The future of business, and what that means for the shipping and maritime industries (summary of my key messages at Shipserve Smart Procurement event 2015) Great Circle

The Great Circle just published 2 good pieces on my recent talk at a Shipserve / Fathom shipping event/ (more details on that event, here).

Part 1:  for a stake in the future, embrace the competitionScreenshot 2015-08-25 07.31.19

Part 2: creative destruction and value creation

Some high-lights below

Leonhard says that adaption is more a question of mindset than intelligence; developing the foresight that makes room for new levels of assumption. “This is the same in all industries, but it gets worse the deeper you get inside a B to B relationship because you feel extremely safe and you may have stasis blocking innovation”  “Perhaps shipowners need a good dose of future shock, because in a downturn clients realise if they haven’t paid attention to and that instead suppliers have basically protected their castles while they were able to, rather than think about what was coming,” he says…. His parallel is Airbnb – a start-up with no assets that took only a few years to achieve a market capitalisation greater than the Hilton Hotel Group by unlocking pent-up demand that individuals could meet better – and more cheaply – than the hotels themselves. Industries with high margins will naturally tend not want to look at the future, but the recorded music industry provides the same parallel – a high margin business that failed to see what was coming next, even though the advent of digital music should have been a warning. “What will happen in shipping is the end of what I call ‘managed dissatisfaction’, which is inherent problems in a system that everybody has come to accept,” he says. The most obvious example is the inability to watch a TV programme whether it’s from last night or 15 years ago. “But now, new people come in and say there is no more management of dissatisfaction, there is no built-in inefficiency, we can do this for a lower price and there’s complete transparency”…  “Clearly there is an opportunity for someone to consider what is needed in terms of collaboration, investment in technology, acquiring start-ups, look at issues like energy usage and become the global shipping OS,” he says. Do that and they are much better placed to respond before the point when fewer physical goods are shipped and in far smaller volumes. Leonhard thinks the logical thing could be to get into your competitors’ market, rather than run from it. “If you know 3D printing is going to disrupt you in the long term then you should get in and take a position so at least you might profit from when it goes mainstream rather than ‘saying oh yeah we never thought that would happen’” read on… part 1

He points out for example, that disruption is only the start of a process which logically includes constructing something new – added value is about more important than skimming the easy wins off the top. “There has to be a happy medium between destruction and construction and it is much clearer how to organise value around future models rather by their disruption,” he says. As a result, he says the biggest disruption to shipping will likely be around the efficiency of logistics, optimising vessel performance, the greater use of robotics and energy usage. All pretty positive, except perhaps for a final element, which will be to make the market more transparent. The abundance of connectivity, data and options will have the effect of making services much easier to compare, forcing owners to create brands that stand for something beyond the ability to ship stuff or be a port that receives them. Just as in the consumer market, the human rhythms we use to make choices based on emotions, perceptions, value and trust, will become more important for businesses who wish to remain trusted brands… part 2

Below is the video of my talk

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