Diderik Schnitler: high level of truthfulness and fairness towards the clients is a key to success
The Chairman of the Supervisory Board of the SRC Group is Diderik Schnitler, who has outstanding experience in global business management. We talked with him about the present and future of the SRC Group, his views on maritime industry in these turbulent times and much more.
Initial skepticism turned around
Diderik Schnitler’s was first introduced to SRC by a friend of his. “At first, I was rather skeptical.” As a leader of a shipbuilding company, he had come across many proposals from companies that had access to labor from former Eastern Bloc. However, quality and trustworthiness always became the main concern.
Despite his skepticism Schnitler agreed to meet with the board of SRC. He was impressed. The meeting went well, the members of the board left him with a good impression, and he found SRC to have the right tools to succeed in the ship repair and shipbuilding industry. Moreover, he found Tallinn to be quite accessible, as it was only a one-hour flight from Oslo.
The competitive edge
Schnitler considers SRC to have quite a few competitive advantages.
Firstly, at any given time the company can mobilize labor around the world. During his work in the oil industry, Schnitler often encountered lengthy negotiations about moving labor from one part of the world to another. In SRC mobilizing comes without discussion. “Mobilizing quickly, that’s a good competitive edge.”
Experience is also of importance. SRC already has the know-how on concluding quality labour contracts. Know-how means that promises are delivered, and quality is assured. Thus, quality and trustworthiness are no longer concerns.
Schnitler finds that knowledge of different languages is also an asset. “Many Estonians speak Russian, Finnish and English.” Additionally, Schnitler believes that Estonians understanding the Nordic business culture is an advantage.
Challenges of the marine industry
Despite SRC’s competitive edge, there are always challenges in the marine industry. According to Schnitler, in the upcoming decade, political pricing will be problematic.
He brings examples of states like Japan, South Korea, Spain, and Vietnam heavily subsidizing its domestic ship construction industry. “That’s a challenge you have to face in the shipbuilding industry – they don’t price the product according to the market.”
Quality is also an issue in the shipbuilding industry. Nevertheless, Schnitler is not worried about quality, when it comes to SRC, as over the years they have gained the know-how of how to obtain the best resources.
Schnitler explains that it is also important to know your market. You do not only need to know your, but also your competitors’ strengths. The right contacts are also of high importance — that is why it is SRC’s strategy to establish subsidiaries in different promising regions.
In the end it is important to deliver what you have promised. “You have to have people who have the right business ethics,” Schnitler says as he explains that only with the right business ethic can you carry out your agreements.
However, Schnitler admits:” Most importantly, you must also acknowledge your failures,” as apologizing and promising to compensate for future projects is part of the business.
Selecting right partners in business
When it comes to selecting right business partners, Diderik underlines the need to keep an eye especially on the heads of the companies, as well as the salespersons. He also emphasizes the importance of business partners being highly ethical. This would mean that if the job done does not meet the expectations of the customer, you must make up for it. The high level of truthfulness and fairness towards the clients is a key.
Besides personal qualities, technical understanding is important when choosing a partner, as Diderik points this out as the main problem they had with their initial partner in Norway.
Choosing business partners well is especially important for companies like SRC, which have rather slim balance sheets. This does not leave much room for failure. Maintaining a sufficiently large cash flow and equity is also a challenge when trying to survive the coronavirus crisis. Diderik has no such concerns with the Wilh. Wilhemsen Group he is also chairing. They have sufficient cash flow and equity to survive the crisis even if it takes two to three years to get back to normal business.
Impressed by SRC's work
Diderik believes in what he does. Indeed, he has multiple reasons to be proud of SRC’s work, one of the examples being when SRC delivered the Silja Europa project.
A small company like SRC managed to mobilize 1000 first class people with a timespan of only 3 weeks. Diderik does not hide that he was impressed by the SRC’s execution and keeping promises.
Diderik knows what it takes for a company to do that. He brings an example of his past when he was a chairman of one of the largest cruise vessel builders in the world, Kværner ASA (now only in Finland Mayer Turku, Rauma Marine Construction & Arctech Helsinki). The Finnish firm built a vessel called Crystal Symphony for a Japanese company Crystal Cruises, making a net 100 million dollars with the project. Later, the Japanese company lost a 100 million dollars when trying to build a sister vessel to Crystal Symphony themselves, as it had an engine failure during a voyage.
Japanese have not successfully managed to enter the cruise building business just yet, as cruise-ship building keeps being dominated by Europeans. Others that have tried to build cruise ships have thought of it as of building ships, which according to Diderik is wrong. One must think of building a cruise ship as of building a hotel. According to Diderik, when building a hotel, the right infrastructure of subcontractors remains crucial. He underlines his experience as his key strength, and he has all the right to do so. Building a cruise vessel requires a good network and plenty of experience.
Diderik Schnitler has extensive experience from Norwegian business and politics and has among other things been president and CEO of Saga Petroleum ASA, president of the Confederation of Norwegian Enterprise (NHO), president for Kværner Shipbuilding and Deputy Minister of Industry. Furthermore, he has been chair of more than ten listed and non-listed companies.
He also served as president of the Confederation of Norwegian Enterprise and is currently a fellow of the Norwegian Academy of Technological Sciences.
Since 2002 Schnitler is chairing the board of a global shipping company Wilh. Wilhelmsen Holding. He is also Chairman of the Supervisory Board in SRC Group AS.
Schnitler holds a Master of Science from Norwegian Technical University, Trondheim, Norway from 1970.