Delivering agile innovation in challenging times

MSC Cruises has been a serial innovator throughout its 30-year history. Jon Ingleton asks Pierfrancesco Vago how this attribute has helped the business to navigate the challenges of the past year

Delivering agile innovation in challenging times
MSC Cruises has introduced multiple new health and safety protocols to mitigate the risk of Covid-19

Industry innovation and pioneering leadership are two of many attributes that have elevated MSC Cruises to the top of its game over the past 30 years. Admired by cruise passengers and industry competitors alike, the company also demonstrates a business agility rarely seen in a company of its size. This quality has become a significant asset since the Covid-19 pandemic began rampaging worldwide in early 2020. 

“At the beginning of the emergency, our biggest achievement was getting our passengers home quickly and safely,” says Pierfrancesco Vago, executive chairman of MSC Cruises and global chair of Cruise Lines International Association. “The results that our crisis team achieved in coordinating and executing the logistics of such a significant undertaking gave us enormous pride.” 

Repatriating crew was an even tougher challenge. “Airports were shutting down, borders were closing and nations were locking up – some countries were even preventing their own citizens from returning home,” explains Vago. “However, we successfully repatriated over 20,000 crew members – without recording any cases of the virus – and then made arrangements to lay up our fleet.” 

At the outset of the pandemic, critics predicted that significant changes would need to be made to the cruise experience when, and even if, operations restarted. Since then, operators like MSC Cruises have been investing in medical research, people and equipment to overcome the health and safety implications of the virus. MSC Cruises quickly established a blue-ribbon Covid Expert Group to develop and implement its extensive and rigorous Health & Safety Protocol.  

“At the beginning of the pandemic there was very little knowledge about the virus and there was a disconnect among health authorities about the best way to combat Covid-19 and protect the public, so developing our protocol was very complicated,” says Vago. “First, we had to understand the logic and scientific data, then interpret this information to shape our health and safety approach. Next, we had to manage the demands of every health authority in every government in every country and align with port authorities and other stakeholders. I presented the nine main pillars of our protocol that is detailed in a 750-page document to various parties – we freely shared our perspective with everyone for the benefit of the entire industry.” 

In the early months of the pandemic, opinions about PCR testing, sanitation measures, best practices for mitigating the impact of the virus and other factors changed numerous times as new data was collected. 

Consequently, as MSC Cruises battled to build its defences, each process iteration ate into precious cash flow. “The capacity of our shareholders to understand and accept investment proposals during the crisis has been remarkable,” says Vago. “A practical example of the hardware investments we’ve made is the installation of an air treatment system for MSC Seashore, which will be delivered this summer, to sterilise all of the air that’s taken in and circulated around the ship with ultraviolet light. The air is circulated once and then replaced by newly treated air, killing 99 per cent of all airborne bacteria.” 

Vago attributes MSC Cruises’ success over the past 12 months to the fact that it is, first and foremost, a family company with family values. 

“We’re exceedingly professional, we have high standards, and our management team is very hands-on,” he says. “In today’s world these attributes are paramount. We’ve always been a very open and progressive company with a humble mentality. Unlike other big businesses, we don’t seek to continually reinvent ourselves and become investors in everything – we focus on shipping. That’s what we understand and that’s what we’re good at. We do have other business interests, like logistics and terminals, but they’re all as a consequence of our core shipping trade.” 

Being a family company with a dedicated team and focused industry expertise has yielded a business environment that breeds excellence in everything MSC Cruises does.  

“Our unity of purpose and inherent trust in each other leads to quick and intelligent decision-making and that makes us flexible and agile,” says Vago. “We don’t have to convince shareholders about the merits of the decisions we want to make because, in a family business, we are the shareholders. Our fundamental business decision-making criteria is to consider whether something is good for our company, our people and our future. We don’t have to prove a return on investment, we only have to know that it’s the right thing to do.” 

Investing in the right people and nurturing their personal and professional development is a fundamental part of MSC Cruises’ business strategy.  

“Our people give a great deal to the company across every business area, so it’s essential that they are engaged in, part of, and benefit from what we’re doing,” explains Vago. “Succeeding in a career at MSC Cruises is not about gaining titles or study certificates but developing dedication, curiosity, collaboration and professionalism. We don’t seek to buy great people from outside the business, we aim to nurture them from within. We have over 100,000 people around the world in the MSC Group and we give all of them the opportunity to progress their careers. Giving this sense of equality, belonging and ownership makes people invested in their role and seek to contribute to improvement initiatives.” 

People are also an essential pillar of MSC Cruises’ environmental sustainability strategy, which has remained a priority during the pandemic.  

“Our sustainability initiatives reflect on our family values and this helps to engender a greater sense of pride and belonging for our people,” says Vago. “Our sustainability mission incorporates short-, medium- and long-term investments. We amortise a $1 billion ship over 30 years but we’re analysing new technologies to improve its environmental performance throughout its lifetime.” 

The company has already made swift progress towards reaching its sustainability goals. “We’ve done an incredible job in solving a lot of issues, from recycling to water treatment,” says Vago. “Our reductions in carbon dioxide have also been dramatic, but it remains the biggest hurdle to overcome in the future as we seek zero emissions. We’re still investing in research and development in this area, including biofuels, hydrogen, fuel cells and batteries. And we’re partnering with other companies and industries to help accelerate the pace of innovation.” 

With operators around the world increasing efforts to make cruising more environmentally sustainable and the mass roll-out of enhanced health and safety protocols and Covid-19 vaccinations, Vago is “very confident” that the industry will soon be successful once again.  

“There is no other vacation choice that offers such wonderful adventures for such amazing value for money – we’ve proved it in the past and we’ll prove it again in the future,” he explains. “Holidays in 2021 and beyond will become even more meaningful. People have been through a psychologically challenging year and will want to get outside in the sun, meet friends and visit new places. 

“Cruising has a really exciting future – for passengers, for the industry and of course for MSC Cruises. In addition to fully restarting operations, welcoming our new ships, visiting new destinations and advancing our environmental and other initiatives, we’ve got a totally new cruise brand to launch!” 

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Jon Ingleton
By Jon Ingleton
06 April 2021

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