In her latest blog, Sarah Spivey, the managing director of Modulift, explains how to take the lessons of the past into a bright future.
Whether a company’s financial year runs from January to December, April to March or another 12-month period, one can’t escape that we’re approaching a time of reflection and contemplation. As 2015 draws to a close, everyone in the lifting industry—and many others—is approaching the last hurdle of the final lap of the year and looking forward to 2016.
Many (most) have had enough of this year. It will be remembered for not only hitting the oil and gas industry hard, but then kicking it a few more times as it lay there, winded. And then going back to boot it again. I heard recently that offshore industry in the UK alone has lost around 65,000 jobs since the beginning of last year. In the Gulf of Mexico, meanwhile, I read with interest about high profile companies like ConocoPhillips and Marathon Oil taking drastic action over assets and future exploration.
Caught by surprise
Despite all that, I’m optimistic about next year. True, many of today’s challenges will come with us over the crest but companies are now adapting to the lower oil price and our guard is up. That was the problem in Q1; we didn’t see it coming. At Modulift, we budget from January to December and this time last year I was very excited about the next 12 or so months. As early as February 2015 there was a sense of impending doom.
I think it was outdoor scribe Alfred Wainwright who said: “There's no such thing as bad weather, only unsuitable clothing.” I know what he means. The industry is prepared to weather the storm and, at Modulift, we’re going to dance in the rain.
My optimism is fuelled by camaraderie that I witnessed this year. In boom times, industry can become naive—even arrogant. We all have a tendency to focus on the clear path ahead and only consider our peers when we’re elbowing them out the way for a clear line of sight. Many take an autonomous approach. Yet, when a storm passes overhead the cloud covers us all. It’s been a pleasure to be part of the heavy lift industry in 2015 because we’ve all been prepared to support each other.
However, there is more we can do to ensure that we don’t get blown off course quite to the same extent that many did in the opening quarter. Some are still shipping water. The environment and safety are, of course, of paramount importance but I think industry and trade associations should challenge themselves to better equip manufacturers, end users and other stakeholders for years like this, by providing more intelligence and data so we can forecast more accurately and roll with the punches better.
Staying above water
Key to coming through the year and ensuring 2016 delivers the productivity and growth we expect of ourselves, is constant investment in our aggressive marketing strategy. As a marketeer, I implore fellow equipment manufacturers and service providers not to reduce visibility over insecurities about the future. Many have just submitted budgets to accounts and I hope every one of them has a big allocation of marketing spend. In fact, I hope it’s overflowing.
It’s a myth that reducing marketing costs makes a business more watertight in troubled times. Even if you have to protect a margin, take it from somewhere else. Removing a company or brand from a trade show, trade journal or other platform where end users and customers go to get their information and network, will only mean the recovery will be slower. Furthermore, now is the time to gain market share, where success will fuel business growth like no other accelerant.
I’d also urge businesses to look at how they might better diversify so the next time an unexpected slump comes, they have more irons in fires. As a specialist manufacturer of heavy lift below-the-hook equipment, there’s only so diverse we can become from a product standpoint, but even we can explore additional applications and industries that might not be so reliant on the strength of the oil and gas sector, for example.
I’m baffled that so many component makers restrict themselves to selling into one small, niche industry when their product has such diversification potential. With a bit of marketing savvy and some minor engineering, one can open up a whole new revenue stream and even a new division of a company. I wouldn’t want to patronise anyone with a lesson in basic economics, but if a company took the same level of business from the oil and gas sector but instead of that slice representing half of their revenue it made up only 20%, imagine how much easier this year would have been.
Consider that a low capacity hoist can be used on a manufacturing production line, in a clean room environment at a pharmaceutical facility, or behind the curtain of a theatre. Take a bow if you’ve successfully diversified your business of late. Ok, better do one thing brilliantly that a multitude of things averagely, but I don’t think it always has to be as clear cut as that. Engineers and marketeers should have these kind of conversations more frequently than I think they do at some companies. Make it a New Year’s resolution to connect your departments.
A gap in the market
Talking of new opportunities, it’ll be exciting to see how our new product, the Trunnion spreader beam, fares next year after successful launches at two major trade shows this month. The below-the-hook innovation was unveiled at the World Crane and Transport Summit in Amsterdam during the first week of November before a very different, UK audience saw the product at LEEA’s annual LiftEx show in Liverpool the following week. The summit put the product in front of users and buyers of cranes and transport equipment as well as manufacturers and distributors, while a more equipment- and component-centric crowd congregated in the northwest of England.
Audiences at both events only wondered why we hadn’t developed the Trunnion sooner, which is acknowledgement that there is indeed a gap in the market, as our research had suggested. In fact, we have already been asked to develop more sizes. Liam Botting, our new business development manager, who represented us at LiftEx, told me he has a number of leads to follow up—another hallmark of a successful product launch.
Unfortunately, due to the terrible events in France last week, we had to withdraw from the European Wind Energy Association event, which took place in Paris only days after the terror attacks in the city. Our thoughts are with all our French partners and indeed the entire country as we stand together in defiance at this challenging time.
Our next trade event will be the LEEA Lifting & Rigging Conference Middle East in Dubai on 14-15 December, where Anthony Culshaw, our senior design engineer and technical committee member at LEEA, will discuss the requirements and challenges of designing a lifting rig for use on a specific project. Anthony, an authority within the heavy lift industry, will specifically focus on how the aims and objectives of a project might affect the design of equipment.
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You can see the blog archive at Modulift.com/Blog