By Peter Cottrell CA(SA)
This reflection is part of our series on Leadership Response in a Time of Crisis, focussing on Surviving the Storm. We draw on lessons learnt from a disaster at sea, the 1991 sinking of the Oceanos off the Wild Coast of South Africa. A moment of extreme crisis at sea brings into sharp focus the inherent risks that lead to the crisis, the adequacy of safety systems and the leadership response to the situation. It is said that we are judged more on how we react to adversity than the underlying incident itself. This proves very true of an incident at sea and there are equal parallels to the challenges and adversity that we find in business. The role of leadership in shaping the outcomes to a crisis is worthy of careful reflection.
The Covid-19 pandemic, the responsive lockdown measures and consequent economic impact have had a profound and rapid impact on many organisations and the teams that work in them. Some have characterised this crisis as a “Black Swan” event, something rare that comes as a surprise and is considered difficult to have predicted, but is obvious in hindsight. Others refer to a “Grey Rhino”, something that is highly probable, has a high impact and often represents a neglected threat. The Grey Rhino school notes that medical scientists have been warning of a global pandemic scenario for years and there is evidence that all was not well with the world economy prior to the Covid-19 pandemic.
Irrespective of the root causes, there is no question that the world economy is now in completely unchartered waters, accompanied by extreme uncertainty and experimental monetary policy being applied on an unprecedented scale. For some there will be tremendous opportunities as new technologies and business models emerge. For others, there will be risks just beneath the surface of the water that could have catastrophic implications if not adequately addressed. Themes of poor visibility and unknown end outcomes persist.
This series of reflections does not come from the safety of a business that has worked through everything and has all the answers. Yes, Strategic Business Support has taken proactive decisions and has found a place of relative stability. But there have been genuine body blows along the way, unexpected events that are painful and dramatically impact on the stability of the business. To use our maritime analogy, there have at times been a feeling that the ship is taking on a bit more water than the bilge pumps can cope with. This has tested the leadership and resolve of the team and has required decisive decisions to be taken.
The world of seafarers on which we have been drawing our inspiration is also no easy place at the moment. Many seafarers are facing unprecedented hardship as they find themselves unable to disembark from their ships at the end of contracts after sometimes six months or even a year at sea. Even if they were able to disembark, international flight restrictions would make travel home next to impossible. Many are suffering extreme fatigue, anxiety and mental distress which impacts on their wellbeing and presents risks on work performance. There is further disappointment when arrangements have been made for disembarkation only to find that arrangements did not work out, or there is a further period of quarantine once they get to shore before they can return home. This all represents another damaging wave in what has already been a significant storm.
Just before the onset of the Covid-19 crisis I was given a copy of Andrew Pike’s outstanding book “Against all Odds, the Epic Story of the Oceanos Rescue”.(A) When I started reading the book it was with the specific objective of escaping from the overload of news, information and misinformation, and finding something that specifically did not contain the words “Coronavirus” or “Covid-19”. The book is brilliantly narrated and is a thrilling read with accounts of heroism and bravery based on incident reports, interviews and eyewitness accounts. I found myself thoroughly stimulated, noting the response to a crisis and the leadership that emerged. A chapter is devoted to “Lessons Learned from a Black Swan”, which draws together outstanding leadership insights. This led me back to the Covid-19 crisis and the role of leaders in the crisis. The reflections that follow are inspired by the book and it is well worth a read if you have not already done so.
A disaster at sea
The sinking of the Oceanos occurred in August 1991 off the treacherous South African Wild Coast, a coastline that has claimed many ships and lives over the years. The coastline is known for enormous waves, sometimes in excess of 20 metres, which place enormous stresses on a vessel and can swamp it with water. The Wild Coast is beautiful but isolated, offering very little access to rescue facilities.
