Finance Monthly interview Sandra Antonovic, Chief Operating Officer at Reflex Marine. Ms Antonovic is responsible for global commercial development and strategic business positioning.
You have twenty years of experience working for multinational companies across a range of industries, but you are fairly new to the offshore industry. What made you decide to take a job in this sector?
A combination of factors, from family context to personal interest; but I think challenge was the deciding one. I was hired when the company was in a serious crisis, and the question “Can I turn this thing around and make it work” created a very positive trigger in my mind.
If you are focused on understanding the problem and the context around it – how was the problem created and why; if you are focused on solving the problem and if you find difficulties on the road stimulating rather than discouraging, I don’t think it matters what industry you are in. It is like being a film producer – you take the topic of the film and you run with it, you make the best production you can.
Starting to work in an industry you are not that familiar helps with a few other things – you keep going back to basics and you keep questioning everything, because you are not “settled in” and your mind doesn’t (yet) have that, sometimes dangerous, trait “Oh, I’ve done this a thousand times, I could do it in my sleep; I’ll just wing it.”
Being new makes you do your homework, it makes you look at things from different angles, it makes you come prepared. It also helps you think out of the box, have a fresh pair of eyes, see new opportunities and solutions and be unburdened with “historic context” both within your organization and elsewhere.
People may like it or they may hate it, but one thing is certain – they won’t be indifferent to it; and slowly but surely, the change will start happening.
You said you were hired when the company was going through a serious crisis. Interesting timing, some might say.
I have been on the Board of Reflex Marine since early 2014; but apart from a few annual meetings I wasn’t really involved in the business nor did I fully understand the huge impact internal context would have on the future of the company.
While there was a significant downturn in the oil and gas industry triggered by the incredible oil price drop, the crisis that hit Reflex Marine was mainly due to internal factors. Having had a fair number of successful years, having been on the market for over 20 years, having been based in the South West of UK, an area not much to do with offshore industry, and having had a team of very young, very local, internationally inexperienced people eventually caused reactive approach to business and the industry.
Being reactive in any industry and any line of business never really works out; and for a company like Reflex Marine, that prides itself on being innovative when it comes to crew transfer problem solving, product design and engineering, even marketing, being reactive was basically against the very core essence of the company.
How do you “fix” reactiveness? Can it be fixed?
Everything can be fixed if you really want to fix it. The first step in solving a problem is recognizing there is a problem. That was the most difficult and challenging part. Being new on the team, and saying, literally on your first day “You have a serious problem”. Even the most open-minded people might see you as a “disruption”.
How do you deal with that?
Understanding human behaviour and reactions helps you not take things personally, and stay focused on the job. Understanding that you need a team to succeed motivates you to find a way to work with people who may not like what you do, or may not understand your vision or strategy or even a short term plan. It’s a fine balance; but ultimately your responsibility is to the company, not individuals. You can easily get trapped in dealing with stubbornness and tantrums, or insecurities of team members. If you are to succeed you mustn’t deviate too much, and staying focused takes practice and experience.
How did you deal with insecurities people inevitably have?
The only thing you can do, as a manager, is create a platform where knowledge transfer can occur in an (almost) natural way. The rest is up to every person – they either want to learn, or they don’t. They either want to be the best version of themselves, or they don’t. It is up to each individual to make that determination. I believe people can make you think, and see things from a different angle; but when it comes down to motivation, no one can motivate you except yourself. The same way no one can make you happy but yourself.
The responsibility of a manager is to care for and about people, to create the best possible work environment and to create a platform for learning and growing. A bit like a parent who clothes you and feeds you and schools you, and may set some examples for you, but at the end of the day, you become a person you want to be (or you think you should be). Once people start realizing that they actually have the power to change their lives and / or careers, and the way they feel about work, magic things can happen (laughs).
You have a corporate finance background, yet at Reflex Marine your focus is on global commercial development and strategic business positioning. Was it difficult to adjust to this role?
No, not really. Having a corporate finance background helped me in many ways; particularly in understanding market shifts, geopolitical context and the impact of currency fluctuations. It was also invaluable in pricing strategy, growth forecasts, interpreting trends and understanding the long term potential, rather than getting trapped in daily (financial) noise.
You mentioned geopolitical context. How do you see the importance of understanding macroeconomic factors in market development and crisis management?
We live in a volatile world, and most industries are quite volatile. The offshore industry particularly so. You have to do your homework, you have to understand what things, other than simple supply and demand, may impact or are impacting the global market. You also need to understand regional and sub-regional particularities.
When you are trying to recover a distressed company, the most important thing is not to rush; but you also need to act quickly. Time is, more often than not, of essence. It sounds like a paradox, but it really isn’t.
You need to be able to stay calm, and not panic. Yes, the cashflow is pretty bad, the sales are recovering slower than you would want them too, people are resisting change and so on and so forth. You have to look at those things as noise, a chatter, and you need to block it out so that you can give yourself time and space to look at the big picture. The more experience you have, the easier it is to switch between looking at the big picture, and dealing with day-to-day issues.
Understanding even the basics of geopolitics, recent history and current affairs helps your ability to detach yourself from daily work life and have an overall view of threats and opportunities, weaknesses and strengths. Understanding even the basics of macroeconomics helps you connect the dots between trends and forecasts, and keeps reminding you everything moves in cycles. It also reminds you that you always need a plan B, and C and D.
With your corporate finance background, it would be fair to say you know more than just basic macroeconomics.
