Klavs Valskov pulls a 180˚ on Internal Communication at Maersk Line

CASE STUDYDelivering change across Malayered organizationDeveloping a communication plan around change that could resultin companywide job losses is perhaps the hardest thing InternalCommunicators have to do. <strong>Klavs</strong> <strong>Valskov</strong> explains how he and his teamnavigated this turbulent time.In 2008, Maersk Line, the global shipping company,embarked on an ambitious turnaround.The entire 50-year old container industry had cometo a breaking point. For a sector that enables global freetrade, shipping itself had ironically become a closed shop,with only a handful of major players and accusations ofcartelization. With few competitive pressures, the industryhad stagnated and its internal working culture by the early2000s had become locked in the past. The company had tobe modernized and adapt to the times.Shipping might grease the wheels of capitalism, butits internal operating model had remained resolutelyindustrial. Across internal hierarchies at Maersk Linespanning dozens of organizational layers, a militaristic“command and control” management structure wasslowing down decision-making. Under little competitivethreat, shipping companies had become insular, selfregardingand inefficient.Customers were certainly less than satisfied with theresulting service they received, including late arrivals(50% of containers missed their projected ETA), wronginvoices (60% annually were being queried), endlesslylong booking times (up to three weeks of negotiations),few e-booking options, invisible pricing, bewilderingcomplexity of processes, transit documentation thatcould run into thousands of pages and countless otherinefficiencies that needed to be rooted out and rectified.The impact was beginning to show – from 1997–2007,Maersk Line had grown five times in size throughacquisitions. But although trade volume had grown, profithad not. Something had to be done.The structural challengeAt the start of 2008, a high profile global change program,streamLINE, was launched to simplify organizationallayers and structures in Maersk Line, standardizeprocesses, implement sales tools/pipelines, rework theentire financial reporting (SAP) system and, essentially,cut costs everywhere. [See below for the poster releasedby Internal Communication at the start of the program]It began with redundancies for 8,000 of the 33,000-strongHow streamLINEwillleadus2tothenewMaersk LineMaking thestreamLINE 1strategyWe mustreduce costsCustomers just wantguaranteed space,reliable schedules,accurate deliverydates and a good priceWe need to have asimpler businessSet sailI’m still gettingmy head aroundthese newprocessesI miss my friends…I wishBob still worked herestreamLINEMA RSKKPI’s and performancemanagement put pressureon me. I’m not sure I like itIt’s all about myperformance...I thinkI’m not sure whatmy new managerexpects of me…3 The perfect stormstreamLINEMA RSKMaersk Line is the global containerized division of the AP Moller –Maersk Group, dedicated to delivering reliable ocean transportationservices. It has operations in 125 countries and employs around 25,000people, including seafarers.I thought streamLINEfinished with there-organisation in April.Now it seems we’rejust startingThis feels likea differentcompany nowWe’re still nenough monstrategy re16 scm April 2012