Management Talk

From loss to profit

In Kongsberg Maritime the Deck Machinery & Motion Control division (DMMC) has turned its operation from loss to profitability. In this interview EVP Lisa Edvardsen Haugan is sharing some thoughts about the process the division has been trough.   

“The Deck Machinery part of this division supplies deck equipment. That means everything from small anchor winches to large winch arrangements that can be used for several types of vessels, including fishing vessels, the merchant fleet, offshore vessels, tugs and the naval fleet. Motion Control supplies steering gears for a wide range of vessels. Our stabilisers help to secure cargo, stabilise naval vessels and helps ensure you have an enjoyable cruise voyage,” says Lisa Edvardsen Haugan.  

How would you describe the situation in this area when KONGSBERG acquired the operations from Rolls Royce Commercial Marine (RRCM)? 
“Historically, DMMC was one of the most profitable parts of RRCM, especially during the offshore boom. A lot of this was due to its strong position within offshore anchor-handling. In addition, we are recognised for our low-pressure hydraulic technology. Back when there was a high level of activity in the oil & gas industry, we focused strongly on what was then a profitable market, while other market segments received less attention. However, the dramatic fall in the oil price in 2014 and 2015 meant that newbuilding in the offshore segment came to a rather abrupt halt and DMMC was hit hard by this. When KONGSBERG came along in 2019, this was a loss-making entity, and something had to be done to turn the trend”. 

Cargo rail cranes have been developed to improve safety on deck, where the crew have to handle heavy moorings and deck cargo at sea. 

You came from KM’s finance operations and took over an operational division. How would you describe that transition and what challenges did you face as a manager?  
“In many ways, I didn’t feel that the transition was that big. As the head of finance, you work closely with all the divisions and get good and close insight into their operations. Irrespective of the entity and function, being a leader is mainly about mobilising people and ensuring everyone is working towards a common goal. The main job is to build and motivate a strong team that can complement each other”. 
How did you start the work of turning Deck Machinery & Motion Control around?   
“At first, it was about creating a common understanding and acknowledgement of the challenges we were facing. It became clear at an early stage that we had to adapt our workforce to the current level of activity and market prospects. In addition, we could not avoid implementing structural measures to gain insight and overview of the specific circumstances in each individual part of the business. We focused on quickly identifying where the ship was “leaking” and where we had to implement extra measures. So, we chose to start off by organising DMMC with emphasis on the organisation’s functions.  This gave us the needed insight and we could initiate a number of improvement activities that are still ongoing. Now we’re in a new growth phase, so we have chosen a slightly different way of organising the division”. 
Do you have any management principles that are important to you and which you have relied on in this work? 

“Our values mean a lot to me personally and I’m convinced they’re key elements of our culture", says Lisa Edvardsen Haugan.

“If I have to point out three things, they would be: clear goals, local freedom to act, and at the same time close leadership. In my experience, it is difficult to sit at the top and know what is right for each part of a large division.  Our organisation has incredibly skilled colleagues who usually know which measures work best in their area. However, it is important to be close in order to be able to set the right goals and, not least, challenge people a bit when necessary. At the same time, I get a lot of energy from continuing to understand and learn even more about all parts of the division. We have many employees who are extremely proud of their workplace and are very willing to share their knowledge and experience with me”. 
You have among other things placed emphasis on the company’s values in your communication with the division’s employees. Has this been positive? 
“Our values mean a lot to me personally and I’m convinced they’re key elements of our culture. That’s the reason I have used them a lot when communicating, and in my view these values help to create a common language and expectation of how we are to act as KONGSBERG ambassadors. In addition, I feel they help to join us together as an organisation across national boundaries”. 
 What were the measures taken that meant most to turn around the Deck Machinery & Motion Control division? 
“It was without a doubt the efforts made by all functions and departments in DMMC that mattered the most. There is no one unit alone that has created the improvements, these were due to a broad mobilisation. So, it’s not without reason that I like to say that this division consists of many heroes. I’m humbled by the efforts put in by all employees, especially since this organisation had been affected by many upheavals over the past 5-6 years. It has no doubt taken a lot for individuals to once again roll up their sleeves and put in the extra effort”. 
How would you describe the current situation in Deck Machinery & Motion Control? 

"I’m very optimistic on our behalf and think the next few years will be a very exciting journey”, says Lisa Edvardsen Haugan. 

“We’re very proud of the improvements we’ve managed to make in the past few years and, as Egil often reminds us, profitable operations provide new opportunities. We are now in a position where our profitability is acceptable, given our history, and when looking at new sales and the aftermarket together. However, our ambition is clearly to improve our profitability, especially in the new sales area, and we will actively work on the measures already implemented. This is about focusing on the customer and ensuring that we are always the preferred choice”. 
What are Deck Machinery & Motion Control’s future goals?  
“In addition to as efficient operations as possible, we will have a spotlight on growth. We see a number of ways to grow with our more standardised products towards merchant, navy and tugs. We are also experiencing increasing interest from the naval market for a wider range of our products than before. That’s very interesting and allows wider collaboration with a broader part of KONGSBERG. In addition, we have new concepts for growing markets such as aquaculture and offshore wind which I have great faith in and am looking forward to working on in the future. So, I’m very optimistic on our behalf and think the next few years will be a very exciting journey”.