Moment of Decision

I am sure many of you have seen this cover photo which was circulating around the globe last month when the mega ship stuck at the Suez canal. The 200,000-ton container ship got diagonally stuck in the narrow but crucial global trade artery during a sandstorm on March 23. With such a striking photo of one tiny excavator vs one of the world largest container ships and gravity of the event, it is safe to assume that one of the future decisions for the canal authority would be the number of excavators to buy.

It was a major incident that was reportedly costing the global economy $400 million per hour with the consequences are still unfolding. It is likely going to be years before the legal issues get resolved between all parties. As someone who knows nothing about the technical details of navigating a large ship through canal, I thought we could discuss some broad lessons learned from a decision making perspective.

For decades, shipping lines have been making bigger and bigger vessels to accommodate the increasingly sophisticated global supply chain. The growth in ship size often makes economic sense since economics operate on a per-container basis. However, the bigger vessels can call on fewer ports and navigate through fewer tight waterways. They are also harder to fill, cost more to insure and pose a greater threat to supply chains when things go wrong, like the current event.

From a supply chain perspective, the incident highlights that breaking down in the weak link of the fragile supply chain can have significant implication. It is especially true for companies which rely on just-in-time shipping for operation efficiency as if the floating ships are their warehouse. Companies would have to make decisions between the chance of “something similar would never happen again” vs cost of extra inventory to avoid such unexpected events. 

From the perspective of over four hundred ships which stuck at both sides of canal, they had to make the decision between taking 14 extra days to go through African or hoping that the incident would be resolved quickly. In the end, it took only six days for the mega ship to be dislodged, but watching the tiny excavator, reported working 21 hrs a day, did not instill confidence for those who had made the decision to wait. I wonder how many of the ships had a pre-determined decision making framework for such events.

For the canal authority, it is safe to assume the short term focus was to do everything they could to safely get the ship out of the channel without causing further damage. Now that the canal is open, they would have to conduct a thorough root cause analysis to prevent similar incidents from occurring. Just saying that the wind and sandstorm weather condition “caused” the incident did not seem to be sufficient. Meanwhile, procuring a few more excavators might be a prudent thing to do.

From a personal perspective, I reflected on contextual leadership. During a crisis situation, everyone goes through the same event, yet everyone would see things from very different perspective. Different contexts call for different kinds of responses. Before addressing a situation, leaders need to recognize which context governs it—and tailor their actions accordingly. For leaders to be effective, they need to have the ability to see through complexity and find the clear direction or answer, ability to put the right resources and people in the right place at the right time. More importantly, they need to have the constant awareness of the different needs of the different stakeholders or the individuals. Quoting general Colin Powell, “Leadership is solving problems.”

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