That would be a fair statement. (laughs) Macroeconomics is like a wide lens camera. If you are working on a recovery of an international company operating in every continent, it helps you with a global perspective. Furthermore, it is invaluable in understanding that everything is connected, and that the global market is very fluid between regions. You can’t just look at one country or one area, without looking at the global outline.
We had a very interesting situation in Reflex Marine – we were trying to recover the company; but at the same time we were trying to further develop existing markets, and also open up new sub-markets with new opportunities. It was a constant juggle of going back to basics; and looking at things from a very sophisticated perspective. I think we all learned a lot in the process. I also think that process should never end. We should keep examining things and comparing views and perspectives; we should keep getting deeper and deeper understanding of the market shifts and what triggers and drives them. Only then will we be able to say we are ready for the next crisis.
So you think there will be another crisis?
There is always another crisis, it is just a question of when. Maturing as a manager also means looking at every crisis as an opportunity to learn and change; rather than looking at it as an imposition or a difficulty. The crisis that hit Reflex Marine two years ago was probably the best thing that could have happened to us. It was difficult to see it then, but it is very clear now. It forced us to become a lean, proactive company, a team that keeps learning and a group of people that is striving to be better with each new day. Yes, we still have issues and problems, and nothing is ever perfect; but we keep moving forward and we keep growing. That’s a pretty good result in my book.
You mentioned that Reflex Marine became a lean company. Could you please elaborate on that.
The market conditions changed. While that change started long before the oil price drop, it became evident and emphasized during the last oil price crisis. The cost of oil production offshore has always been high so it comes as no surprise that oil operators and the industry’s supply chain generally made a lot of effort to reduce the time of exploration and production. What used to take two years, now takes eight months, and so on. For suppliers that meant only one thing – adapt, and do it fast. You have to reduce your lead time, your transit time, you have to lower the prices and you have to be available 24/7. Flexibility and responsiveness are the key ingredients.
Reflex Marine reduced the number of employees by 30%, but increased productivity and responsiveness by 50-60%. We have a much better understanding of the global markets and we are able to see and comprehend the fine layers of the industry. We moved from a company that operates from 9-5 in one time zone, to a company that operates almost 24/7 in all time zones. It doesn’t mean people don’t sleep; it just means we do things in a very different way than we used to. The focus is on the outside, on the market, on the client, and on our role in helping them solve their problems. The change in focus changed everything for us.
Where was the company’s focus before?
It was very internal, and when you do that for a long time, it can backfire in a very bad way. Too much of an internal focus can turn you into a company that debates and dwells, rather than focuses on solving problems.
How did the team respond to all these changes and shifts of how the company operates?
Different people reacted in a different way and that is normal. Not everyone can accept and adapt to change and disruption, even if they see that it will bring good things in the long run. About 15% left on their own, all quite senior people.
Did you ever find it discouraging, having managers leave?
No, I can’t say that I did. Others in the team may have, but I was very determined that nothing will destabilize our recovery, not even people leaving because they disagree with the new direction of the company.
That sounds very detached. Were you then and are you now?
You have to be detached, in a way, if you want to do what is the best for the company, not for (some) individuals. Your responsibility is to the company and the community around it – all its employees, its clients and suppliers. You can’t jeopardize that because of one person. It is not always an easy position to be in, but with years and experience it gets easier.
We touched a few times on a new market approach the company developed. Tell us a bit more about that.
The narrative became very important – the context – why did something happen, how did it happen, what caused it and so on. The company used to look at numbers only, revenue, expenses, manufacturing costs, overheads. Having a more corporate finance angle and approach the entire team started to appreciate the need and importance to have narratives accompanying every report, and to have an understanding of the context.
We focused on analysis, on market research, on understanding our weaknesses and on working hard to mitigate the risks they could have created. We became very bold in our thinking; and it helped with the general attitude and team’s confidence.
Our increased, more structured and more layered knowledge on the market conditions and on our own capabilities helped us become more realistic in recognizing and accepting the gap between the market potential and where we are at the moment. Seeing you’ve had 30% growth in revenue versus previous thing may lull you into feeling you made it; until you look at the market share figures that tell you that you are below 10% share of the market and that you still have a long way to go (and to grow). It puts things in perspective and keeps us focused. Compared to where we were two years ago, the dynamic in the company changed a lot, and became more positive, more focused on hard work, and more realistic.
You touched on SWOT briefly. What is the role of international agreements, regulations and bodies in understanding SWOT analytics and strategy planning?
International agreements, regulations and regulatory bodies can have quite a significant role in strategy planning and looking at SWOT analysis. One of the most recent examples is when Brazilian regulatory body for offshore operations changed the regulation on what types of carriers can be used to move people back and forth while working offshore. That change stipulates that people have to be seated, and we are one of two companies that manufactures personnel transfer carriers for seated passengers. Needless to say this change had and will have a huge impact on our strategy, from supply chain, manufacturing, post-sale approach, market communications and general focus.
Reflex Marine is a global company, doing business globally. How do currency fluctuations affect you?
Reflex Marine is a company that operates globally, but is registered in the UK, so the impact coming from currency fluctuations was very evident after the Brexit vote. We export a lot, thus the impact we’ve had has been a positive one, since Pound Sterling plummeted, and US dollar was fairly stable; but we are closely monitoring the currency market and adjusting our market approach when and if necessary.
How does this adjustment happen?
I would call it fine tuning, and it’s mainly adjusted through discounts. If the currency shift works for us, we offer higher discounts; if it doesn’t we are more careful with the discounts. That way the benefit from the currency fluctuations gets trickled down to the end client and it helps everyone.
First published in Finance Monthly, September 2017