The weather on the day of the Oceanos disaster was particularly treacherous. Add to this that the ship was old, having been built in 1952, and safety equipment was not in an optimal state of repair. Leadership and systems onboard the ship failed, sometimes catastrophically. All of this makes for a disaster that should have claimed a devastating loss of life. Yet against all the odds, not one life was lost and one of the “greatest and most successful maritime rescues in history was staged.”(A)
The impact of risk
I find the account of the ship leaving East London for Durban fascinating. The book describes a “voyage to nowhere” the previous night, where the passengers were violently ill and the ship had to return to port for the night as the planned activities could not take place in such wild weather. The following day there was a prolonged delay in the hope that the weather would improve. Eventually, the Captain decided to set sail for Durban, a decision that he, in his position, is ultimately responsible to make. There is an account of the junior crew being terrified, and describing the Captain as crazy. The ship had great difficulty in even leaving the port of East London unassisted.
In maritime convention, the overriding emphasis is on the preservation of life as cited in the Safety of Life at Sea convention (SOLAS). The best way to save lives at sea is to avoid the danger or incident altogether. “A Master has a responsibility to navigate in a safe and prudent manner taking into account all circumstances including, but not limited to, the existing conditions and the limitations of the vessel involved.”(B) The decision of the Captain of the Oceanos to set sail in such treacherous conditions seems almost inexplicable, possibly driven by the short term commercial expediency of ensuring that the ship was in Durban in time for a voyage scheduled for the following day. The results of ignoring the inherent risks of a treacherous coastline in severe weather were disastrous and could have resulted in a tragic loss of life.
There are interesting parallels for us in the Covid-19 business context. What are the underlying risks facing our businesses, particularly as we enter into these unchartered waters? What are the dangers or challenges that lurk beneath the surface and that could cause catastrophic damage? Are our businesses sufficiently robust to navigate through the adverse weather that we are facing? Are our resources, systems and balance sheets strong enough? This underlines once again the importance of evaluating risk before we embark on a particular course of action. Decisions that are expedient in the short term may well have catastrophic impact in the months and years ahead.
The fateful voyage of the Oceanos in this treacherous weather is described as hazardous, with waves breaking over the bow of the ship and the crew experiencing great difficulty in navigating safely. Things were no easier for staff and passengers, with the evening meal proving almost impossible to serve, and movables being flung about as the ship bucked in the storm.
The situation took a devastating turn for the worse when a massive wave crashed against the port-side hull, ripping the sea chest off the hull and allowing water to rush through a gaping hole.
The ingress of water quickly resulted in the loss of the ships engines. Swells in excess of 20 metres were reported from other ships at the time. Adding to the disaster, a sewerage pipe that had been removed to clear a blockage would eventually allow seawater to penetrate the rest of the ship, notwithstanding watertight doors and bulkheads.
In such heavy seas, in foul weather, off a treacherous and isolated coastline, this was a recipe for disaster. There was no nearby rescue infrastructure that would help the ship or passengers to safety.
One of the most striking incidents is described by entertainer Moss Hills, one of the true heroes of the disaster:
“Suddenly, the attention of everyone in the lounge was caught by a loud rumbling noise, a bit like a passing race of horses’ hooves. Moss looked out of the large windows and was astonished to see the silhouette of a lifeboat being lowered.
“He went cold with fear. He was almost certain that the lifeboat contained officers. Who could or would have the authority to launch the lifeboats? Given the running around in the corridors he had seen earlier and his conversation with Lorraine and the second officer, it could only be senior crew in the lifeboat being lowered past the windows. Were the officers abandoning the ship and leaving everyone behind?”(A)
This is a sobering check for those in leadership of how our actions measure in the face of adversity and how they will be judged with the benefit of hindsight. Our previous discussion on the mental state of the Captain of the Costa Concordia illustrated the risks of stress and normalcy bias. The reactions of the Oceanos crew once again illustrate the importance of the wellbeing of leaders so that they have the resilience to deal with the most difficult of crises.
Abdication of Leadership
The role of formal leadership in determining the outcome of a catastrophic event at sea is fascinating.
