The MISE caucus
"Culture shock in Maersk Line" by Lars Jensen
Culture Shock in Maersk Line: From Entrepreneurs and Kings to Modern Efficiency
I have been thinking that capitalism may be understood as two things: the free exchange of goods and services, unharassed by government; and as certain patterns that follow from such an exchange. But if these patterns are in reality only tangentially connected to free exchange, or are only under certain conditions connected to it, then things may be mistaken for capitalism that really aren’t essential characteristics of the concept.
“Culture Shock in Marsk Line” is a self-published book by maritime business consultant Lars Jensen about cultural changes that happened at Maersk, at times the world’s largest shipping company, between ca. 2000 and 2010. The book describes the “old” Maersk culture as something extremely different from “normal” modern business culture today; so this culture may exemplify aspects or a “type” of capitalism rarely seen today and might be an example of the phenomenon mentioned above. To get the semantic housekeeping out of the way: Yes, Maersk Group encompasses more than Maersk Line. But since most parts of the group seem to have been culturally similar, according to the author, I’ll stick with just “Maersk” here.
This is tangential, but I have for a while perceived very specifically Maersk’s container shipping business as a quintessential symbol of capitalism. Endless freight trains transporting dozens (or is it hundreds?) of containers always feel a bit like conquering tanks rolling through the streets of a vanquished enemy capital - except that the conqueror in this case is global capitalism and the (correct) ideology that supports it. And I doubt there has ever been a more heroic company logo than the Maersk star which kiiiind of implies divine intervention in the company’s favor. (The story is that the founding Maersk patriarch in ca. 1900 saw a star rise just after praying for his wife’s recovery from illness.)
So it’s quite fascinating to see how this major company was run very differently from most capitalist companies today.
Lars Jensen describes the “old” Marsk culture as something which I am inclined to call an exciting mess. Which also means there were some things about this culture which many people today would consider “bad”.
To begin with, old Maersk was clearly hierarchical to the point of patriarchal - in the original sense, where the word of Arnold Maersk Mc-Kinney Moeller was basically law; and in the modern sense that management was almost totally male and Danish. (Not by design, but this also wasn’t really seen as bad.) The culture was also demanding; Jensen describes repeatedly what I take to have been a typical situation: being told, on very short notice, to relocate to a distant and not necessarily politically stable country; and this basically being an order which to refuse would have been a serious norm violation. I’m guessing that would also have been the only kind of “remote work” practiced in the company. Add to that long hours for only ok pay.
In its hiring and training of employees the company - intentionally! - emphasized character traits that might today be called “problematic”. First, Maersk did usually not get its management trainees from university; instead, it ran its own apprenticeship program (“MISE”) for young people who usually only held high school diplomas. In picking candidates they specifically selected for applicants with very high assertiveness - which they called “factor A”, and which I take to be logically identical to: near zero agreeableness. Factor B was very high extraversion; factor C went a bit off script from the usual Big Five psychometrics as “very low patience” and, finally, factor D was about how obedient to rules and/or processes a candidate was. One may be relieved to learn that Maersk wasn’t exclusively going for anarchists here; instead they wanted management candidates with a moderate, neither super high nor super low, rule and process obedience. This is a bit “between the lines”, but one implication I read here was: hiring people who wouldn’t be corrupt out of their own initiative, but if they happened to be posted to a deeply corrupt country, and a government official seemed to be causing weird and inexplicable problems, then..... though of course the D factor could also just mean: wanting things to go as planned, but being ok if they didn’t.
While these were basically hiring criteria, Mr Jensen points out, these values permeated the organization generally. One entertaing example of which was people being told to “get their D under control” when they were (perceived to be) too obsessive about details.
Then there were also things about old Maersk that were unambiguously praiseworthy. To start with the obvious: In the 1930s and '40s the company was reliably anti-Nazi (in the term's original sense); during the German occupation of Denmark the patriarch, Arnold Maersk Mc-Kinney Moeller, moved himself and the entire company to the US, giving out orders to the global Maersk fleet to disregard orders coming from the occupied HQ in Copenhagen. (Having at one point been the center of the business, US operations went on to retain a high degree of independence after WW2.)
Some of the “problematic” traits of the old culture also seem to have effectively cancelled each other out: everyone being super assertive, decision-making became actually quite consensual - I guess no matter how assertive you are, if so is everybody else, you better tread lightly. And by the time everybody agreed on an issue it became hard even for top leadership to disregard such “suggestions”. (To the point were that became a problem; people on the outside did sometimes perceive Maersk personnel as difficult, though.)
