Saturday, April 22, 2017

Boeing’s Corporate Soul Is an Endangered Species


For so long has corporate after corporation strives for a fat bottom line with a straight line drawn by consolidations, quality reductions and a search for the cheapest part. The program engineer sometimes become an endangered species as lay-offs become part of the corporate thirst for just-in-time investor satisfaction. Somehow the main product becomes the investor when abating risk is the Pablum for every investor.

Boeing has taken a wait and see position thus offering the door to hundreds of high paid employees until more sales are generated. The rationale is directed towards future market cycles slumping. As good stewards of investor money it will cut forces. The corporate soul is owned by money and everything else exist because of that money.

Back in the day the corporate mind set was building hugely successful products and the investors will come. The inverse follows with building hugely lean processes where the investor will profit.

Clear back to 2003, Boeing faced a crash by not having hugely successful products. They weren’t family and people love families while its investors love margins, shares, and such things. The mind set coming from investor thinking, “Go fire the fuel truck driver”, if it fattens the profit margin. Boeing aircraft happen to run on fuel.

Boeing has laid off hundreds of its higher skilled engineers because it will fatten the bottom line to do so. However, another perspective is why Boeing hasn’t used these people in its vast organization for the making of superior products which makes them indispensable. It suggests a Boeing waste of personnel has occurred and they must “go” because investors demand a reduction in force before stock prices can increase.

The simplistic rationale becomes traditional for its corporate-investor relationship. The micro-managing of expense items is the tweak for inspiring investments during a down sales year. In fact by years end when Boeing sales supersedes its competitor, Boeing stock will rise, while those “dispensable” engineers are long gone.

If it can be done cheaper with fewer people is the corporate engine of success. This happens too often in corporate world. The older concept of building the best is a risky gamble when profits are wrung out of cheap things becomes better motto to live by. No longer are things made for the pleasure of the customer but for the pleasure of investor.

This is more of an Allan Mulally story than a blog idea. Allan Mulally ran the Boeing commercial division until the Ford Motor Company had swept him away. Why? Because his vision is what a failing car company needed. Allan led the Boeing wide-body charge in the early 21st century the he engineered ford to its success. He defied the corporate conventional wisdom of cutting cost until becoming rich then leaving. An engineer had a vision to build it best and everything else falls into place. He was no cost cutting bean counter saving the corporate millions for the profitable investor. He was a sound old school performer who wanted to make it great or don’t do it at all.

In spite of its moon-shot problems encountered during the 787’s early program. The Mulally die had been cut. Boeing would take it to the next product level that even its competitor would fear to tread. His engineering sense made it so.

Since the arrival at Ford, Alan Mulally and even later his retirement, Ford has achieved a remarkable automotive turn around. They make a product people love. In fact being a big Chrysler fan, I have since lost interest in its product, because Ford brings a new game to the table which works well for me. The Chrysler-Fiat merger made me think more about Ford than anything.

Now corporate stiffs run Boeing. Engineers are being laid-off as may show less respect to the customer than for its investors is revealed. Boeing is not using its human resource well then having to lay off engineers. It tells me Boeing is run by a different breed of leadership which adheres to its main job of packing golden parachutes.

The HP example of an emerging leader in the computer world until they embarked onto the slippery slope of corporate self-service. It has shrunk, reduced, and imploded itself for the sake of corporate self-enrichment over customer satisfaction. Caught in the middle are its people who are slowly disappearing due to lay-offs and retirement packages. Soon it will be another American memory of how stockholders will reinvest into something else.

When a person refers to a corporate soul, it refers to what purpose the corporation has for being. Is it for its customers or is it for its leadership?