by Peter A. Arthur-Smith, Leadership Solutions, Inc.®

“Organizational effectiveness does not lie in that narrow minded concept called rationality. It lies in the blend of clearheaded logic and powerful intuition.” Henry Mintzberg, Cleghorn Professor, McGill University

It’s great to have enjoyed so many friends and clients associated with the maritime industry over the years. This writer has often been involved as an objective strategic advisor, where it’s been interesting to observe many dramatic market ebbs and flows in the shipping field over the past 30-40 years. Right now it’s all about the Pandemic and its aftermath.

Those adherents to management-efficiency thinking have usually presided over ventures that closely mirror those highs and lows. Meanwhile, the leadership-effectiveness thinkers have either done remarkably well during the good times or done comparatively well during the lean years. Why is that?

Let’s consider the fundamental differences between management and leadership to begin with. Manage- ment is in essence about systems and process, while leadership is about people and progress. Maritime managers are therefore happy when they have a tidy ship and all their systems and processes are running smoothly; even if an iceberg may lie ahead. Maritime leaders, on the other hand, note how their people step-up during difficult times and, in their leader role, are particularly good at finding the next market wave.

Now we can explore the important distinctions between efficiency and effectiveness. Managers are often so efficiency obsessed that they utilize the term even on the few occasions when they do pursue an effectiveness strategy. Leaders by contrast usually pursue effective paths, which is why they often make significant breakthroughs and innovate when times get tough. For that reason, it’s worthwhile to clarify some of the key differences between these two mindsets as follows:

                 Efficient                                                          Effective

» Relatively quick, easy wins                                » Deeper, longer-lasting wins

» Relies upon either-or outcomes                         » Looks for wider creative options

» Squeezes on resources                                     » Optimizes overall resources

» Allows for expeditious solutions                         » Finds more profound solutions

» Depends upon financial acuity                           » Depends on behavioral acuity

» Demands ‘penny-pinchers’                                » Needs a breakthrough team

» Often driven by owner/                                    » Usually driven by customer/

shareholder imperatives                                      marketplace imperatives

By definition, this means that maritime managers will so often put today’s bottom line ahead of building for the long run. They will struggle to minimize the risks when the market-weather gets rough.  During the lock-down they were among the first to lay their people off in order to preserve profitability. Little consideration was given to the possibility that their laid-off talent may never return, as it could be snapped up by more far-sighted ventures.

By contrast, maritime leaders did everything possible to retain their people talent as long as possible. They valued the prospect of their people working doubly hard once the lockdown was over to help recoup lost ground. Loyalty given is loyalty kept. Besides, finding new talent is always an expensive and time-absorbing proposition that managers don’t normally take into account until it hits their bottom line.

While maritime managers fiddle around with their venture’s numbers as markets tumble, in order to find comfort in the details: maritime leaders focus on their people’s talents and how they can stimulate them to find positive avenues for continued forward momentum. Additionally, while managers are constantly scouring for quick wins, their leader counterparts are laying the groundwork for more solid gains over time. So, it’s high time we acknowledged these important differences and try to shift the balance accordingly.

For those maritime investors and market watchers who are looking for particularly valuable market plays, they should pay special attention to any venture’s leadership-management talent. More importantly, they should look deeper than just the superficial numbers: look at how the enterprise performed during the down-markets – assuming the same leadership remained in place. Try and build some insight on the venture’s morale and its leadership-people potential. If the possibility exists, go and have lunch with its leaders on the basis of pursuing a feasible investment. Perhaps you will be lucky enough to be infected by the same genuine leadership qualities as described earlier. Even request the opportunity to sit in on one of its leadership forums.

The one thing you can be pretty certain of is that you’re more likely to find anything from a poor to well-‘managed’ entity where its ‘efficiency’ moves exactly mirror the ups and downs of the shipping marketplace. They are in the majority. You may occasionally find a well-‘led’ maritime venture that does better than most of its market counterparts through its ‘effectiveness’ strategies: even during Pandemics or other tough times. Those well-led ventures are to be treasured and are treasured by the people who work within them.

To learn more about building momentum, talk with: