Chairman of Danish shipping company Maersk and multinational engineering firm Siemens Jim Snabe recently gave a talk to Imperial College Business School students. While here, he sat down with us to discuss the "biggest business opportunity of his lifetime" and the key challenges facing future leaders
What does it mean to be an effective leader in today’s world?
I used to believe an effective leader is one that makes sure the results of the company stay in order and live up to the idea of shareholder value creation. Since then, I have come to realise the importance of the role business leaders play in creating a better future. If we are ambitious as leaders, I believe both objectives can be achieved.
In some of your talks, you have addressed your concern over deglobalisation – where do you think this trend has come from?
I have spoken about how lucky I was to graduate in 1989, the year the Berlin Wall fell. Suddenly you could do business in almost any part of the world. If you look back, globalisation has been an incredible value creator, lifting hundreds of millions of people out of poverty and creating opportunities in key areas such as trade and talent sharing.
Now, we’re seeing a reversal of this, with a general rise in political populism. One of the reasons for the deglobalisation trend is social media: it can be used to make superficial arguments. You could also argue that, in times of crisis such as COVID, we tend towards protecting ourselves and those nearest to us. But the best way to deal with crisis is to collaborate, which means more globalisation not less. If globalisation is reversed, the impact could be quite devastating – and the populist movement forgets to tell that side of the story.
Maersk has committed to zero carbon shipping by 2050 – do you believe other companies are doing enough to meet net zero targets?
It's interesting to note that many companies have committed to ambitious carbon neutrality targets. My concern, therefore, is not the lack of commitment, but the speed at which it’s happening.
The story of Maersk is intended to inspire business leaders to be more radical and courageous. It's not easy to sail a vessel without carbon emissions: if you tried to do it using electricity, the batteries would take up 60 per cent of the vessel’s capacity. When Maersk made a commitment to decarbonise shipping, we didn’t know how we were going to do it. There was no business case, no proven technology – it was a leap of faith, a conviction that if the world's largest shipping company did it, we could transform the entire industry at the speed necessary.
And when you have ambitious dreams, people become creative. Two years after we made the commitment, we had found the solution: Power-to-X. A year later, we ordered the first vessel and, suddenly, we were seven years ahead of a plan that seemed impossible only three years earlier.
Why do you think there are so many business leaders that need to be convinced to take action on sustainability?
Most people assume sustainable solutions are more costly. We talk about a green premium and it is true that, when you create new technologies, they are more expensive. But once you’re able to scale, the solutions become dramatically cheaper. Whoever first embarked on the fossil fuel journey earned a lot of money because it became the foundation of most value chains.
I see today as the sustainable version of that. We’re at a tipping point where wind and solar power are cheaper than the energy produced even by coal-fired power plants. Nevertheless, many still assume sustainability will be costly, whereas I think of it as the biggest business opportunity of my lifetime.
You have said the European Union has often been slow “in implementing its great strategies”. Why do you think that is?
Firstly, I think the reason the EU has been slow with this is the complexity of having to agree across all member states before implementing anything, and the power of individual states to slow things down. Secondly, the EU has a tendency to be rather bureaucratic and slow moving when it comes to implementing new policies.
However, I think the EU has a big opportunity compared to countries like the US and China, because, if I'm right in my assumption that the future will be about rapid innovation, then diversity becomes a competitive advantage. Small countries are faster than large countries and you need networks of diverse innovators to create significant and rapid impact. That is the definition of Europe: it’s very diverse and it’s the sum of small, connected, innovative countries.
If you could give today’s business school students one piece of advice, what would it be?
My main piece of advice is to be courageous. I think in this phase of radical change, there are risks and opportunities, and opportunities arise when leaders show courage.
My second piece of advice is to stay curious. The world is often led by people who believe they have all the answers, but what got us here will not get us where we need to be. We need to challenge assumptions and be curious about new solutions.
There's a George Bernard Shaw quote, which summarises this approach well: “There are those that look at things the way they are and ask 'why?', I dream of things that never were, and ask 'why not?'"
The people who ask “why not?” can change the world – and we need them to create a more sustainable and fairer future.
This article draws on a presentation given by Jim Snabe to students of Imperial College Business School.