There is a widely held perception that in a maritime emergency, priority must be given to the evacuation of women and children as occurred on the Birkenhead (1852) and the Titanic (1912). In fact, there is no such legal requirement or code, and research by Elinder and Erixson has shown that in general, the survival rate of men is far higher than that of women and children. In the case of the Titanic, 70% of the women and children were saved compared to only 20% of men. The analysis concludes that the defining difference between the Titanic and other shipwrecks was the instruction given by the Captain that women and children should be saved first.(C)
Aside from any perceived moral obligation to save life, the SOLAS convention places formal requirements on the Captain to ensure that everybody gets off the ship safely. A Captain needs to coordinate the operations for the evacuation of the ship.
In the Oceanos account it is therefore shocking to read of the Captain attempting to board a lifeboat and being stopped by the passengers, and then later leaving by helicopter to allegedly coordinate operations from shore. There is very little evidence of the ship’s officers communicating with the authorities, or even giving information on the ship’s coordinates. No formal alarm or instructions were given, which would make rescue efforts all the more complicated.(A)
It is chilling that the crew seemed to have understood that the ship was doomed to sink, but that there seems to have been an almost complete abdication of formal leadership and that a decision to “abandon ship” was never formally given. Ordinarily, this would have resulted in the tragic loss of life, as witnessed in the Costa Concordia incident.
In a maritime context, the abdication of formal leadership can result in loss of vessels, loss of cargo and, tragically, the loss of human life. In our business context, abdication of formal leadership can have similarly catastrophic impacts where teams end up operating without direction and businesses flounder as critical strategic decisions are not made. This becomes particularly damaging in a high risk changing environment.
Former United States President Theodore Roosevelt is quoted as saying:
“In any moment of decision, the best thing you can do is the right thing, the next best thing is the wrong thing, and the worst thing you can do is nothing.”
A take-out in the Covid-19 context is that the decisions and actions taken (or not taken) by leaders will have a profound impact in shaping the outcomes. This is an important reminder that leaders need to take their moral and statutory obligations seriously for the preservation and wellbeing of a wide range of stakeholders.
Leadership of Influence
In the context of a failure of formal leadership onboard the ship, it is all the more remarkable that the sinking of the Oceanos did not result in the loss of a single life. On top of outstanding heroism and bravery, there are numerous examples of leadership of influence that saved the day. The entertainment crew, staff of the tour operator, Navy divers and passengers all went well beyond their positional authority. There is a clear theme of people stepping up, making decisions and then giving leadership direction, all with an overwhelming commitment to saving lives no matter what the personal cost.
This influence extends to organisations involved in the rescue effort. The South African Air Force mobilised with very little formal information being available and then embarked on their biggest air rescue effort, despite the helicopters not being ideal for the task and the pilots not having all the necessary training. Navy divers risked everything to save lives. All of this was outside of their usual sphere of duty but was essential in a disaster of this scale where regular resources were unable to respond.
Andrew Pike observes that Robin Boltman and Moss Hills as a lead guitarist and musician would not typically be regarded as leaders on a ship. “Nonetheless, they stepped into a vacuum of leadership, displayed initiative, courage and decisiveness and delivered the better part of 600 people to safety through their actions.”(A)
The role of 22 year old Navy seaman Paul Whiley was outstanding. He was “foisted into the biggest modern maritime drama in South African history, took his leadership cue and created order and calm where a recipe for disorder and panic awaited.”(A)
It is interesting that, despite this rapid emergence of leadership of influence, orderly systems were established for the evacuation effort that were adapted as circumstances changed.
In reflecting on lessons from the Oceanos, Andrew Pike notes that not everyone will step up to the leadership challenge, and stresses the importance of knowing you can trust:
“It is people who are willing to get their hands dirty, people who are willing to engage with a problem and deal with whatever is presented to them, who you can count on. Those who flee the scene, those who distance themselves from the action cannot be counted upon and it is important to distinguish between the two when deciding who will step up.”(A)
This gives much pause for reflection in the context of this uncertain and rapidly changing Covid-19 world. A core theme is allowing sufficient flexibility to be allowed for the organisation to survive, at times mobilising resources that are completely outside of the normal. In times of very rapid change, organisations may well find themselves needing to move quickly and with new leadership of influence emerging. It is important to regroup and assess chain of authority.
