor understanding across the industry of potential interaction of degraded non safety critical plant and utility systems with safety critical elements in the event of a major accident, that the role of asset integrity and concept of barriers in major hazard risk control is not well understood, poor performance in management systems has been further exacerbated by a workforce that is depleted in experience, etc.
The reports from the HSE’s inspectors point to poor procedures, lack of competence or lack of supervision as the main causes of process safety incidents often involving major hazards. It can be concluded that these issues share a common cause which is failing to deliver the appropriate knowledge to the work site (Miles, 2006)."
Managers competence was insufficient (barrier decay). Barrier decay or failure modes express deterioration of the barrier functions.
DNV GL Offshore Safety Report
“Advanced barrier management In Offshore Operations
Page 11: “The scheme is further extended by depicting the barrier decay mechanisms, which also show what specific controls are put in place to prevent degradation (eg, training, competence, inspection, preventive maintenance), see Figure 8. The process includes assigning responsibility for all barriers to the appropriate parties in the operations. The term barriers is in this instance used interchangeably with controls or safeguards, which are any technical, human or organisational feature interrupting an accident sequence – either stopping it or reducing its likelihood or consequence or both."
ISO competence requirements
ISO 9001 Clause 6.2.2.a Competence, Training, and Awareness Requirements 'determine the necessary competence' (6.2.2.a)
6.2.1 Personnel performing work affecting conformity to product requirements shall be competent on the basis of appropriate education, training, skills, and experience.
Do management need to be competent? The short answer is yes. They have a significant impact on the ability to meet requirements, on operational safety performance, and they need to be competent too.
Note: Conformity to product requirements can be affected directly or indirectly by personnel performing any task within the quality management system.
Competence Awareness and Training – ISO 9001 Clause 6.2.2 d)
Clause 6.2.2 d) ensure that its personnel are aware of the relevance and importance of their activities and how they contribute to the achievement of the quality objectives, and
6.2.2 Competence, training and awareness
The organization shall
determine the necessary competence for personnel performing work affecting conformity to product requirements,
You need both. Competence is defined as “the demonstrated ability to apply knowledge and skills." ISO 9001 requires that we define competencies in terms of education, training, skills, and experience. This goes for management as well.
There should be set competency requirements for all positions in the company:
For some positions you may require a person to have all of the competencies before you hire them.
For some positions you may require a person to have education and experience, then you will provide training and help them to develop the skills.
For some positions you may have no requirements for education or experience, and you will provide training and help the person to develop the skills.
Whether done before or after hiring, the company is responsible to define the requirements, and then to ensure that the defined requirements are met – with records to demonstrate conformity.
ISO 13485 says we shall
determine the necessary competence for personnel performing work affecting product quality,
ISO 9000. There we find it listed twice.
3.1.6 competence; “demonstrated ability to apply knowledge and skill. “
NOTE: The concept of competence is defined in a generic sense in this International Standard. The word usage can be more specific in other ISO documents.
“(audit) demonstrated personal attributes and demonstrated ability to apply knowledge and skills.”
Competence in stakeholder management. DNV says about verification/assurance activities:
DNV B 400 Verification Management
401 The philosophy and verification methods used shall be described in a Verification Plan to ensure satisfactory completion of verification. The philosophy and these methods should ensure that verification:
402 All verification activities shall be carried out by competent personnel. Competence includes having the necessary theoretical and practical knowledge and experience of the activity being examined. An adequate verification of some activities may require access to specialised technical knowledge.
403 As well as demonstrating competence of individuals, the verification organisation shall also be able to show competence and experience in verification work for relevant assets.
DNV-OSS-300_2011-10 Risk Based Verification
DNV-RP-h101_2003-01 RISK MANAGEMENT IN MARINE – AND SUBSEA OPERATIONS
In ‘A Sixth Sense for Project Management’ (everything we do are more or less a ‘project’), Mr. Roeder, in Section Two discusses five stakeholder groups: project team stakeholders, executive stakeholders, external stakeholders, stakeholders subject to the change, and phantom stakeholders.
