If you lived in northwest Washington as I do you’d know that the economy of the region is dominated by the fortunes of several large employers. Microsoft, Starbucks and Amazon are only a few of these. Among this group and maybe the most volatile in recent years has been The Boeing Company. Headquartered in Everett, north of Seattle about 30 miles Boeing employs just over 70,000 people in Washington. So, how things are going at Boeing matters a great deal to everyone hereabouts and recent years have been challenging indeed.
How is Boeing doing?
Boeing One
In October this year a new book on Boeing was published, ‘Turbulence: Boeing and the State of American Workers and Managers.’ The story told in the book covers a ten year period of Boeing’s experience, 1996-2006, a period of massive internal change.
As the authors state about this period in Boeing’s history “The very innovations and changes Boeing introduced to remain a leading producer of airplanes — altered management strategies, pervasive technological changes, extensive outsourcing, broad global partnerships, massive layoffs, and drastically altered ways of working —- produced stress and turbulence in the lives of workers and managers alike.”
Well….DUH!
Harry Hurt III, the author of the review of this book in the New York Times points out the following:
“One of the book’s most notable findings has to do with outsourcing….Two aims of the outsourcing were to cut costs and to gain access to more foreign markets; both of those goals were largely achieved.
… Yet in practice, the authors say, the process proved much more complicated, something Boeing discovered to its considerable discomfort in 2008 and 2009… Production of the 787 would fall two years behind schedule.”
I am betting this was stressful too!
- The surprise to me is that we continue to insist that this type of news is surprising!
We are talking about cataclysmic change here…who is good at this, who would have ever seriously thought this would be anything but highly stressful and as for a determination of success, do the authors have all the right measures for offering any final assessment?
Boeing Two
Quite possibly as interesting a story to follow about Boeing lies in the short history of its current CEO, Jim McNerney. In his 2008 book ‘You Can’t Order Change: Lessons from Jim McNerney’s Turnaround at Boeing’ author/consultant/venture capitalist Peter Cohan introduces us to the success and tale of a well known executive coming in from another system, GE, and bringing his unique talents and consensus driven style to bear on a company that by any standards would be tough to manage.
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OK, so now that’s settled, according to ‘Turbulence’ a lot of people were upset by going “hard to port” for ten years but according to Cohan’s book, ‘You Can’t Order Change…” it all turned out fine in the end…? Well, except for some morale issues.
Boeing Three
Not so fast my friends! As recently as September 30, 2010 Peter Cohan was calling for Jim McNerney’s head. It is just short of two years since he offered high praise for McNerney and he still thinks of him as a strong financial manager, “Boeing’s financial performance under McNerney isn’t that disappointing. Between 2005 and 2009, Boeing’s sales have risen 27% to $68.3 billion…” And Boeing stock, selling for $66 a share in 2005 when McNerney took over was selling at $65 as recently as December 23rd, 2010. However, Cohan is now critical of McNerney because he is not an operations guru as well. Says Cohan “The problem is McNerney lacks a key skill that Boeing needs: the ability to manage a portfolio of complex engineering projects…And this suggests that McNerney isn’t in control of Boeing’s operations.” (Author’s note: This is a gross understatement of the issues Boeing is faced with!) 
So what is really going on at Boeing? How should those of us in the northwest feel about the future of this critical player in our economic puzzle?
Honestly I think Cohan is to be credited for intellectual honesty. If he were to be anything less than honest about how he feels about McNerney now his credibility would plummet. As for the authors of Turbulence; they do come up short on solutions yet maybe wisely so. Possibly the best anyone can do for now is to admit that they alone do not have the answers, the new wisdom may well lie in suggesting a new model for management, a strength based model.
The big lessons here may be two fold:
- Strap in folks, no matter how good we are we are all in for a rough ride into the future.
- The days of clinging to the “one great man/woman” models of management are just as likely over.
The complexity and chaotic nature of today’s global business issues may well be bringing forth a new era in management, one that is strength based and truly more democratic than any we have ever seen. Jim McNerney needs an operations partner with the final say on those issues and hopefully the wisdom to bring in some highly talented logistics and supply chain experts and oh yes, a great vendor management system and someone to run it. He also needs investment partners, people who can see beyond the current financial cycles and counsel investors to take the long view. Finally, McNerney will need to recognize that his management experience at GE, primarily a portfolio of companies may not neatly correlate to Boeing, a portfolio of projects. The two companies are different animals altogether.
What then is the truth about Boeing?
It depends on what you want Boeing to be. Here in the northwest we want Boeing to be around for as long as possible and offer employment to as many local citizens as possible.
- In your own organization can you see where a more collaborative management model may be called for?