Anger and disappointment at the circumstances, together with perceived failure of those in positions of formal leadership, is not productive. Leaders of influence will rather focus on the things that they can control and will move to change the things that are within their sphere of influence.
Another inspiring theme that emerges is that of teamwork. While the formal leadership structures on board the ship may have failed, decisive and strong leadership was evident amongst other role players involved in the rescue effort, systems worked, and the combined effort was instrumental in the saving of lives.
In the early stages of the rescue, it was nearby ships that played a vital role in rescuing passengers and crew who had evacuated on lifeboats, as required by tradition and maritime convention. Outstanding formal leadership was evident in the South African Air Force, who played a vital role in the sea-to-land rescue effort. NSRI, maritime authorities and shipping agents mobilised, coordinated and assisted. Aside from coordinating rescue efforts on board the ship, Navy divers courageously rescued passengers from the water.
This team effort continued after the incident, where shipping agents worked tirelessly to track and trace every passenger to confirm that everyone had been safely accounted for. This was no small task as the manifest (list of passengers) had gone down with the ship, some passengers had not boarded due to the adverse weather, and those rescued returned to many different locations.
While each initiative undoubtedly saved lives, it is the coordinated response, the team effort, that saved the day and resulted in the miraculous outcome of not one life having been lost despite the most treacherous and demanding conditions in an isolated location.
In our present Covid-19 context, most individuals and businesses cannot survive on their own. A coordinated approach is required with members of the team and with external parties. In many instances, survival may require collaborative response beyond the boundaries that ordinarily have applied. A collaborative rather than individualistic approach is likely to do more to build long term organisational resilience. This seems particularly relevant in in the response to a pandemic where there is an urgent need to reboot the economy, but where we need to act together in the mitigation of risk to save lives.
The Oceanos rescue highlights the very best of what the human spirit has to offer. The accounts of bravery and heroism are breath-taking, all from a selfless commitment to saving human lives. A time of crisis can bring out the very best in human beings, showing extraordinary resilience to cope with adversity and disaster, all contributing to an incredible outcome.
At a wider level, there are accounts of extraordinary compassion to those who were rescued. The compassion of the crew of the cargo vessels that rescued survivors from the water is striking. “As with the Kaszuby II, the crew of the Nedlloyd Mauritius could not have been more helpful or hospitable, doing everything they could to make the survivors comfortable”(A). The compassion even extended to the Captain’s dog being rescued and ultimately reunited with the Captain, despite the dog having a reputation of being aggressive and not very well liked!
Andrew Pike reflects on how often South Africans of all descriptions, colours and creeds have pulled together to create a result that could never have happened without the collective spirit of giving and humanity. He gives credit to those who participated in the Oceanos rescue purely for humanitarian reasons. He gives fascinating insight when translating this to the business context:
“[U]ltimately it is about the culture of the organisation faced with a crisis. This was about the culture of South Africans when faced with a crisis. People simply mucked in because it was the right thing to do. The lesson is to get the culture right in an organisation, an industry, a country.”(A)
Management consultant and author Peter Drucker famously stated “culture eats strategy for breakfast”. This seems most appropriate to our present context. Organisations that are focused on what they do without knowing why they do it can find it very difficult to respond in a time of crisis. Decision-making processes will tend to be at the operational level and will not be able to respond to the rapid change in context.
On the other hand, organisations that understand at heart the reason why they exist, the passion that drives them, the unifying vision, purpose and goal, all bound together in common values, will demonstrate far more resilience in times of adversity. Decision-making becomes intuitive as either aligning with that common purpose or not. There will be robust debate around the decision to be made, but the organisation does not have to revisit at every turn the reason behind the decision. A common passion and commitment will motivate people to dig deep and will unlock the resilience needed to survive and look beyond the crisis.
The call to abandon ship
During these 11 weeks of lockdown I have been reflecting much on the theme of “abandoning ship”. What is the importance in a maritime sense and how does it translate to business?
