Poor Boeing. Last year was an annus horribilis for the aircraft manufacturer, with the company making headlines for all the wrong reasons.
I sympathize with the employees.
I know from personal experience how awful it can be when a business is facing tough times like this.
For some employees, it’ll feel like being a passenger on the Titanic after it had struck the iceberg.
A similar sense of alarm has likely gripped the company’s suppliers too. And for those that are small and medium-sized enterprises whose sales to Boeing are a significant proportion of their revenue, their staff are possibly worried as well.
But their unease is probably dwarfed by the apprehension being felt by Boeing’s own staff in its supply chain management (SCM) function.
Because that’s where the crux of the company’s problems lies.
The headlines might be about aircraft doors blowing out and engines losing thrust mid-air, fatal plane crashes, or fleets being grounded. But the reported underlying issues indicate systemic failures in the supply chain—shoddy supplier quality, parts shortages, materials defects, suboptimal manufacturing process control, poor handling and storage practices, …
Leadership responsibility
It sounds woeful. As if the company’s supply chain soul is at the brink of death and needs urgent resuscitation.
I don’t envy the SCM top dog right now, if indeed there is one.
And that may be part of the problem: lack of clear leadership responsibility and accountability.
According to the company’s website, one executive is “responsible for driving supply chain functional excellence across the enterprise through people, processes and tools.” Another executive “leads the focus on driving manufacturing excellence and adopting standardized best practices across the global organization.” And yet another “leads the focus on driving quality excellence and adopting best practices across the global organization … to ensure first-pass quality throughout the value stream, including the global supply chain.”
Any idea yet who has overall responsibility for SCM in the company?
Me neither.
This sort of blurred leadership responsibility isn’t uncommon with global companies.
Sometimes, it’s caused by the complexity of a company’s functional activities straddling multiple geographies, divisions, and business units. Sometimes, it’s driven by internal cronyism, politics, and the desire to protect turfs. Often, it’s just bad organizational design that also lacks integration and cohesion. And almost always, it reflects plain organizational stupidity.
Changing direction
There’s rarely any sound justification for more than one captain of a functional organization, even in a matrix structure. A ship like that is doomed to going down or getting lost at sea.
It certainly won’t embody effective governance and leadership, which is one of the traits of high-performance organizations.
In fact, it’s the keystone that holds everything together.
And it sounds like Boeing needs to fix everything in its SCM—the culture; people capability; supplier management and collaboration; production control and process capability; functional policies, processes, and other enablers, including the interplay between SCM teams and how they interface with other functions like engineering and product/program management; etc.
Boeing is not the first big company to face the pains of an existential crisis due to an ailing SCM capability. And it won’t be the last.
Like others before it, right now while its supply chain soul battles the brink of death, the possibility of recovery might seem tenuous.
Yet sick SCM functions can be turned around—even with global, complex, or multifarious organizations and activities—with the right person at the helm.
That, really, is the linchpin.
A seasoned helmsperson with a passion for troubleshooting will know from experience that the challenge will be tough and will demand persistence; just as it’ll require backing and support from the C-suite and boardroom.
Change leaders like this also know the importance of being patient.
An organizational turnaround is somewhat like changing the direction of a supertanker. It takes time to see the fruits of the toil at the helm.
A breath of new life
But the head honcho at the helm will only ever be as successful at the turnaround as their leadership team is capable and in step.
Aligning the organizational culture, operating model, and values is foundational to anything else. The SCM leadership team will be a critical avenue to infuse the entire functional organization with a culture that embodies and bolsters the turnaround intent, and to inspire and energize employees at all levels to bring their A-game to the challenge of transforming the supply chain.
That’s why the head honcho must determine which of the SCM senior managers need to go, and get rid of them quickly.
Refreshing the leadership ethos across the SCM function will be imperative.
And it may need to be as drastic as replacing a significant number of incumbents with external hires or promotions from within.
It may also need to extend through to other levels of management to revive and invigorate the spirit of SCM across the company.
Breathing new life and clarity of purpose into the SCM function will probably include stripping away all the nonsense usually found in big companies and dysfunctional organizations. Any nice-to-haves must be disregarded during the transformation, and dim-witted management fads or jackass ideas should be kiboshed.
Likewise, sacred cows, inflated egos, negative attitudes, or regressive behaviors at any level must not be condoned.
Turning the SCM function around requires going back to basics.
An extremely effective and hyper-focused leadership must specify the immediate vital few key priorities for the function.
These priorities must be trumpeted loud and clear in all corners of the SCM organization and the wider company, consistently and repeatedly. Even the secretaries, executive assistants, and the receptionist(s) should know what the SCM priorities are.
Without this clear, robust, and continued communication, it’ll be impossible to direct organizational attention and energy at the crucial levers of SCM transformation success.
The fundamentals—and luck
That communication is an essential vehicle to sustain employee engagement, commitment, and morale throughout the transformation journey.
It’s also an indispensable means of keeping the C-suite and board members informed, involved, and onside.
It should include the fundamental things to avert confusion, anxiety, frustration, or disharmony—like the identified root causes of the supply chain sickness, the specific cures to fix the problems and prevent recurrence, a sound plan of approach, expectations of performance and behaviors, measures of success, regular progress updates on the journey, etc.
And it must include listening, which perhaps is the most important part of communication.
Whether it’s at Boeing or any other business, any seasoned SCM head honcho with the requisite leadership chops will know that resuscitating an ailing supply chain takes more than what’s encapsulated in these few hundred words.
They’ll know, for example, that no matter how sexy the improvement plan is, executing the actions with effectiveness is cardinal.
They’ll also know that it’s impossible to drive the transformation from the comfort of their executive office—they’ll need to get out there in the trenches as often as possible.
And they’ll know, too, that luck may be a factor in a successful recovery. So I wish Boeing’s SCM top dog lots of good luck—if indeed there is one!
