Introduction

I have followed the Boeing saga for many years, with my interest initially piqued by its merger with McDonnell Douglas in 1997. This merger was surprising to me, particularly as I vividly recall an airline disaster in the 1970s near Paris involving a DC-10 from Turkish Airlines, which lost its backdoor after takeoff from Istanbul’s airport.

Early Impressions and Personal Connections

In the 1980s, while I was based in Australia, my parents flew from Europe on a DC-10 and were quite pleased with their flight experience. At that time, I was unaware of the profound impact this merger would have on Boeing’s company culture.

Complexity and Enterprise Architecture

By the late 1990s, technological advancements in telecom, banking, and healthcare had begun to transform ecosystems, raising the challenge of complexity management. This period marked the beginning of my focus on enterprise architecture, a discipline that supported my role as an IT Director. One of the case studies we used was Boeing’s 747 architecture, which served as an exemplary model of enduring design. The 747’s evolution showcased how an adaptable design could incorporate various technologies over time, enhancing production and design without compromising the original product qualities. An enterprise-wide analysis became more critical than ever to establish better governance and overall EA Management. One could also view the situation in the prism of Enterprise Engineering.

The Era of the 777 and Dreamliner

The introduction of the 777 and the Dreamliner highlighted Boeing’s outsourcing challenges in the media. Despite this, my trust in the company and its products remained steadfast. During this period, I frequently took commercial flights, flying twice a month. However, the subsequent disasters related to the 737 Max began to erode my confidence. I attributed these failures to the company culture and believed they needed to streamline their operations and improve supply chain management. I had assumed that these necessary changes would be supported by an integrated quality management system.

Cultural Shifts and Financial Engineering

Unfortunately, I was wrong in my assumptions. The company’s misfortunes seemed to stem from a culture more focused on financial engineering than aerospace engineering. This shift in focus implied prioritizing shareholder satisfaction through share buybacks over investing in product development. Again, these are just my perceptions and not grounded in official documentation.

Financial Engineering Explained

Wikipedia defines financial engineering as a multidisciplinary field involving financial theory, methods of engineering, mathematical tools, programming, and the application of technical methods in finance practice. This definition underscores the complex nature of the challenges Boeing faced as it navigated its evolving corporate strategy.

The Intersection of Aerospace Engineering and Systems Thinking: A Reflection

The Boeing saga, from its merger with McDonnell Douglas to the challenges of the 737 Max, appears to illustrate the possible impact sof corporate culture on innovation and product integrity. As technological complexity continues to rise, the lessons from Boeing’s journey underscore the importance of balancing financial strategies with robust engineering practices to maintain product excellence and company reputation.

Aerospace engineering, primarily concerned with the development of aircraft, encompasses various aspects of electronics, especially in the design of avionics. The introduction of flight-by-wire systems and sophisticated software supporting pilots has significantly drawn attention to this field. However, my corporate experience has revealed mixed feelings regarding the application of systems thinking in decision-making processes, especially when dealing with CFOs and lawyers.

Often, these executives rely on gut feelings or personal relationships formed at conferences when making critical decisions, such as selecting an ERP system or choosing suppliers. Despite our comprehensive risk analyses and well-prepared storytelling highlighting various options to achieve the target state of the architecture, these efforts frequently fall short. The intuition of the executives or their trust in a slick presentation often outweighs the complex roadmaps we present, which detail potential challenges and conflicts in system implementation that could lead to legal disputes.

Ultimately, it is easier to collaborate with individuals who demonstrate systems thinking skills, particularly those with consulting backgrounds in business advisory roles or engineers trained in such skills . In particular, downplaying of  engineersing perspectives from an engineering company could raise risks – perhaps something like this happened at Boeing.. Such an approachto  risks can undermine the company’s fundamental DNA, driven by short-term incentives, despite the fact that product life cycles typically span around 20 years.

Reflecting on my interactions with ChatGPT-4, I can attest that only part of our conversation is represented here. However, with strong prompting skills and the ability to assess its feedback, one can achieve significant insights. For instance, when an aerospace engineering company shifts its focus from core engineering competencies to financial engineering and ignores whistleblowers, several adverse outcomes can ensue.

In summary, maintaining a balance between engineering expertise and financial acumen is crucial for the sustainable success of aerospace engineering companies. Embracing systems thinking and valuing comprehensive risk analyses over gut feelings, should this be a dominant trend, can help navigate the complexities of modern engineering challenges, ensuring long-term growth and stability.

Below is an output of a ChatGPT 4o analysis of the The Economist podcast+ on a possible Boeing Turnaround and here are some key points about Boeing’s challenges and potential solutions:

1. Historical Context:
   • Boeing’s issues date back to its 1997 merger with McDonnell Douglas, shifting its focus from engineering excellence to shareholder value.
   • This shift resulted in reduced investment in product development and a greater focus on financial engineering.
2. The 737 Max Crises:
   • The design of the 737 Max, which was an attempt to update the older 737 model with larger engines, led to safety issues.
   • The MCAS software, introduced to counteract the plane’s tendency to stall due to the new engine placement, was not adequately communicated to pilots, leading to two fatal crashes.
3. Regulatory and Financial Fallout:
   • Boeing’s handling of the crashes was marked by denial and shifting blame, damaging its reputation.
   • The FAA increased scrutiny on Boeing, and the company has faced significant financial losses and operational challenges, including halted production and loss of orders.
4. Leadership and Cultural Issues:
   • Current CEO Dave Calhoun has struggled to effectively address these issues.
   • There’s a debate over whether the next CEO should be an insider familiar with Boeing’s problems or an outsider who can bring fresh perspectives.
5. Strategic Recommendations:
   • Move Headquarters: Relocating Boeing’s headquarters back to Seattle to reconnect with its engineering roots.
   • Leadership Focus: Appointing leaders with a passion for aerospace to drive cultural change.
   • Regain Trust: Winning back trust from regulators, customers, employees, and the flying public.
   • New Product Development: Developing a new aircraft to replace the outdated 737 model.
6. Market Dynamics:
   • Boeing’s struggles have benefited Airbus, its main competitor.
   • The long-term stability of the aviation market depends on Boeing’s recovery to maintain a competitive duopoly.
   • The possibility of a new entrant in the market, such as China’s Comac, is being watched but has yet to significantly impact Boeing and Airbus’s dominance.

Summary Assessment

A large engineering company, such as Boeing, that doesn’t adequately balance financial risks with the mission-critical engineering ones could lead to the following: compromised product safety, loss of trust and reputation, significant financial losses, operational disruptions, and strategic setbacks.

Conclusion

In light of the complex transformation challenges noted, Enterprise-scale-architecture could play a critical role in the meshing of the different threads that must be harmonized over time to enhance the practice of Enterprise Engineering, a more operational framework of transformation in more operational ways than in just the enhanced visual tools that EA can bring.

References

1.: Leadership: What “systems thinking” actually means – and why it matters for innovation today.

https://www.weforum.org/agenda/2021/01/what-systems-thinking-actually-means-and-why-it-matters-today

2. The Economist, June 20, 2024, What will it take to turn Boeing around?

https://www.economist.com/podcasts/2024/06/20/what-will-it-take-to-turn-boeing-around

Authored by Alex Wyka, EA Principals Senior Consultant and Principal