Loyalty inside the company, both employee-to-employee as well as employees-to-management, was off the charts high. People rarely quit Maersk; and the myth that you would never be fired before stealing money from the company was, fascinatingly, mostly not a myth! Mid-level managers, especially running outposts in distant countries, were given insane amounts of freedom to run their area basically how they liked. Invent new products and services? Fine. Establish unrelated side ventures? Ok. Fail at side ventures? Ok, if you can explain your rationale. Run your own Maersk website? No problem. Use wrong brand colors and logos? Well, you might be asked to correct that - eventually.
And finally: Old Maersk was, in some weird contradiction to all the other stuff... I guess the word is: humble. They implausibly and massively understated the size and carrying capacity of their own fleet. They took action fairly early on, if Mr Jensen is to be believed, to reduce the environmental impact of their business, even when that was not required by law - and then kept this a secret. (!) This sort of stuff just makes no sense at all by modern business standards - but: it was a different culture, I guess.
This was at the time already a major global enterprise well on its way to dominating the global shipping industry. And they were generally believed to deserve it! The standard of service, even if employees were a bit rough around the edges, was considered to be among the best, if not the best, period, in the industry.
In summary: It was really hard to get in, it was hard work in a patriarchal environment, you got world class training, you could do what you liked (if it made money, or if you could justify failing), your pay would only be okay, but your raises automatic, you could always get help, you would never be fired and there were non-PC jokes. It was authoritarian anarchism all around. Basically one big, slightly dysfunctional family with a dominant father at the top who was unfailingly loyal to his no-good sons (and the occasional daughter) who were running around the world, building the best shipping company there ever was.
In the book, Mr Jensen and many of his interviewees regularly come back to the term “family”; because you would have to work pretty hard to get fired; you could always get help from your colleagues; and it was quite clear who the father figure was. Also, your colleagues were most of your social circle, so there may have been a degree of dependence, to be a bit less charitable. And looking at job offers outside of Maersk would probably have been considered treason.
But, going beyond Jensen, some terms other than “family” also come to mind.
First, maybe a bit obviously, “start-up”. The following saying was very popular inside Maersk, but is probably going to sound familiar: “It is better to ask for forgiveness than permission”. If you had asked me I would have guessed that this saying was invented ca. 2022, probably by Sam Bankman-Fried. But, according to Mr Jensen, it was common inside Maersk at least by the 1990s - I am guessing earlier. Country managers inside Maersk were, to use the book's subtitle, “entrepreneurs and kings” who had near total liberty to try out new business models and were forgiven if those failed - assuming they had had good reasons for trying in the first place. This makes Maersk, the conglomerate, look a bit like a venture capital fund.
If that is kind of a weird word to describe a then already decades old company, here is another one: “military”. People, young men, mostly, were hired with only high school diplomas. At the time in Denmark that meant: right out of mandatory military service. So they were probably prepared for a culture where orders were orders and colleagues were (kind of) brothers. Though I’m guessing sudden deployment to an instable foreign country was a lot more common inside Maersk than in the Danish armed forces. I would even consider the massive freedom given to country managers to be a bit military-like. This freedom was established originally before there were reliable means of communication between HQ and foreign outposts. So local leaders there were given objectives, basically, but left to their own devices in how to achieve those. I couldn’t help but be reminded of “mission command” here. Quoting von Moltke (via Tetlock):
“War cannot be conducted from the green table. [...] Frequent and rapid decisions can be shaped only on the spot according to estimates of local conditions.”
And having never served in the military, I think the sense of humor may have been similar: When in the early 2000s Arnold Maersk Mc-Kinney Moeller titled an austerity program “rope the sails” this went viral inside Maersk as “rape the seals”, with criticism of austerity being framed as opposition to seal-raping
So, why did it end?
Why did it come about in the first place? As I read it, the old Maersk culture was build on certain foundations that maybe seemed obvious and eternal, like properties of the universe, but weren’t:
1. Very high growth of the global shipping industry
2. No reliable internet (or even phone access) in many places
3. Culture or society “as a whole” wasn't totally contradictory to the old company culture
4. Perhaps some other points?
Almost no one in Maersk ever was fired because any over-hiring would be automatically fixed by massive growth in the shipping industry as a whole. When globalization slowed down, or maybe was mostly “completed”, by the early 2000s, it became clear pretty quickly that Maersk was overstaffed. Jensen retells the following scene in the book:
“By mid-2007, the StreamLINE group presents a working hypothesis to the executive team. The hypothesis includes a conclusion that at least 3000 employees have to be fired. A brief silence erupts in the room, whereupon Jess Soderberg concludes that this is then what [will] have to be done. And with this decision taken, Maersk Line embarks on a journey into new territory.”
