Sailing in a fog on guard for disruption 

By Christina Villefrance Moeller, TalesOfLeading

I wouldn’t be surprised if CEO of Maersk feel it’s like sailing in a fog. At least he admit openly, that he don’t know what’s going to happen. Low oil prices undermines the oil business making it less profitable to invest in surfacing oil from the North Sea. The shipping business on the contrary would be expected to benefit from the low oil prices while it lower their costs. These two complementary business units has helped Maersk through many troubled waters for decades. However, now Maersk’s shipping business is simultaneously affected by the downturn in global markets with too many offering transport of a declining amount of goods. How can the CEO handle the fear of disruption?

DSC_0037 (1)Good times follow bad times

Global trends go up and down, good times will be back again and so will oil prices. Or will they? Maybe that’s what concerns Maersk’s CEO. What if oil prices never will go up again? Prices might return to a slightly higher level than right now. But at what level? Has the North Sea oil adventure peaked as a mature business making long term investments less profitable? Alternative energy sources like wind turbines and solar-panels cover an increasing part of our need for energy. Even though electric cars still is a minor factor for decreasing oil demand, it will probably not stay like that. The benefits of low oil prices for ordinary consumers are considerable. I can heat my house with cheap with natural gas (price is linked to oil prices) and electricity from solar-panels on my roof. I can be lucky to buy diesel for my car for less than 7 DKR a liter and get cheap flight tickets for my vacation. However, the consequences for those working at oil sub contractors in Esbjerg might not consider it that advantageous. With these changes in customer demand, where does that put Maersk’s oil business in the future?

Shipping goods for distributed manufacturing

It could be more likely, that the shipping business found it’s way back into profitability. Consumers like me increase my internet purchases, which will be transported from where ever in the world it’s profitable to manufacture. If Asia becomes to expensive manufacturing might find opportunities in Africa. That’s not a problem for Maersk. That’s just a question of redirecting shipping routes. What could change the business for Maersk is manufacturers investments in fully automated Smart factories restoring local manufacturing in the Western  World. Also Do-it-yourself (DIY) with 3D printing could distribute manufacturing to smaller entities and reduce the need for large sea shipments. Then what opportunities and risks will that raise for Maersk?

Working your way out of the fog

For his organization to solve their problems and find ways out of the fog, CEO of Maersk will need each individual manager and employee to concentrate on their assignments. How can they do that if they fear not meeting their objectives? What will happen if short term focus increase rivalry and scapegoating? Will it be possible to have constructive relationships across functions? How can a CEO prevent the pressure for results to diffuse fear out in the organization? One element is his own ability (mental strength) to direct his attention on his own as well as others emotions and have a realistic sense of what’s going on in his group of directors. Because if the group of directors are not collaborating on the same primary task, then the rest of the organization is likely to stay inside each silo. Another element for the CEO to consider is how he (in collaborations with his group of directors) can organize a containing (Isaacs 1993) structure for groups of diverse employees to work on designated assignments all contributing to clarify possible business opportunities as well as countermeasures to adjust organizational capabilities.

Questions for you:

  • What possible disruption do your business face?
  • How do you clarify opportunities and risks?
  • How do you make sure the organization work constructively and avoid irrational behavior?

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