The Tipping Slope. (Episode 55)

Interview with Jacob Sterling, Head of Technical Innovation at A.P. Moller – Maersk.

 

Right now the world of business is going through one of the most fundamental tipping points we have ever seen. This text is about what comes after a tipping point has tipped.

But let’s start with meeting the man who triggered this text. Meet Jacob Sterling.

Jacob Sterling has been passionate about creating a sustainable world since he, as a 13-year-old, wrote a letter to the editor in his local newspaper. He then studied to be a biologist, and has worked passionately and tirelessly in places like WWF, on the board of Sustainable Shipping Initiative, and as Head of Climate and Environment at Maersk Line over the last 25 years. His mission: a more environmentally and sustainable world. He is now Head of Technical Innovation at A.P. Moller – Maersk. A.P. Moller – Maersk has 80.000 employees and operate in 130 countries. Maersk has been the largest container shipping line and vessel operator in the world since 1996 – ie for a quarter of a century.

So what does Maersk, or Jacob Sterling, have to do with tipping points and tipping slopes? Because one of the biggest tipping points, and the steepest tipping slopes we have ever encountered is the change to a sustainable world of business.

Jacob is the first to admit that for most of his 25 year career fighting for his mission of sustainability has been a lonely and unthankful uphill journey. He even quit and took a “normal commercial job” for a while, as all the work on trying to turn the world into a more sustainable path just seemed fruitless.

And then something happened.

A Tipping Point.

“About two years ago everything changed”, Jacob said full of energy. “Suddenly the world of business got it.”

Now let’s be clear, just like with digital transformation it’s hard to put an exact date on when a tipping points happens for such a huge thing as humanity embracing a sustainable mindset. Was the tipping point for the Internet 1995? 1998? 2000? The launch of Google? The rapid growth of Twitter and Facebook? Personally I would say 1998. At least in Sweden where I was living at the time. Suddenly “everyone” wanted to understand the Internet and talked about how it could change business.

In the same way we can discuss when the “sustainable revolution” had its tipping point. Was it the creation of Greenpeace? Al Gore and his “Inconvenient Truth”? The Paris Agreement? The UN Sustainability Goals? Greta Thunberg?

As mentioned above, according to Jacob it was about two years ago. At least for shipping. And I am very inclined to agree. I have been speaking at corporate conferences for the last 25 years and it’s quite easy to see what the biggest trend in business is any specific year: Just see what companies choose to talk about at their global management conferences. And for the last two years it has been a lot about sustainability. Before 2018 – 2019, it – honestly – wasn’t that common. And if it was on the agenda it was there as a “nice to have” not as a “need to do”.

But the important thing is not really to understand when a tipping point tips. It’s more important to understand how steep The Tipping Slope is after the tipping point has tipped over. The Tipping Slope is about how quickly a change is happening after the tipping point has been reached.

If you have 100 pebbles in a jar on one side of a see-saw and move on pebble per day to the other side you will reach the tipping point on day 51 and the Tipping Slope is about how quickly the change happened. If you move one pebble an hour the Tipping Slope is much steeper.

And the angle of the slope can change, and that’s what has happened around sustainability in many industries at the same time. One of these industries is shipping.

“We now have clients coming to us saying: ‘When can you offer us CO2 neutral shipping? That was a pipe dream just a few years ago. No client would seriously be willing to pay more for carbon free shipping. Now we are looking at how to make it happen. Having clients willing to pay for it when we do is a game changer.

The drastic change in direction for the shipping industry is not just driven by the customers and the shipping companies – it’s also coming from the banks and investors.

Jacob: “Our industry is waking up to the idea that if we do not become part of the solution we might become part of the past. If the shipping industry is not able to quickly offer decarbonized shipping solutions the clients might just decide to move their factories closer to the markets, drastically reducing the need for shipping.”

So therefore Jacob explained, with a metaphor apt for a sailor: “You cannot miss this boat.”

At Maersk they are committed to be on the right side of history.

Jacob: “We are now looking at developing a containership that will be CO2 neutral and it can be ready in just a couple of years. I am so happy to be here right now to see it happen. We aim to be fully carbon neutral by 2050.”

An ambitious goal for a company that burns 12 million tons of oil per year and – by itself – is responsible for 0,1% of all the CO2 emissions in the world today!

“It used to be that all sustainability activity was coming from the bottom of an organisation. Now, not only has this thinking reached the top. It’s coming from the top. That makes a huge difference.”, Jacob explained to me.

I guess we can say that we have gone from CEO to CEO2.

I asked Jacob to describe how it is to work in an environment where suddenly the change is happening quickly. He said: “For people like me who has been on this journey for decades now is the time to put into practise all the things we wanted to see happen.”

From talking to doing.

Jacob is now driving Maersk’s technical innovation efforts around engines and fuels to decarbonize shipping.

He told me about how the discussions around how to make shipping CO2 neutral has quickly changed from people giving him all the reasons for why that would not be possible to people brainstorming how it could become a reality. And how fast it could become a reality. From looking at small incremental changes to looking for transformational change in how ships are powered.

“What we realise is that this change is not has hard as people used to think. It’s hard, but not as hard as people liked to think.”

And it’s becoming easier and easier. As sustainability is becoming mainstream more talent is attracted to the area, more investors invest in the area, more ideas are generated, more ideas are tested. Budgets increase.

Some of the changes Jacob has witness around the topic of sustainability is:

– the discussions become shorter (= Less need to talk about why this needs to happen, so you can go straight to what you need to do)

– there is immediate urgency (= Less need to explain why the change has to happen now, more time to focus on getting things done)

– the money is there (Less need to argue for what you need money for, and more time to figure out how to use the money you have been given)

When you see that the world is changing fast you are more open to radical ideas, more keen on throwing old assumptions out of the window and more willing to re-learn what you need to know now.

The steeper the Tipping Slope the more open to change you need to be.

Jacob mentioned how the discussions around electric ships powered by batteries had gone from dismissive to open minded. No, the idea of ships powered by electric batteries is still not feasible, but the discussions around the idea are now driven by an open and exploratory mindset and not anymore aggressively hostile. That is crucial. Not because battery ships are a great idea, but because the industry needs to be more open minded to see the new possible solutions that are emerging.

“It’s like a fog of resistance to new ideas have been removed, and that increased vision is in itself triggering even more innovation. The discussions are suddenly around ‘How can we make it possible?’ instead of ’This will never work’.”

What tipping point is your company, industry or culture going through at the moment? How steep is the Tipping Slope? And what behaviour do you need to change in order to be aligned with the rolling ball of change that is rolling down that Tipping Slope?