One amazing thing is that this wasn’t even that controversial inside Maersk. The assertive and impatient employees mostly agreed that hard decisions had to be taken. (Though many were unhappy about how things went down in the aftermath.)
But, making these hard decisions, management basically reneged on the “total and unwaivering loyalty” part towards the employees - which eroded employee loyalty to the company. And once lots of people had been fired, people remaing at Maersk suddenly had (more of) a social circle outside the company to point out better opportunities to them.
At the same time, means of communication to distant countries were improving, reducing the need to let country managers run wild there.
And finally, Danish (or: Western) culture as a whole was changing in such ways as to make the old Maersk culture, or at least many aspects of it, seem outdated and maybe even slightly “wrong”. In part from a, let’s call it “left wing/social justice”, perspective that wouldn't appreciate the demands placed on employees by old Maersk; but also from a “right wing/MBA perspective” that would never accept the freedoms given to them.
I guess there were other reasons too, and in detail the changes stemming from these fundamental shifts took several years, varying strategy definitions, the introduction of “real” KPIs and McKinsey engagements to work through. But I think those 3 things look like the root causes.
Book review: actually reviewing the book
This is a good book. It’s a good thing Lars Jensen wrote it. It’s self-published in the best sense, in that such a book, although interesting and enlightening, would probably never have found a “traditional” publisher. I guess I’ll have more to say about my high regard for self-published books in the future. One does wish Mr Jensen had run a spell check on the manuscript, or been aware (or cared) that Times New Roman and Calibri are different type faces. More charitably one might say he had his D under tight control and did not let it impede his getting this book out.
So what does it all mean?
Having no conscious connection to the global shipping industry at all, apart from my severe and intensifying addiction to online shopping, this book left me with some questions. But perhaps interesting questions:
1. If Mr Jensen hadn’t written this book, much of this history would have been lost, or at best only vaguely remembered in anecdotal form. How many interesting societal and business changes have been lost because nobody wrote them down? I’m guessing most.
2. Are MBAs and trade union / left-wing social activists more alike than is generally appreciated? Both look at employer-employee-relations as a purely transactional exchange which to get as much as possible out of for one’s own side. Anything more “meaningful”, for lack of a better word, would probably be seen as a ruse by the other side to screw you over.
3. Are start-ups and military units more alike than is generally appreciated? Both are “survival communities” in that failure can lead to bad things for everyone (more so in the military, of course.) Consequently, everbody matters for everybody’s survival, and that can certainly lead to deep feelings of brotherhood. But it might also lead to people being unceremoniously and perhaps cruelly thrown out if they’re perceived to no longer be up to the task. I was reminded here both of certain war stories from military podcasts and of anecdotes about Elon Musk firing engineers who had sacrificed years of their life for his companies after just a few minutes of a conversation gone badly. I guess we could find more parallels if we went looking. In the meantime: speed, intensity and violence of action; then move fast and break things. (Then again, Maersk did not fire quickly, so maybe “family” is the better term after all?)
4. “Mission command” seems to dominate in successful armies today, but will this last? If Maersk country managers lost much of their freedom because email became reliable, might exponentilly increased data collection and analysis on the battlefield do the same for frontline commanders?
5. How could a succesful capitalist business be organized like this? When does the market reward a company culture like old Maersk’s? It’s not company size, it seems, Maersk being big in the 1980s already. Perhaps, old Maersk culture depending on growth, it was the great stagnation that killed it?
6. Or did modern business culture, with faceless MBA types throwing out the “entrepreneurs and kings” cause the great stagnation?
7. Is this all an example of Robin Hanson’s fear that cultures are all becoming alike?
8. If we’re concerned about woke indoctrination in colleges, could or should large companies re-invent a kind of MISE program? Target members of the military for recruitment?
9. Do we need to think more about pay other than money? The “pay” of having an ersatz-family, of knowing you’re one of the best in the world at your job, of being much more cosmopolitan than the people you grew up with? I guess economists measure this... but do most people care? I don’t think there are national statistics on the strength of social ties to your colleagues.
10. By the way: were the original Maersks, the men who founded the company, deeply religious protestants, by any chance? The “god saved my wife”-logo really has some strong Max-Weber-protestant-capitalism-energy, I think. Apart from massive amounts of swagger.
The other thing I keep thinking back to is this thing Connie Sachs said in “Tinker, Tailor, Soldier, Spy” which I’ll misquote here: “What does it all matter... old Maersk is gone anyway...”
Now if anyone has a good history of MSC, please let me know...
