N2 People Skills

Sunday, November 7, 2010

Superyacht ownership-hidden costs

Hidden costs of owning a Superyacht can come in an assortment of packages:

Crew Turnover, Accidents, Poor Charter Bookings, Non Return of Charterers, Insufficient or Poor Maintenance and Insufficient Training and Development of Crew. The Human Factor.

Owning any high value item normally means the cost of maintenance is relative to the cost of the initial purchase price. In the Oct issue of 'the Crew Report' there is an interesting article on 'PAINT PRESERVATION'. It notes that a full paint job can cost in the Millions of Euros.  As the cost of not maintaining something will normally be well above the savings that are gained by not doing the maintenance in the first place, it is (somewhat) surprising that while browsing at an International Boat Show I found so many examples of, hidden costs of ownership.

Viewing a scupper from the dock
The picture above shows signs of maintenance required, (this on a Yacht for sale and charter), and while this yacht had a refit three years ago, you have to ask, what else needs attention?  The picture  below (left) shows just a frayed warp, and while it may not be a hazard yet, what happens when the situation changes to needing that extra few pounds of hold before the line reaches its limits, and parts?
Frayed Spring line
Aft swim deck door
The picture below (right) shows a seal that might warrant a good look also, since in a following sea it would most lightly be underwater.

So while crews today are certified, technically trained and even have a certain amount of standard operating procedures to follow,  high turnover and little training in crew resource management ( human factor and human behavior, non-technical skills) have started to show in the Superyacht industry, in accidents, incidents, and places as these, missed maintenance. What ever the reason for missed maintenance, the pictures emphasizes the fact that invariably small slowly grows to big if not addressed. What others problems are there within, in interrelationships issues, safety and beyond is another question.

The commercial shipping industry has seen its fair share of poor maintenance and have made the link to the human factor and safety. Surprisingly, a little in front of us as we see them launch whole web sites focused on the Human Factor ('ALERT' is one). Books on the subject are also available that have examples of shipping accidents and how they relate to the human factor and how to try to stop them recurring, a small excerpt here  (pdf on Human factor in shipping)  might have the Superyacht owner thinking about their multi-million $ investment, and crew, a little differently.
Whether poor maintenance is owner/cost driven or it is lack of awareness on the crews part, it  is an easy trap to be get into. 'The Boiled Frog syndrome". If you start a frog in a pot of room temperature water,  slowly bring the water to boil, the heat relaxes the frog until he is drowsy, and then, too late, he is boiled! Whereas if you were to just drop him straight into a pot of boiling water, he will try to jump out of the pot. Humans as the frog, are geared towards sudden threats, not slow gradual ones. We wait, and then try to react.
Maladaptation is part of the human factor, as yachts have become increasingly more complex to run and more expensive to own, crews have been asked to do more with less, it has become a case of being in 'The Boiled Frog syndrome'.

While some larger yards are offering technical training for crew on systems and safety, high crew turnover can unfortunately negate the effectiveness of their efforts and expense. One Yard  told me that they have seen crew come and go even before the vessel has been launched, (nobody said it was going to be easy living and working together).
We have slowly warmed the water on crew and the systems they live in. Owners look to their crews and management companies to look after their safety and their investment, and while many do a great job, the ones that do not, (just as a bad apple), will have an affect on those that do (crew turnover).

It has become hard to see the trees for the forest, or the forest for the trees.  A small rust spot can grow into a larger breakdown of metal, a worn line can get worn and frayed until it breaks, a seal gets old, misaligned and not replaced,  because it has not leaked yet. A crew member gets fired because they get sick, leaving the remaining crew disgruntled, and less lightly to spot human error.

The Human Factor.
When a new crew is put together, each may well be the best in their field, but that means little if they fall apart before they have had the chance to come together, to function as the top class crew they were hired for, and are capable of being. The human factor is at the foundation of most financial investments, whether $13 or $50 or $100 million, an investment needs attention. The lack of training and development of non-technical skills (crew resource management),  is inattention to detail. When the price of a stock drops a few cents, the overall effect on a company or investment can be in the $Millions.

While no one intentionally sets out to commit an error, it is human error that can be missed and cause accidents, incidents and loss of value.
"The eye sees a great many things, but the average brain records very few of them"                                                                                      -Thomas Edison
Training and development in technical skills will gets you out to sea, but you need the non-technical skills to complete and balance your crew, so they can keep you, and your investment, safe, keep $ value and (ROI) of your Superyacht, and make sure the human factor stays out of the picture to negate those hidden costs.