In maritime terms, the call to abandon ship will be made when it is sinking. The officers and crew will prepare to evacuate the ship in an orderly fashion to ensure that the lives of passengers (if applicable) and crew are saved. In terms of maritime convention, consideration also needs to be given to the wider impact of the abandonment. For instance, oil tankers may cause extreme environmental damage.
As noted above, a startling feature of the Oceanos rescue is that the Captain never gave a formal instruction to abandon ship. In the case of the Costa Concordia, the call was given but very late in the day. Both incidents highlight the importance of giving the abandon ship command at the right time. If a ship is damaged but could potentially be towed to safety, it would be irresponsible to call abandon ship too early as this may present a greater danger to human life.
Conversely, leaving the call too late can significantly increase the risk, with catastrophic and tragic consequences. As water floods through the ship it will start to list, and movement becomes difficult for crew and passengers. The list will then start to hamper the evacuation as it becomes increasingly difficult to deploy lifeboats, as happened in both the Oceanos and Costa Concordia. Eventually the ship will take on so much water that it starts losing stability and it will capsize or sink, resulting in tragic loss of life.
There is an enormous responsibility on the Captain to have knowledge of the design of the ship and the impact of the damage, to be able to evaluate the risks, to receive accurate information, and to make risk adjusted responsible decisions. Within all of this uncertainty, the Captain needs give clear instructions to those in his or her command, enabling implementation of plans and protocols with the ultimate objective of saving lives.
It is fascinating to apply this to our understanding of business and leadership. I would equate the business to the “whole, being the physical ship, together with the intangibles and the lives on board. The ship may be equated to the physical infrastructure of the business, things such as offices, plant, machinery, perhaps even our model of doing business. But these physical aspects do not in themselves make a business. Most importantly, to have a business, we need to add people; employees and others in our network. There are then the intangibles, the things we cannot see or touch: the vision, brand, reputation and values, the things that give the business a unique identity that has value.
While there are some notable exceptions of businesses that will thrive through this Covid-19 pandemic, for many there is severe hardship brought through economic conditions, lockdown restrictions and social distancing. There will inevitably be some areas in which the business is under pressure. In our maritime analogy, this may be equated to taking on water. This could be in a financial sense where the business is not trading profitably, or where the balance sheet is under pressure. Employees could be struggling with different ways of working. Capacity could be constrained as a result of social distancing protocols or remote working from home.
In the routine course of operation, all ships will need to deal with the accumulation of water in the bilges from rain and from rough seas. The collected water needs to be pumped out otherwise the stability of the ship may be threatened. The bilges also need to be monitored for unusual rises in water that may indicate a leak.
In our business context, there is a level of water that can be taken on that is within the normal operational context and with which our systems and infrastructure can cope. For example, a business may have lost some money during the lockdown period, but is resourced by a strong balance sheet and can afford to absorb the impact. The systems of the business – in the maritime context the bilge pumps – have enough capacity to ensure that buoyancy and stability is retained. Although painful, the business is able to continue on course.
But in these unchartered waters that we now face there may be some unforeseen blows that will overwhelm the existing resources of the business. The ship may have suffered severe damage that has resulted in water being taken on to the level that the engines have failed but the watertight compartments are holding and the ship still has a level of stability. In this instance, a tug may tow the vessel to the safety of a harbour for repair.
In our business context this would equate to a serious setback in the business, but that is not at the level of being catastrophic. For example, it may be that the business was viable prior to the Covid-19 crisis but the loss of revenue during the lockdown has resulted in severe cash flow constraints, and that low demand is expected for the foreseeable future. Some outside assistance may help save the day. At an entry point, the Covid-19 relief measures may provide some support, such as the TERS UIF Benefits or loans under the Bank Guaranteed Loan Scheme. Further injection of capital from shareholders may boost the resilience of the balance sheet, or extension of bank facilities may be negotiated. Towards the end of this spectrum, a joint management / employee approach may be required, for example, for reduced pay or reduced working hours. A combination of these measures may give the business enough resilience to remain stable through this survival period. Tough and difficult decisions are required to restore resilience.
