When AP Moller-Maersk came under cyber attack this year, chief executive Soren Skou was presented with a very basic problem: how to contact anyone.
The June attack was so devastating that the Danish conglomerate shut down all its IT systems. “It was frankly quite a shocking experience,” says Mr Skou. “Your email goes down, all your address system. We ended up having to use WhatsApp on our private phones.”
The attack hit Maersk hard. Its container ships stood still at sea and its 76 port terminals around the world ground to a halt. The world’s biggest carrier of seaborne freight — transporting about 15 per cent of all global trade by containers — will detail the financial impact of the attacks at its first-half results on Wednesday.
Analysts expect a hit of anywhere between $50m and $450m. The group’s sales were $35bn in 2016, with underlying profits of $700m.
Mr Skou, a 52-year-old Dane, has been in the action-packed chief executive job for only 12 months. He says nothing suggests that Maersk was specifically targeted. The “ Petya” malware attack came through a piece of software all companies use to file their tax returns in Ukraine. Some of the world’s largest multinationals, including Mondelez, Reckitt Benckiser and WPP, were also hit.
Still, it was a huge trial for the manager who has spent 34 years working for the group throughout his career and in a variety of operational roles in its shipping businesses. “Most business problems, you will have an intuitive idea on what to do. But with this and my skills, I had no intuitive idea on how to move forward.”
Mr Skou was “at a loss”, but he decided to do three things quickly. The first: “I got deep in.” He participated in all crisis calls and meetings. “To begin with, I was just trying to find out what was happening. It was important to be visible, and take some decisions,” he says. Maersk is a conglomerate, so IT workers needed to know whether to get a system working for its oil business or container shipping line first.
Next, he focused on internal and external communication. Maersk sent out daily updates detailing which ports were open and closed; which booking systems were running and more. It also constructed a makeshift booking service from scratch.
Finally, Mr Skou says he made sure frontline staff in the 130 countries it operates in were able to “do what you think is right to serve the customer — don’t wait for the HQ, we’ll accept the cost”.
He says that he has learnt there is no way to prevent an attack. But in future, the company must “isolate an attack quicker and restore systems quicker”. He adds that Maersk will now approach its annual risk management exercises in a different spirit. “Until you have experienced something like this — people call them ‘black swan’ events — you don’t realise just what can happen, just how serious it can be.”
Now, more than a month later, Mr Skou seems as content as he can be with the aftermath. Few containers were mis-shipped, customers offered help, and staff “rallied together as one global team”, according to the chief executive.
That last point may be vital for Mr Skou as the attack came as Maersk undergoes one of the biggest transformations in its 113-year history. Just after he became chief executive last summer, he announced plans to break up the conglomerate, selling off its oil and energy businesses to turn the group into an integrated transport and logistics group.
“We have had a lot on our plate,” says Mr Skou simply, in an interview in his office looking out on the former naval station of Copenhagen with a submarine on the far bank.
Mr Skou’s plan for Maersk is about shrinking the company to grow — a “counterintuitive” approach, he concedes. Maersk’s revenues have stagnated since the global financial crisis and the solution has been to jettison what has often been its main provider of profits, the oil business.
In its place, Mr Skou has already placed his bet on consolidation in the shipping industry by buying Hamburg Süd, a German operator with a strong presence in Latin America. Maersk’s last big acquisition — of P&O Nedlloyd in 2006 — was hampered by botched integration. Mr Skou says they unnerved P&O employees by bringing everybody together quickly. But he says Maersk has learnt. The company will integrate Hamburg Süd into its networks but keep the brand separate and with its own headquarters.
His real push is in bringing together the container shipping, port terminals, and freight forwarding businesses so as to make it “as simple to send a container from one end of the world to the other as it is to send a parcel with FedEx or UPS”. That requires quite a cultural shift in a group where independence was previously prized.
But the potential benefits are big: Mr Skou says return on invested capital could be improved by two percentage points through synergies.
Another priority is to digitalise the group. “It is pretty messy,” Mr Skou says cheerfully. Unlike most businesses selling to consumers who offer few possibilities to change much, almost everything is up for negotiation between Maersk and its business customers — from delivery time, destination, cost, speed, and so on. “It’s easy to talk about digitalising things; it’s quite difficult to do in a B2B environment. It’s hard to digitalise that complexity,” Mr Skou says.
One thing that is ordered is Mr Skou’s desk. There is just a single sheet of paper on it, testament to a chief executive who likes to keep on top of things. “I don’t do mess well,” he says.
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