Freefall: A Reckoning for Boeing focuses considerable attention on Boeing’s leadership, corporate culture, quality concerns, and decisions associated with financial and production pressures. The documentary raises an important question that deserves further consideration: What kind of management system could help prevent an organization from repeatedly making decisions that contribute to serious operational and quality problems?
Identifying management failures is important. But identifying what went wrong does not by itself create a system that prevents recurrence. Boeing needs a management approach that remains effective through changes in executives, economic conditions, production pressures, and corporate priorities.
Netflix Boeing Documentary Highlights a Problem That Goes Beyond Boeing
The Netflix Boeing documentary should be relevant to executives far beyond the aerospace industry. An organization can have talented employees, sophisticated technology, extensive procedures, quality departments, and thousands of performance measurements and still make poor enterprise-level decisions.
One reason is that large organizations are often managed as collections of functional silos. Finance, manufacturing, engineering, quality, and supply-chain functions can each pursue their own objectives without adequately considering the effect on the overall enterprise.
An effective business management system needs to evaluate the organization as an interconnected system rather than as independently managed functions.
Boeing Management Failures Require More Than Changing Executives
The Boeing management failures described in discussions surrounding the company understandably lead to questions about senior leadership. Leadership matters enormously, but changing executives does not necessarily change the system through which the company is managed.
New leaders can inherit the same performance measures, financial targets, incentives, organizational silos, and decision-making practices as their predecessors.
Without changing the underlying management system, an organization can repeatedly move from crisis to corrective action to another crisis. A sustainable solution requires changing the system rather than repeatedly responding to its symptoms.
Boeing Quality and Safety Problems Show the Danger of Managing to the Numbers
The Boeing quality and safety problems illustrate an important weakness in traditional performance management: excessive emphasis on meeting numerical targets.
Financial goals, production objectives, delivery schedules, and cost targets are necessary. Problems arise when achieving these numbers becomes more important than understanding the processes that generate them.
Management should not simply ask, “Did we meet the target?”
A more useful question is, “What is this process predictably capable of producing in the future, and is that performance satisfactory?”
This distinction is fundamental to Integrated Enterprise Excellence and its use of 30,000-foot-level predictive performance reporting.
Boeing Business Management System Should Provide a Long-Lasting Framework
A Boeing business management system should do more than respond to the latest quality problem, investigation, or leadership change. It should provide a lasting framework connecting strategy, financial objectives, operations, quality, predictive performance measurements, and improvement efforts.
Integrated Enterprise Excellence (IEE) provides such a framework through its nine-step business management system. Rather than managing through disconnected scorecards, arbitrary targets, functional silos, and isolated improvement projects, IEE provides a structured approach for determining how the enterprise is performing, where improvement is needed, and which actions should provide the greatest enterprise benefit.
The objective is not simply to correct Boeing’s latest problem.
The objective is to establish a management system that makes better decisions and sustained enterprise improvement the way the organization is managed.
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