Chapter 1, What Is a Stakeholder?, he defines project stakeholders as people who are subject to, are part of, or have decision making over a project. 'A Sixth Sense for Project Management' also highlights the need for the project management profession to embrace people skills. Section one, comprised of three chapters, “documents research showing that people skills are more highly correlated with project success than project management technical skills”.
The standard was named ‘A Guide to the Project Management Body of Knowledge’. Today, in its fifth edition, this document is called the PMBOK® Guide. The latest version of the PMBOK® Guide includes a chapter devoted to stakeholder management, Chapter 13.
Any company that can not show that they have secured the correct and appropriate competencies in stakeholder management what is in effect advanced barrier management, can by definition if anything unplanned is happening be regarded as negligent. Applying correct competence is one of the main controls and mitigating factors in any risk management. If this is not done by management, if they need echo boxes more than stakeholders, than they are to take the responsibility when things go wrong also, we can not blame the lower level incompetent, for the incompetency on top levels.
NORSOK Standard Z-103. 3rd Ed. Oct. 2010:
5.8 Communication and consultation. 5.8.1 Objective
The objective is to involve relevant internal and external stakeholders (relative to operator), at the right time and with the appropriate level of involvement throughout the entire process, as a measure to improve the quality of the risk assessment process and its ability to be tailored and suitable for its intended purpose(s).
Experience transfer from personnel with operational knowledge from practical utilisation of critical equipment and systems is of importance to establish high level of safety and predictability of risk assessment outcome.
Effective internal and external communication and consultation shall be done to ensure that those affected by the hazards and those accountable for managing the risk understand the established context on which the results are calculated and evaluations are made, the risk picture, and the reason why particular priorities may be needed in the risk treatment.
5.8.2 Communication and consultation :
a) a plan to communicate and consult with internal and external stakeholders shall be developed at an early stage of the process;
b) the plan shall address communication and consultation related to (but not limited to)
- the establishment of the context for the risk assessment,
- the execution of the assessment,
- how the assessment and its results shall be communicated to various stake holders,
- involvement of personnel with operational knowledge (STAKEHOLDER MANAGEMENT).
An active internal stakeholder management policy to be implemented, in order to be able to identify risk and hazards from all technical disciplines and professional perspectives, before any decisions is taken. The company is than able to identify, analyze and control the risk associated with the individual stakeholders potential concerns on an early stage.
If this is not done, this is not as required by the ISM Code, that all risks is to be identified. No proper process applied. Management errors.
If a manager is incompetent, there is high probability that all persons this manager employs below him is incompetent also, and is employed to sit still, and not rock the boat, not be competent enough to threaten the managers position in the profession wars in top management circles. Some will be happy get him-/herself an idiot saying ‘Yes, Sir’ to all he says, than he will feel very self-assured he is competent, because nobody is saying against him.
People tend to employ people compatible to themselves, or subversive to themselves, and if this is allowed to develop, in the end the whole organization will be of a corrupt and incompetent nature, corruption of policies, values and procedures at least, enforced corrupt and/or incompetent from top all the way down to the bottom.
This is the most unfortunate form of corruption of competency standards and GRC considerations, and the hardest to get rid of, because it is managers who should secure a clean organization, that is corrupt, and will not contribute to find the truth, but on the contrary will take every step to stop the investigation from identifying the real problem, that might rest on themselves.
The best and most successful top managers are those who dare to employ and be challenged by people smarter then themselves, and apply correct stakeholder management philosophy. This manager will surely keep the associated risk under control. Lawyers and 'professors' of GRC and risk management without practical experience and understanding of the nature of business they operate in, is a risk factor in itself, and should be avoided by all costs, as they are not able to correctly identify the risks and non-compliance’s of the business..
The writer is a Master Mariner with an economical degree from Norwegian School of Management (BI) and certified risk manager. English is not his native language.