‘Never let a crisis go to waste’: How 3 CEOs helped their companies thrive in a pandemic
The COVID-19 pandemic has prompted different responses from company CEOs seeking to ensure their businesses survive. Keeping their employees safe has been the first priority, but beyond that, their task has involved understanding the situation, launching countermeasures, and trying to evolve ways of working to ensure their businesses can continue. We spoke to the chief executives of three major companies in three very different industries. In their responses to the crisis we found that Winston Churchill’s adage of “never let a crisis go to waste” was as relevant as ever, with businesses finding positives during the pandemic. Accelerate strategy Shipping giant AP Møller-Maersk embarked on a historic transformation in 2016 to become an integrated transport and logistics company—combining its shipping line, port operations, and freight forwarding businesses into a single entity. However, progress had been limited . The pandemic brought unprecedented challenges to Maersk’s customers who, faced with falling demand, had to manage their global supply networks as effectively as possible. They wanted better information across the supply chain and the ability to change outcomes while goods were in transit. These demands affirmed Maersk’s strategy to shift from being a port-to-port container transport company to an integrated, end-to-end logistics company, making use of digital technologies to provide the connectivity and visibility that customers required. Maersk’s customers turned to its blockchain-enabled supply chain platform TradeLens , where the number of transactions almost tripled from 70,000 a week in January 2020 to 194,000 a week in June. Transactions through Maersk.com increased by 20% to 25% between January and October 2020. Maersk’s CEO Soren Skou told us: “The investments we made in the last five years in digital capabilities came in very handy during COVID-19.” The pandemic accelerated Maersk’s technological transformation efforts, which led to new digital products and services while modernizing its customer interface, back-end infrastructure, and assets such as ships and terminals. Maersk also built expertise through acquisitions, purchasing warehousing and distribution company Performance Team , and customs management firm KGH Customs . Skou was able to apply what he’d learned from the financial crisis of 2008-09, when Maersk and its competitors fought for market share and ended up driving down freight rates. This time, Skou focused on profitability: cutting capacity by 20%, but filling the remaining vessels even as the pandemic caused shipping volumes to drop. The plunging price of oil also helped Maersk’s financial performance, and its earnings actually increased in the first three quarters of 2020 , despite near-paralysis of the global economy. Scale-up innovation Large companies are often seen as slow and trailing in innovation compared to smaller, more nimble competitors. Standard operating procedures mean they focus on developing “perfect” solutions, testing in pilot markets and proving the business case over a couple of years, before finally rolling out—by which time they have probably missed the boat. Mars Petcare, a global leader in pet food and pet health services, found that COVID-19 necessitated scaling up innovation Read More …