Cultivating a Purpose-Driven Boeing Culture of Sustainable Innovation

Hubert Rampersad, Ph.D.

“The one thing missing from the board of directors of Boeing is a holistic view on cultivating a purpose-driven culture of sustainable Innovation” — Hubert Rampersad

Boeing lost its way. Other companies should take heed;?“It’s become clear that Boeing’s problems run far deeper. They expose decades of American corporate philosophy gone awry.?Boeing is a quintessential example of America’s rotting business culture over the past 40 years” (Markets Insider). Boeing focused on pleasing Wall Street because that’s how American executives believe companies should operate. The people who are at the top are there for a reason, and it’s basically to maximize shareholder value. Simply changing CEOs or hiring more engineers won’t make Boeing’s problems go away. The company needs to rethink its very reason for existing and what it should provide to society as an enterprise. Lopez: “A good American company isn’t just a vehicle for financial returns; it is first and foremost an employer, a contributor to economic and/or technological innovation, and a source of US power. Whether the recent disasters shake Boeing out of its somnambulance remains unclear. It’s also questionable whether other major companies with a similar maximize-shareholder-value-at-all-costs ethos will learn from the mistakes. But it’s clear that what Boeing — and the entire American corporate body politic — needs is nothing short of a philosophical counterrevolution”.?William McGee: “For decades Boeing was the pinnacle of American engineering. It was America’s crown jewel and one of the most important and impressive companies in the US”. In Boeing’s quarterly earnings, President and CEO Dave Calhoun (who was hired after the previous 737 Max disasters) promised more of a focus on quality and encouraged employees to speak up about issues on the factory floor.?But the short-sighted Calhoun is putting out fires with his ad-hoc approach. He does not realize that he is only treating the symptoms of the problem and not addressing the root cause. The real root cause is a rotten corporate culture at Boeing which is focused on making shareholders happy instead of focusing on a purpose-driven culture.

Boeing’s trajectory has veered off course due to America’s deteriorating business culture, which prioritizes swift profits for shareholders over aircraft safety. This shift was initiated by Jack Welch approximately 40 years ago. The recent Boeing crisis lays bare years of flawed American corporate philosophy centered around shareholder interests. A significant portion of today’s corporate challenges can be traced back to the legacy of GE’s former chairman, Jack Welch, who was revered by CEOs worldwide. Interestingly, Boeing’s current Chairman, David Calhoun, once served as Welch’s deputy. Calhoun is focused on maximizing profits for his shareholders, just like many CEOs in corporate America. It’s probably no surprise that CEO pay increased by 1,322% from 1978 to 2020.

Lopez: “An entire generation?of politicians and executives preached the doctrine of efficiency in the name of maximizing profits for shareholders, and we’ve seen the results: stagnant wages, massive inequality, legislators captured by industry lobbyists, and companies that coast on past innovation and financialization because it’s easier than investing in something new. As Boeing has been forced to reckon with the corporate culture it developed over the past 40 years, corporate America has been forced to face the long-term cost of its obsession with shareholder primacy and efficiency.” McGee: “Boeing is vital, but we don’t treat it like it’s vital. We treat it like a casino”.?

Former CEO?Jim McNerney?systematically promoted non-technical people to executive positions, particularly on the?board. Incredibly, the?MAX?was developed under him and the commercial unit CEO — neither of whom had a technical degree. Former CEO Dave Calhoun, who is also not an engineer, has followed the same path,?promoting people with similar financial backgrounds (left brain bookkeepers). The whole board should be fired!

Innovations fail at Boeing due to a lack of anchoring innovations in a purpose-driven corporate culture. The best innovations align with the innovator’s and company’s purpose and generate mutual value for its stakeholders. When innovations resonate with the employee’s and organization’s higher purpose and benefit the company, its employees, and key constituents, they are more likely to succeed and become sustainable. Purpose-driven tech companies are not only focused on profitability but also on making a positive impact on society.?Their innovations are sustainable. This appears to be different at Boeing, read my article “How the Boeing 737 Max Incidents Could Have Been?Avoided”. .........read further.

Hubert Rampersad, Ph.D.

Orlando, Florida |? [email protected] |? Phone/WhatsApp: +13053992116?