Maersk hits cultural storms en route to digital destination

There shouldn’t be a happier ship than Denmark’s AP Moller-Maersk right now. The world’s largest container shipping company recently announced that it has ended its most profitable quarter in its history and is on track to achieve the highest profits of any Danish company in history this year .

But there are signs that things aren’t going so well internally. It appears that Maersk’s attempt to move from a container shipping company to a technology-driven end-to-end logistics provider is creating tensions.

Two weeks ago, those tensions came to light when a senior IT executive appeared to suggest that the ships carrying 20% ​​of global trade were no longer at the core of Maersk’s mission. The group “used to be an industrial company that had technology on [the] side, ”he said in an interview highlighted by the head office on social networks. “Now it’s a tech company where we have physical devices that we need to get around. “

A few other seemingly offhand comments from the software engineer about freight transportation (“It’s about more than just packing things into boxes and circling the earth”) sparked a mutiny in the streets. ranks.

“I’m so sorry, but I’m going to have to correct you,” wrote a veteran Maersk captain, who is also the employee representative on the board. “But we are NOT a technology company that ‘happens to’ operate ships,” he said in a LinkedIn post. The maritime activity contributed to 78% of the group’s turnover, he stressed. Without the 12,000 sailors in the group, there would be no Maersk, we conclude. The captain’s post has been met with almost universal praise from his supporters, many of whom work at Maersk.

The post was then edited to lessen criticism. But it was too late. The curtain had been raised.

It is nothing unusual for tensions to emerge when strategic changes are underway. And there are big changes going on at Maersk. After a century of transporting goods mainly by sea, Maersk is expanding to other modes of transporting goods and digitally connecting platforms.

Maersk’s IT manager was right when he said the company was moving the world’s largest devices into the so-called Internet of Things. Increasingly, supply chain logistics is about the flow and visibility of information, as well as the ability to quickly identify and resolve problems, no matter where the goods are.

How Maersk deals with the tensions arising from these changes could determine the success or failure of its transformation. “It’s not the strategy that is bad,” said Lars Jensen, managing director of the shipping consultancy firm Vespucci Maritime and author of a book on the Danish group. “It’s more in communication. . . How do you see yourself? What is the core business? Is it to move boxes or information? “

Four years ago, a study conducted by technology consultant Capgemini and digital analyst Brian Solis highlighted a clear difference in perceptions of digital transformation between business leaders and those in the field.

Some 85% of senior executives believed their organization encouraged digital transformation collaboration internally, but only 41% of employees agreed. While 71 percent of executives said discussions about new business initiatives using new technology were open to all employees, only 41 percent of those workers believed this to be true.

Maersk’s social media spat shows that the results are still relevant. “The fact that this has spilled over into the public domain is really very unusual at Maersk,” Jensen said. “It should be an internal discussion. But I suspect that there are people who feel like they are not being heard.

Navneet Kapoor, chief technology and information officer, insists that public debate is not a sign of disconnection from the company’s mission. “At the management level. . . we are very proud of our heritage and the fact that we have a huge network of assets, ”he told the Financial Times. May be. But somehow that message seems to have been lost in transmission down to the base, whether to the crew of Maersk’s 700 ships or to the digital side of the company.

To pretend that these tensions do not exist would be foolish. But both parties have to adapt. The truth is, Maersk’s core business is neither technology nor shipping. It’s both, and more. The only message that needs to be conveyed is that neither side alone will shape the future of Maersk. Neither will one prosper without the other.

peggy.hollinger@ft.com

James C. Tibbs