Nov. 12, 2021

#11 - Bjørn Højgaard. The value of strategic partnerships.

#11 - Bjørn Højgaard. The value of strategic partnerships.

Bjørn Højgaard is CEO of Anglo Eastern Univan Group, one of the world’s leading ship management companies. He’s been director at Thome Ship Management, Brigantine Group and A.P. Møller Singapore, as well as manager of operations, efficiency & IT for APM Terminals.

Before moving into shore-side management, he was a master mariner with A.P. Møller - Maersk, commanding one of the shipping group’s largest container vessels at the time.

He is the present chairman of the Hong Kong Shipowners Association, a council member of INTERTANKO, chairman of the Maritime and Port Development Committee under the Hong Kong Maritime and Port Board, a member of the Hong Kong Trade Development Council’s Logistics Services Advisory Committee and a general committee member of The Sailors Home and Mission to Seafarers in Hong Kong.

We talk about how important it is to team up with the right strategic partners  and the similarities between management and art.


Highlights and take-aways

The seafarer’s life has changed a lot over the past 20-30 years. But even though we have had V-sat in the last 20 years, it's been extremely expensive for a very narrow bandwidth. With some of these low earth orbiting satellite technologies that are now being developed by various companies we may see 10x improvements in price and bandwidth, which would be a game changer for life on board. The feeling of solitude, and perhaps loneliness, can be mitigated by proper communications tools for staying in touch with friends and family.

Anglo Eastern (AE) teamed up with Wartsila to develop fleet operating systems and vessel performance management systems. Even at 650 ships, Bjørn believes that AE don’t have the scale on their own to develop the tools that are required in that space. 

As a CEO in a business you’ve got to realize what you have scaled for and what you don't. In the areas that you don't, teaming up with strategic partners almost becomes a necessity.

You also need good self awareness of what capabilities are residing inside your organization, and how far you can take those capabilities. You need to be open to the potential of working with external experts, leveraging their networks, and their ability to bridge some of the pockets of expertise within your organization. You may then find a winning formula for doing something together. 

Towards decarbonization, multiple pathways of different fuels or different engine technologies will be tested. It may be decades before we know the best path. Ship builders therefore face higher risks. But the potential rewards are also bigger and for those who do get it right, shipping could be a very lucrative business in the next decade.

A culture that allows failing, learning and innovating must be embraced or your company will become a very stale place to work. The CEO’s job is to take that longer view and think a bit outside the box. And making sure that the culture keeps evolving away from becoming introspective and “unlearning”. We have to keep learning.

Systems, structure and process is one side of the coin, and the people and the culture of the company is very much the other side of that coin. For example, whether you bought the right kind of ship at the right time in the cycle we can't do much about, but we can make sure that ships are run optimally and safely. And that comes down to culture. 

Culture is not static, contrary to what many believe. Management consultancy sometimes means having fixed solutions to fixed problems. It can assume one  best way of doing things. What makes you successful in one area can be an Achilles heel in another area. One example of that is if you are a company that celebrates perfection, that encourages perfection in execution. You tend to have some performance deliverables that aim for perfect execution, but you very often end up with risk aversion where you forget to innovate and forget to learn. Learning involves falling and getting up again, and falling is, seemingly, opposite to perfection. 





It's easy to come in as a CEO and say: I just want to erase the past. I want to bring my own stuff in. But that’s not healthy for performance. You have to be very careful at tinkering with the fundamentals and make sure that you are evolving rather than revolutionising a business like Anglo Eastern. The culture of the company is felt acutely on all 660 ships. And you have to be cognizant of the fact that every time you tweak any of those parameters, the outcome on board each ship will be different.

A business is almost like a piece of art. It's the subtleties, the uniqueness that may be hard to describe at first glance, but that really defines where the company's going and how it's going to get there. As a CEO, it's about recognizing that uniqueness, it's getting to know those imperfections, and then using them to your advantage, rather than trying to become a copycat of everybody else. “Management speak” is often like, “this is the way things must be done”. We are all going to do the same. But the beauty is in seeing, as the artist sees the canvas, and the special and unique, and then figures out how to leverage that little bit that may be very subtle, to get a very different and better outcome.

You have to make sure that the performers in the existing business aren’t sacrificed on a journey of radical change. You really risk throwing the baby out with the bathwater. Sometimes, you may need to start a new business unit to run with disruptive innovation. But most years in most businesses, you can evolve your culture and your capabilities, respectful of the good practices that have brought you to where you are. And being firm about changing the practices are outdated and need to be evolved. You really have to have the courage to trust your people to get on with it. You need good policies, structures and processes. But don't be too hung up on that. Rather find ways to set people free to live out their passion, because that's really driving performance. The difference between winning and losing shipmanagement is the difference between a compliance culture and a commitment culture. You have to build a commitment culture. Compliance puts a ceiling over how good you can become, whereas commitment culture puts a floor under how badly you can perform and the space above you becomes open.

 

The principles that we live by as a company are very important - and that tone has to be set from the top. What are we doing here? How are we doing it? Why are we doing it? What are the lines that we as a company will not cross? I think all those kinds of things have to be said very clearly from the top to spell out expectations. 

People need purpose, autonomy, and mastery to be motivated and committed. You need to put in the effort to make sure everyone has all three. 

As a CEO, you need to learn to enjoy a bit of chaos. If you enjoy control too much and knowing everything that's going on, then you can be sure that you're going to put the brakes on too much because you can't oversee everything and everyone. So you’ve got to get to a place where you can read the signals. But you don't know everything. And that's okay. Because it's almost like an organic journey that the company takes on its own and you're just there for the ride.

With AI and machine learning, we can augment the human decision makers on board so that what they need to think about will be on a higher level compared with what they think about today. We’re going to see an explosion of use cases throughout a ship as every bit of the ship gets connected and the data becomes useful in terms of supporting decision making. Whether you're the operator of the ship or the charterer, all that information will enable you to make better decisions about how to use your ships gainfully in a commercial sense. The bandwidth jump we are going to see in the next few years is going to be important for this shift. This will be one of the biggest trends in the next 10 years in ship management,

Maritime Makers Quality Quotes

“As a CEO in a business you’ve got to realize what you have scaled for and what you don't.” - Bjørn Højgaard.

“You have to keep evolving and innovating and developing what you do to stay relevant. “ - Bjørn Højgaard.

“The difference between winning and losing shipmanagement is the difference between a compliance culture and a commitment culture.” - Bjørn Højgaard.

“Compliance puts a ceiling over how good you can become, whereas commitment culture puts a floor under how badly you can perform and the space above you becomes open.” - Bjørn Højgaard.

 

Resources

Anglo Eastern

A nice explainer video of the principles of purpose, autonomy, and mastery.