In the most extreme situation, the damage may be so severe that there the sinking of the ship becomes inevitable. In the case of the Oceanos, the extent of the damage, the age of the ship and a pipe that had been removed from the waste system made sinking an apparent certainty. Once sinking becomes inevitable, there is a need for courageous decisions to be made for the preservation of human life.
In our business context, this could equate to a business model that was already under pressure prior to the Covid-19 crisis. A business that was losing money pre-February 2020 was already taking on water, and once the crisis took hold the impact would be catastrophic. Another example is a business where the Covid-19 risk responses have radically changed the landscape of the sector, for example, businesses in the hospitality sector. A combination of legislation and risk averse behaviour make the conduct of business next to impossible.
In such instances, the equivalent of an “abandon ship” call may be a radical strategic decision that results in the saving of the business as a whole. For example, the business may be able to reinvent itself like some restaurants in the UK that have transitioned to grocery stores. Other businesses have transitioned to a virtual presence away from their traditional physical models. Seminars and conferences have rapidly transitioned to webinars and online events, some offering creative means for participation. “Pivot” is the new trending theme, representing a significant change in the business.
The timing of such a change becomes critical. Too early and the market may not be ready. But left too late the business may have used up valuable resources and may be overtaken by competitors or even new market entrants. A qualifier to this approach is that the business has sufficient solvency to enable such a decision to be taken. Investing further funds into a new venture when the business has already failed would simply compound the already catastrophic implications of the situation.
In the most extreme cases, the call to “abandon ship” may involve the literal closure or liquidation of a business. It is a sad reality that the longer a failing business is left to operate, the worse the pain will be for everyone concerned. Business owners and directors who have concerns over the ability of their businesses to meet ongoing obligations to suppliers and service providers will need to carefully evaluate the solvency and liquidity position and should obtain professional advice. Directors could well face personal liability for allowing a business to continue trading recklessly.
It is critical that these decisions are made responsibly and that they are not left too late. Although difficult, a well-timed “abandon ship” call could mitigate the negative impact on shareholders, employees, creditors and other stakeholders while there are still resources available to enable a responsible course of action. All of these decisions will impact profoundly on human lives, hopefully for the better in the long term.
There are many questions that emerge for leaders in this Covid-19 crisis: Are we prepared? What should our organisation look like? What have we learned that we want to hold onto? What do we need to change? What is the future of our organisation? What is our vision, our hope?
Andrew Pike questions what sort of leaders are needed in the face of a disaster?
“The answer seems to be skilled, decisive, courageous, visionary, creative, able to think outside the normal parameters, acting within their authority (both personal and delegated). But ultimately, every leader needs to be fully empowered to do whatever is necessary to deliver the organisation.”(A)
The above reflections have illustrated the importance of culture, passion, courageous leadership and common purpose for big goals. While a reactive approach is likely to “end in tears” as events overtake us, a proactive approach within a sphere of influence will have a profound impact in shaping the outcome to a crisis.
The words of the ancient Greek philosopher Epictetus sum this all up well:
“Every difficulty in life presents us with an opportunity to turn inward and to invoke our own submerged inner resources. The trials we endure can and should introduce us to our strengths. Prudent people look beyond the incident itself and seek to form the habit of putting it to good use. On the occasion of an accidental event, don’t just react in a haphazard fashion: Remember to turn inward and ask what resources you have for dealing with it. Dig deeply. You possess strengths you might not realize you have. Find the right one. Use it.”(D)
(A) Against All Odds, the Epic Story of the Oceanos Rescue, Andrew Pike, Jonathan Bell Publishers, 2019
(B) A Captains Responsibility by a Former Norwegian Cruise Lines Safety Manager and Ship Master, Captain William H. Doherty, Forbes January 2012
(C) Gender, Social Norms, and Survival in Maritime Disasters, Mikael Elinder and Oscar Erixson, Proceedings of the National Academy of Sciences of the United States of America, May 2012
(D) The Art of Living, the Classical Manual on Virtue, Happiness and Effectiveness, Epictetus, A New Interpretation by Sharon Lebell, Harper One