- Boeing’s new CEO plans to change the company’s culture by putting executives on the factory floor.
- This strategy aims to address safety, communication and trust at Boeing.
- One analyst said Boeing should have always connected its top managers to employees.
Boeing’s new CEO on Wednesday laid out a four-part plan to fix the ailing company.
He said a top priority is “fundamentally” changing the culture, in part by putting executives on the factory floor.
“We need to be on the factory floors, in the back shops and in our engineering labs,” he said in a memo to employees. “We need to know what’s going on, not just with our products, but with our people.”
It’s not unusual for companies to send executives to work alongside high-ranking workers.
Home Depot recently announced that it would require corporate employees to work shifts at the company’s stores each quarter. Former Starbucks CEO Laxman Narasimhan last year directed senior executives to work in stores to better understand employee pain points and customer experiences.
For Boeing, the strategy could help bridge gaps in security and communications as the planemaker tries to regain its footing in the aerospace industry.
Boeing plans to better connect with its workers
Ortberg is tasked with halting Boeing’s freefall after a difficult year of quality, safety and production problems, plus a 40-day strike that has cost him about $50 million a day.
Thousands of Boeing IAM union members have been on strike since September 13. Stephen Brashear/Getty Images
During Boeing’s third-quarter earnings call on Wednesday, Ortberg told investors that he is focused on holding the organization accountable and reevaluating the company’s values to earn trust. He said cultural change starts at the top and won’t happen overnight.
“I’m still in the process of traveling around, meeting our people, especially two and three levels down,” he said on the call. We just have to get everybody in the right position, playing the right game, focused on the right thing, and I think we’ve got some work to do there.”
Ortberg said he would consider supplementing the team with outside resources to help address Boeing’s cultural gaps. At the same time, he has promised to reduce the company’s workforce by laying off about 17,000 workers.
“One of the things I’ve heard from a lot of employees is that there’s a lot of overhead; it slows them down in being able to do their jobs,” he said. “So we’re going to really focus on that workforce reduction in streaming those general activities [and] consolidating things that can be consolidated”.
Putting managers in the shoes of workers can improve safety
Ortberg said his plan to change the company’s culture would help root out quality issues in addition to giving executives more insight into its people and products.
Boeing’s safety action plan, submitted to the FAA in May, focuses on strengthening employee safety reporting, simplifying and clarifying job expectations, and improving staff communication and training.
A communications breakdown was later identified as a reason critical bolts were missing on the Max 9 aircraft that lost a door plug mid-flight in January. At least three whistleblowers have come forward since the incident to report slide quality problems on the assembly line, with one veteran engineer saying they risked punishment from Boeing for raising safety issues.
Boeing struggled to deliver planes on time even before the attack began. Jennifer Buchanan/Pool/AFP via Getty Images
Putting managers in workers’ shoes can help improve communication and quality processes and ensure employees get the resources they need.
Uber CEO Dara KhosrowshahiFor example, he has been vocal about how his time driving for the company illuminated the problems facing its executives.
It could be the change Boeing needs
Richard Aboulafia, managing director at AeroDynamic Advisory, told Business Insider that Boeing should have put executives on the factory floor long before Ortberg showed up.
“Boeing needs to root out the people who thought it was appropriate or even acceptable not to have that interaction in the first place,” he said. “Who said it was OK to run a company where there were these extensions between the people who are in charge and the people who actually do the business of the company.”
Aboulafia said Ortberg may have a difficult time forcing cultural change unless he cuts some of the managers who led the company through its recent crises.
Peter McNally, an analyst at Third Bridge, told BI that Ortberg’s operational background is critical to the company’s cultural revival.
“Kelly Ortberg was hired for his operational expertise, not his ability to sell more aircraft,” he said. “He is an engineer with deep industry experience, and his previous experience at Rockwell Collins gives him a lot of credibility with the rank and file.”