An alternate explanation for Boeing's failures
This is a story about hubris, and every organization is at risk.
Any simple explanation of an outcome in a complex system is guaranteed to be wrong to some degree.
To blame Boeing's recent failures on outsourcing or DEI alone, as many commentators like to do, is likely wrong to a degree as well. I believe I can offer additional context on Boeing's recent problems with the 787 and 737 MAX, with some takeaways for leaders of other large corporations who wish to avoid a similar fate. This isn't a story about outsourcing either. It's a story about hubris. I can guarantee that Boeing isn't the only corporation to suffer from this institutional flaw; they're just the ones in the news right now.
In 2003, an anonymous "forwarded" email was posted on airliners.net, claiming to be written by current Boeing employees who wished to stay anonymous but identified themselves as engineers in the Boeing Commercial Airplane division.
Their claims can be summarized as follows:
Boeing has been outsourcing aircraft design overseas, allowing Boeing to lay off US staff. The layoffs were leading to an institutional, irretrievable loss of knowledge about aircraft design and engineering.
Soon, Boeing may reach a "'point of no return' where irreversible damage has been done to the company's ability to design and build safe airplanes"
In short, firing key, experienced engineers and replacing them with outsourcing centers (and the additional process that goes along with outsourcing complex work) will lead to quality and safety issues. Considering the long lead time between an aircraft being designed and that aircraft entering production, these effects won't be visible for years. By that time, it will be too late. Decisions that look good on paper today (in 2003) will look very different in 10 or 20 years. Even hints of quality issues will have disastrous results for a company's commercial airplane business.
Additionally, giving away Boeing's ability to build commercial airplanes to future foreign competitors is strategically bad as well. At what point do the major suppliers decide they no longer need Boeing and start building airplanes to compete?
As interesting as those claims are, the reaction posts in that forum match the reactions anyone gets if they call out their own organization today.
Reactions:
"That's written by some very disgruntled employees."
"A passionate argument made by persons with a passionate interest in protecting their jobs. I truly take offense (and find unprofessional) the suggestions that safety is being compromised. Any employee making that suggestion could and should be terminated on the spot."
"Sounds like a frustrate who desperately tries to save his job." [sic]
"If you read through the bullshit, it's clearly a labor issue. Full stop."
"Clearly, they are setting up how unsafe it will be in order to protect their union job. It's a typical union tactic. Shame on them." and by the same user, Greg: "Those with half a brain see right through it"
"We all have gripes about our jobs. GET OVER IT!"
"From the inside, this is BS.. probably just some disgruntled employees."
Finally, the user "gigneil" shows up with some sense and explains that the letter is reasonable, actually, and worth considering. He is either attacked or ignored as well.
The negative comments question the motive of the authors and levy personal attacks against their character, going so far as to suggest they should be fired. Clearly, the authors were right to stay anonymous if that was the most common reaction.
Some big questions emerge as a result of this 2003 email:
Why were these engineers ignored?
The management believed they had the most accurate map of the territory in which they were operating. Anyone dissenting from their view didn't fully understand the industry as well as they did, and their concerns could be discarded as useless or even counterproductive.
And yet, the engineers were right.
They were the ones with the more accurate map of the territory in which they were operating. They saw their current position and the direction of the company and were able to accurately predict future outcomes decades in advance.
If you are operating with an accurate map of your territory, you can literally predict the future.
Warnings that challenge an accepted plan are easy to dismiss, especially when acting on them would be expensive. A healthier response is to separate the claim from the messenger: state the concern clearly, identify evidence that would confirm or disprove it, and revisit the decision as new evidence arrives.
The lesson for managers and owners
If you own a company, you should care above all else about having the most accurate map of your territory and being objectively right. To pursue anything else leads to suboptimal outcomes.
Some companies (Apple & SpaceX) are better at this than others, and these companies consistently win against competitors who are operating with a less accurate model of their territory.
Apple, for example, understands who their customers are and what they want better than their competitors.
In 2006, Microsoft released the Zune: a better iPod with all the features that iPod owners wanted. Soon after, Apple released the iPhone. Meanwhile, Blackberry knew their customers loved their smartphone keyboards, so they built the smartphones with the best keyboards. It was clearly the responsible and logical thing to do. In the next two years, all of their customers went out and bought iPhones.
On the manufacturing side, SpaceX understands that rapid, iterative contact with reality is the fastest way to build safe, cheap, and reliable rockets. They're dominating the space launch industry for the same reason agile software companies beat waterfall-driven software companies.
How do you develop an accurate map? How do you avoid making the mistakes of Boeing's management?
Stay open to evidence that disproves your view.
Evidence that challenges a plan can be uncomfortable, especially after time and reputation have been invested in it. Treat that discomfort as a prompt to investigate. SpaceX's development process, for example, attracts criticism when prototypes fail publicly, but those failures also create rapid feedback that competitors may not receive.Be on guard for cognitive dissonance in yourself.
When someone presents a credible argument that a plan may lead to bad outcomes, engage with the argument rather than speculating about motives. Ask what evidence supports it, what evidence would change it, and what the cost would be if the warning proved correct. A well-founded warning can save money, careers, or lives.
Pay attention to the people who are the best at predicting the future.
Everyone has a different model of the world driving their actions. If someone is consistently right or able to predict problems long before they happen, make it your priority to figure out what they know and how they know it.
Encourage a culture of epistemic humility
Ray Dalio's Dot Collector, and the principle of believability-weighing, is an excellent example of how this can be implemented.
This will not be popular unless you establish this culture from the start.
Your job is to be right, not to feel validated.
The lesson for employees
Individual employees can improve local decisions by documenting assumptions, proposing small tests, and making the evidence easy to evaluate. Broader culture change usually requires executive support, so it is worth being realistic about where you can have influence and choosing environments that value thoughtful dissent.
After all this, a thought experiment:
Would the actions of Boeing's management in 2003 have been different if they could more accurately predict the future consequences of their decisions?
If you manage to build a corporate culture that is consistently effective at predicting the outcomes of future decisions, you'll have a better chance of navigating towards a good outcome for all.
Boeing's outsourcing decisions may have produced genuine near-term savings and may even have helped the company remain price competitive. The management risk appears when benefits are immediate and measurable while the loss of knowledge is delayed and diffuse. Good governance makes both sides of that tradeoff visible, records the assumptions behind major decisions, and gives future safety and quality consequences meaningful weight in the present.
No manager wants to believe that a decision could eventually cause suffering. The forum response shows how easily that possibility can be dismissed by discrediting the messenger: “It's a typical union tactic. Shame on them.”