Suite Talk: Damco’s CEO, Thomas Knudsen

Having just transitioned to his new role as Asia CEO at Damco, Thomas Knudsen – the former Asia Pacific CEO of Maersk Line – speaks with Akankasha Dewan on the demands of the job and how HR professionals can develop their own leadership skills.

You’ve been CEO for the Asia Pacific region at Maersk for about four years. How would you summarise your experiences?

I’ve been abroad for more than 22 years with the Maersk Group so this is one of many international assignments and it has certainly helped in reaffirming my excitement about working in an international environment.

I thoroughly enjoy my engagement with people from different cultures, particularly in Asia, and this feeling that we’re going towards a better future is exciting. People are getting wealthier, jobs are being created and things are generally going towards a positive direction.

Within Maersk Line, the challenge was a move from being an international company to a global company, which was exciting. We spent a lot of resources in building a local pipeline of talent in countries within the region and moving away from mainly relying on expats for the top level jobs. That has been the most exciting part of my journey for the past two years.

Could you tell us a bit about your new role and responsibilities at Damco? 

Damco is a logistics provider with a global scope and a very strong presence in Asia – we have almost 6,000 colleagues in Asia and a presence in almost every country. As CEO, I’m responsible for leading the organisation – both managing the short-term business as well as setting the direction for the future – growing new areas, making investments and building a strong pipeline of talented people.

What are you most looking forward to in this role?

I’m very much looking forward to taking what is already a very strong business that has a very solid customer portfolio of global brands and growing our involvement and scope with them – as well as building new businesses with some of the emerging Asian champions that are appearing, especially in China, Japan and Korea.

We also have a very strong presence in the emerging areas in Southeast Asia; in countries like Cambodia and Myanmar, we have our own organisations with a very strong footprint. There is great potential in growing that.

And last, but not least, I do believe we can do even more to build a strong pipeline of talent. We need more Asian leaders and we also struggle with gender diversity at the senior levels – despite having a great pipeline of middle management talent. So, there is plenty of work to be done.

The first month in Damco has been exciting – it is a steep learning curve, but the organisation is very welcoming and has made me feel welcome already. I’m very optimistic about our future based on the very good people we have.

What’s your secret to managing a large global workforce?

What I’ve tried to do in the past is build a strong leadership in the countries we were involved in, and really trying, through the regional functions, to support the countries instead of doing the job for them.

So, I see my role and the region’s role as really to provide resourcing and coaching and mentoring. And then when needed, to provide cover from a global organisation, but not really getting involved in the day to day business.

Could you give us an example of a tough decision you had to make and what lessons you learnt from it?

I’d rather say the toughest decisions were the ones I didn’t make, but should have made. I often look back on my career – both at this job and in other previous jobs – to say I wish I had taken some of the tough decisions earlier.

If I had taken some of the tough performance discussions with people six months or a year earlier, business results would have improved. Where I had low performers, I should have had the honest conversations earlier. It only gets more and more difficult as time passes. So the toughest decisions are the ones I should have taken earlier.

But in terms of the decisions I have made, it is clearly when I’ve had to make large organisational changes it has been the most difficult. I have no problems with saying goodbye to poor performers if I have done my part in terms of trying to coach and improve, but I think it is tough to say goodbye to good people as a result of major restructuring, because their individual performance may not have been lacking.

How do you help low-performing or unmotivated employees to perform better?

To understand the underlying motives of performance is to understand whether the people have the capability or not; to understand whether the external environment is difficult; or whether it is potentially myself or my team that doesn’t allow the employees to succeed. If so, what can I do to help with the internal challenges of the company?

This includes sitting down and coming up with an improvement plan with them to make them successful – and taking the consequences if improvement doesn’t happen.

Have you faced these sorts of situations often with employees?

Yes I have. I won’t say I have them constantly, but it is clear there are always employees that can improve their performance – sometimes because they are at a level which is not acceptable and sometimes because they are at a level which is just OK and not really good.

Your role is no doubt a stressful one. How do you cope with a bad day at work, and how do you re-energise yourself?

I exercise. Some people feel they don’t have the energy to exercise, but I feel I get energy only when I exercise, and so I try to get in the gym or go for a run every day.

Let’s talk about HR. Do you think HR leaders have the necessary skills and vision required to make it as a CEO?

Often not – not to the CEO level. There may be exceptions, but many HR leaders that I have met are simply not good enough at understanding the key elements of the business. HR business partnering is an area where I sense we need to see stronger HR people.

This is also in terms of data, be it understanding the HR data in itself or understanding the data of the business, as well as financial performance or operational or commercial performance.

Perhaps in HR there is a culture which is more focused on soft values. It is more about talent, leadership, coaching and so forth whereas the CEO role also has a lot of elements which are to do with getting things done and being accountable for numbers. As a CEO, you have to be able to do both.

Yes, HR leaders are still struggling with collecting and using data. What advice would you give in this area?

HR leaders are often great coaches of other functional leaders, on how leaders of other functions can become better HR managers and leaders. Perhaps HR leaders themselves could spend some time with finance and operations people, in particular, on how they use data. They can try to be coached by other business leaders and ask questions like: “If I have this data in HR, how do I apply it?”

Perhaps through getting coaching and reverse input from functional managers, they can use data better.

How easy is it for the HR function to become disconnected from other business units?

It has certainly happened in Maersk Line before. With Rupert [Brown, head of HR APAC] and his predecessor I feel that HR has become much closer to the business, but I have certainly seen examples where HR is not an intricate part of the business.

How do you think the HR function can become more strategic and be a better business partner?

I think it is a question of being in the business. Be out meeting with people, see if you can get in front of customers, meet with suppliers. It is about really sensing and feeling the business. Also have conversations with people about the business, not only about HR-related subjects. You need to passionately want to know what’s going on in the business; this is the first and foremost step.

What is your overall view of HR as a business function?

I think it is essential, and I’ll give you one example why. Three years ago, Maersk Line was losing significant amounts of money every day. We had the same hardware as we have today, we had the same external environment. Two years later, we are making a 9% return on investment on our capital, but we are doing things differently with our people.

For me, the employees are by far the most important lever for financial performance which you can find, and HR is an important enabler of that.