How Does an Organization Like Boeing Coordinate Work Under Intense Competitive Pressure?
Our case study on Boeing this month unfolded in real time, leading up to a second critical glitch on one of their products, this time its space capsule. Again, the events played out under intense competitive pressure and highlighted how inherent conflict between an organization's departments can create disaster.
The launch of Boeing's Starliner capsule took place 10 months after competitor SpaceX’s successful testing of its Starship and on a significantly larger budget ($4.2 billion vs. $2.5 billion for SpaceX) from NASA. One can only imagine the pressure under which developers were working at Boeing. The result? A failure to reach its destination, the International Space Station.
While the cause is under investigation, early indications are that it was due to a faulty clock setting that started a fuel burn 11 hours too early into the mission, using up so much fuel that the capsule could not reach the proper altitude. According to a reported comment by Jim Chilton, senior vice president of the space and launch division at Boeing, “the problem was with the Boeing software, not with the rocket, which was built and operated by another company, the United Launch Alliance.”
While we were addressing one possible example of a lack of coordinated, long-term thinking under pressure (among other things) associated with the fatal crashes of two Boeing MAX 737 jetliners, what quite possibly was another example unfolded.
As reader Anna Johnson put it, “When the pressure to meet quarterly performance expectations against best-guess sales targets and a flesh pounding schedule take precedence, it’s not surprising that psychological safety and personal accountability are closeted.” Hans-Peter Sebregondi, quoting from a Deloitte thought piece, wrote, “If your executive suite is like most … discussion usually centers on the positive aspects of the company’s strategy and the need to rally around said strategy, with scant consideration of the downside possibilities.”
Contemplating a solution
What’s to be done? Nick C. suggested that ‘Some mechanisms can be so suffocating and can fall into the ‘over governed and under led’ bucket, others are so loose as to be undetectable and easily worked around. One perspective that might be helpful here is to more scientifically evaluate the dominant cultural traits and prevailing operating climate.”
Anna Johnson recommended: “We need to flip the switch on dissent, delay, and accountability by enabling leadership to take a long view. Want to do better? Try asking your people to tell you honestly, ‘What don’t I know that I should know?’ And then—Don’t Shoot the Messenger.”
Inanc Inan was prescient as he kicked off this month’s discussion by asking, “Where does the buck stop? … (The) first ethical step (by Boeing’s CEO) would be to step away from the post to signal to shareholders and most importantly to the society that the changes will take place.” The departure of Dennis Muilenburg, Boeing’s CEO, was announced on December 23. Boeing’s stock rallied on the news.
Clearly, the departure of one person is not a solution to an endemic problem. The question remains: How does an organization coordinate work under intense competitive pressure? What do you think?
Original Column
Tube and train riders in Europe are well-aware of the term, “mind the gap.” They see it every time they step off a train or subway platform. In a sense, it’s also an appropriate warning for leaders of large organizations. Just how can they reduce the gaps in understanding between departments staffed with employees whose responsibilities and training vary widely?
Inherent organizational conflict takes many forms—for example, between home office staff (“who don’t understand how the business really works,” according to those in the field) and those in operating or engineering jobs (“who don’t understand the big picture,” according to those at headquarters); between officers and enlisted personnel in the military; between doctors and hospital administrators; and between faculty and school administrators, to cite just a few examples.
The conflict is inevitable; it will never be eliminated. This is an oversimplication of a complex phenomenon, with nuances in every large organization that has grown beyond the “one for all and all for one” startup spirit. But when it rises to a level that affects marketing plans, engineering design, manufacturing schedules, and even safety, something has to be done. When combined with a loss of “voice” at lower levels in the organization, it can be lethal. In the view of some observers, that’s what happened recently at Boeing.
The Boeing example
A whistleblower complaint blamed a control system failure for two fatal crashes of the Boeing 737 Max jet plane, after management refused to honor an engineering request for a safety device. Apparently, adding the safety device would have led to FAA required, and expensive, Level D training for every pilot assigned to fly the plane, something management was trying to avoid.
It’s alleged that pressure was increasingly being applied by top management to meet cost and delivery targets. Sales had done a great job selling planes several years out at prices based on costs that it was thought would eventually be achieved as the production learning curve kicked in. Employees were warned that pay was at risk if the targets weren’t met. According to one BloombergBusinessweek report, “They were targeting the highly paid, highly experienced engineers.” One flight test group member commented, “It was a climate that didn’t reward people willing to buck managers … So you really watched your step and were careful about what you said.”
Can’t you just imagine it? Headquarters vs. the engineers, engineering vs. manufacturing, manufacturing vs. sales, etc. leading to Boeing vs. customers and the public. If this were an isolated case of a large, proud, successful company failing to “mind the gap,” we could ignore it. But somewhat similar charges were lodged in the case of cheating on vehicle emissions technology at Volkswagen just months earlier. A proud engineering group was “encouraged” to apply its expertise to develop technology to aid cheating. What kind of morale did that produce among engineers used to being celebrated and admired at Wolfsberg social events?
"Can’t you just imagine it? Headquarters vs. the engineers, engineering vs. manufacturing, manufacturing vs. sales, etc. leading to Boeing vs. customers and the public."
What’s to be done? Anything? Or is the problem so endemic to organizations that it is overshadowed by other issues that we are more capable of addressing?
At Toyota, we have long admired Jidoka, Principle 5 of the 14 that comprise The Toyota Way, that any employee can stop the production line to signal a quality issue. Do we need a kind of corporate “Jidoka rule” that calls a “stop,” examines behavior, preserves “voice,” encourages respect, and leads to learning between elements of the organization with different interests and goals? What practices have you observed that helped (or hurt) those attempting to deal with “gap problems” in your organization?
How can leadership best “mind the gap” in large organizations? What do you think?
References:
Natalie Kitroeff, David Gelles, and Jack Nicas, Boeing Rejected Safety System for 737 Max Jet, Engineer Says, The New York Times, October 3, 2019, pp. B1 and B4.
Peter Robison, with Julie Johnsson, Ben Elgin, and Margaret Newkirk, It Was Engineering That Would Have to Bend, BloombergBusinessweek, May 13, 2019, pp. 46 -49.