The Top 5 Strategy Errors Made By Ports // LUMEC

June 28, 2016by Joanne Parker
  1. Not incorporating strategic plans as deliverables across the organisation;
  2. Not including relevant stakeholders in the development of the strategy;
  3. Too much of a focus on infrastructure over soft issues;
  4. Not getting buy-in from related government departments; and
  5. Not being flexible enough in planning scenarios.

…are the five most frequent strategy errors made by ports across the globe, according to Port Economics associates, Peter de Langen and Jonas Mendes.

South Africa’s port strategy is the responsibility of state owned entity, Transnet, and its port division, the National Ports Authority (NPA). The National Development Strategy is conducted every five years and results in the Port Development Plan (PDP), which is completed annually and has a planning horizon of 30 years. From my experience working with the NPA on their strategy in 2012/13, the common mistakes identified by de Langen and Mendes resonate with me to varying degrees.

The two most important mistakes made by Transnet and the NPA is using the strategy purely as an infrastructure development tool and excluding vital stakeholders from the process. The NPA is in the business of building port infrastructure, therefore, while all outcomes of the strategy were not infrastructure related, only those that were infrastructure related were able to be reflected in the Port Development Plan. The Port Development Plan is a set of maps and an investment plan. All other suggestions around policy and the environment fall away, not through prioritisation, but by the nature of the planning outcome, which is an engineering outcome. I believe that there are effective tools and measures in place in Transnet’s head office to incorporate environmental outcomes into deliverables but the two processes never meet in the strategic phase, which brings me to the next failure – that of not including vital stakeholders in the process.

No external stakeholders were included in the strategic development of the PDP, until the plan was completed and a roadshow was conducted. There is little accountability with regard to how the comments received from roadshows are included in the plans. Perhaps worse, was the lack of internal engagement on the strategy. Final plans were presented to the executive committee of NPA and then Transnet without buy-in being created as the executive was not included in the development of those plans. This leads to lack of implementation and duplication of efforts. The same can be said for Transnet’s plans being made in isolation of the NPA. The entity is not good at consultation, internally or externally.

Despite these mistakes, South Africa can be proud that it does not always fall into the trap of inflexible planning. The demand forecasting techniques developed by Transnet do include an enormous amount of flexibility and do account for external factors. Transnet’s project factory also verifies demand on a project by project basis. Furthermore, Transnet and its port division, NPA, have been able to attract and retain excellent staff who are committed and experienced. With the correct engagement processes, better internal synergies and tools for creating non-engineering deliverables, the National Development Strategy could be substantially improved.

Read the full article from Port Economics here.

Joanne Parker