ContributionsShipyards

CEO Chronicles #16: How to escape from prison!

ACT 1, SCENE 1 : The monkey in the room

[An office. The CEO stands with his feet apart, hands on hips. The COO sits on the edge of the couch, looking up at the CEO.]

“THIS IS A SHIPYARD! THIS HAS ALWAYS BEEN A SHIPYARD!”

“Yes, I understand, but…”

“FOR MORE THAN 20 YEARS, WE HAVE BUILT AND DELIVERED SHIPS! GREAT SHIPS! AMAZING SHIPS!”

“I agree. Superb ships. But…”

“I JUST DON’T UNDERSTAND YOU! WHY ARE YOU ARGUING? THIS IS HOW IT HAS ALWAYS BEEN! IT IS HOW IT IS GOING TO BE! END OF DISCUSSION!”

[The CEO stops shouting, turns and walks out. Door slams. Silence descends on the room. The COO shakes her head, gets up and walks to her desk.]

 

ACT 1, SCENE 2 : “We don’t grab the bananas around here”

[Another office. The CFO sits at his table, scanning a spreadsheet. The COO sits across him, leaning back, her fingers steepled.]

“The last ship we built? Oh, let’s see,” the CFO replies. “Mmm. Hmmm. Ah, about four and a half years ago.”

“And that’s quite a while, don’t you think?”

“Yes, yes. Too long. Once we launch that last vessel, our production pipeline is empty.”

“So, how have you been managing our costs?” asks the COO, gently.

“Managing? Hah!” the CFO practically spits out. “All my trousers have holes in the knees given how much I am begging! Nowadays, my default position is on my knees. In front of the banks, the vendors, the bondholders, the creditors, everyone!”

“It must be frustrating…,” she murmurs. After a moment, she sits up. “Have you considered looking at this business from a different angle?”

The CFO looks up, and at her. “What angle?’ he asks, uncertainly.

“I was thinking – wouldn’t it be better to operate the ships? Given our empty order-book?

“Operate ships?” The CFO’s tone turns to incredulous. “What do you mean, operate? We don’t operate ships!”

“I believe we have operated ships in the past,” the COO says, “and quite well, too.”

“Oh, that’s only when our ships haven’t found buyers yet. That’s just a stopgap. We are not really operators.”

“You’ve been here only 3 years. What do you think stops us?” the COO asks, leaning back.

“Come on! That’s a silly question!” the CFO exclaims. “You know what stops us. We are not an operator – we are a shipyard. We have always been a shipyard. After all, this is our DNA. You have been here only a few weeks. You’ll understand soon enough!”

“I see…” She rises, preparing to leave. “Thank you very much for taking the time to take me through the numbers. See you later…”

[The COO leaves the room. The CFO continues looking at the door, his brow furrowed.]

 

ACT 1, SCENE 3 : Breaking from the past

[A restaurant. The COO is having lunch with three men. The four seem comfortable with each other, joking and laughing.]

“So, you think the market can absorb my ships?” the COO asks. “Which regions? Any specific clients in mind?”

The oldest man speaks up. “West Africa, Qatar, Egypt, India. We are holding enquiries from clients in all these regions. Your ships are perfectly suited.”

“What kind of charter rates are we talking about?”

“Oh, you’ll be pleasantly surprised…”

[The lunch and conversation continue. The COO listens carefully, asking measured questions, nodding, smiling, absorbing.]

 

ACT 1, SCENE 4 : “I am NOT what happened to me!”

[A boardroom. All 12 seats are taken. A Powerpoint presentation has just concluded.]

“So, on the one hand, we can continue to operate as a shipyard. In other words, a cash burn of about 3 million dollars a month. The enquiry funnel is empty, but there is a possibility that this may turn,” the chairman says. “I believe that is correct?”

“On the other hand, we reposition ourselves as a ship operator. If we do this, and we achieve our target utilisation, we break-even in 8 months. But, most of the management team disagree with this approach, on the basis that we are a shipyard and not an operator,” the chairman pauses. “Any comments?”

“Yes,” says the CEO, leaning forward. “I am sure we can turn the yard around. All we need is another 40 million dollars, and we will make sure…”

“If I am not mistaken, that’s what you said last year,” says one of the directors, mildly.

“Yes, but that was different!” the CEO exclaims, “the market did not support us!”

“Have market conditions changed substantially?” asks another director.

“Well…, my marketing team is confident that it will soon. The signs are all there,” the CEO says, with a touch of uncertainty in his voice.

“And, madam,” the chairman says, turning to the COO, “what is your level of confidence in this new approach?”

“Well, chairman,” says the COO, sitting up straight. “I have shared the market data with you, along with customer and broker opinions and a list of current enquiries for our ships. Most importantly, I believe that this is the only way to move forward. In the past three years, we have already burnt 72 million dollars with nothing to show for it. We should be escaping the prison of the past. I am sorry that I am in disagreement with my colleagues, but I see no other option.”

“Fair enough,” the chairman says. “May I request the management team to allow the directors to confer? Thank you so much.”

[The CEO, CFO, COO and commercial head leave the room.]

 

ACT 1, SCENE 5 : We choose our own prisons

[The Boardroom. The chairman sits at the head of the table. The CEO and COO sit on either side.]

“Well,” says the chairman, “after detailed discussions, the board has unanimously agreed to reposition ourselves as a ship operator. I understand that this means…”

[The CEO pushes back his chair, face grim. He walks out of the room. The chairman and COO look at each other.]

 

ACT 1, SCENE 6 : We are what we choose to believe

[The CEO’s office, eleven months later. The former COO is answering the questions of two journalists.]

“…this is an amazing turnaround,” says one of them. “You narrowly escaped liquidation and closure! And now I understand you are well on your way to profitability!”

“Yes,” she says, smiling, “our vessels are running at 85% utilisation, and our clients are happy. We have started repaying our creditors on an agreed schedule. All in all, the team has done a great job.”

The other journalist leans forward. “I need a quote from you,” she says. “about what drove you to do what you did.”

“Well,” the CEO says, “I have always been guided by Edmund Burke’s advice, ‘Never use the past to plan the future’. It came in very handy this time…”

Venkatraman Sheshashayee

Venkatraman Sheshashayee (Shesh) is Managing Director of Radical Advice, a business transformation advisory based in Singapore. He has over 34 years of experience in manufacturing, shipping and offshore oil & gas. Shesh’s previous roles include CEO of Miclyn Express Offshore, CEO & ED of Jaya Holdings Limited and Managing Director of Greatship Global. In his new avatar, Shesh helps SMEs, start-ups and aspiring professionals achieve their potential.
Back to top button
Close
Close