The Problem of the Strategy, Culture, Change & Filters
Post 6 of 13
Author: Peter Jay Sorenson CMC®, StrategicOrganizationDesign.com
Stickhandling in a Hidebound Culture
30 August 2013
The Old “Circle B” (that’s what we called Boeing in the farm country of Eastern Washington) was an internally focused, engineering driven, command and control organization that had been a long-term, highly successful enterprise. However, the Boeing culture of the 70’s and 80’s was becoming hidebound.1 The highly structured authoritarian management approach and the intense “over the transom” silo structure and culture made it difficult to conceive of and execute innovation.
These are the characteristics that drove Lockheed Martin to establish the intrapreneurial2 organization called the “Skunk Works”3 in the mid-40’s.
To create an environment to support and protect innovation you usually have to move out of the mainstream organization into a setting that has an open culture, open communications (without filters), and a structure that is more horizontal, process, and customer focused, rather than hierarchical and vertically focused.
You have to create an environment in which you can create and protect a new organization that is based on radically different assumptions, values, and approaches.
That was the logic behind the proposal that Phil Condit and Alan Mulally stickhandled4 through the Circle B senior leadership to create a separate enterprise within Boeing so that they could design and produce the Boeing 777, a two engine, wide bodied, long distance commercial passenger aircraft. By intentionally designing the new enterprise to support the innovation process they completely side-stepped the culture and filters of the Old Circle B.
The crux of the issue in this project was that the Old Circle B approach was not able to cope with the complexity presented by the evolving customer requirements, emerging design and production technologies, and increasingly competitive marketplaces. Had they stuck with the Old Circle B approach the project would have taken much longer, been much more expensive, would have been plagued by quality defects, and would have increased the total cost of ownership of the aircraft for Boeing customers.
The Boeing 777 Team lead by Condit and Mulally made four significant sets of organizational innovation that made the success of the 777 possible. They:
- Instituted an Integrated Product Development and Manufacturing Process
- Organized Design-Build Teams as the Basic Unit of Operation
- Created an Interlocking Team Governance Structure
- Heavily Used Large Scale Meetings
The purpose of these approaches, in addition to performing well on speed, cost, and quality measures, was to build long term organizational capabilities5 to sustain success for Boeing in the increasingly complex, highly competitive future. These approaches are about creating durable processes and structures that would support a horizontal, customer focused organization.
In this case example please compare and contrast the Boeing approach to the 777 with Jamie Houghton’s approach at Corning, the approach in Quinn’s cases, and the “Said versus Done Case” contradiction. These cases form an interesting map of how intentional strategic organization design is an approach that builds fit between the social and technical components of the organization and the customers and marketplace of an organization’s external environment.
1 Hidebound: stubbornly prejudiced, narrow minded, or inflexible (The American Heritage® Dictionary of the English Language – 4th Edition – Deluxe Smart Phone App)
2 Intrapreneur: A person within a large corporation who takes direct responsibility for turning an idea into a profitable finished product through assertive risk-taking and innovation. (The American Heritage® Dictionary of the English Language – 4th Edition – Deluxe Smart Phone App)
3 Croll & Yoskovitz, “Lean from Within: Intrapreneurs,” Lean Analytics, Chapter 30, pqg3 371, O’Rielly, 2013 and http://en.wikipedia.org/wiki/Skunk_Works
4 Stickhandling: From hockey; to deal capably and swiftly with a situation, especially in a manner which deflects potential problems (The American Heritage® Dictionary of the English Language – 4th Edition – Deluxe Smart Phone App)
5A Note on Organizational Capabilities:
Individual people have competencies (knowledge, skills, abilities, attitudes, and experience). When you get a gaggle or pod of people together in an organization those individual competencies can add up to an organizational capability.
Organizational capabilities are important.
A friend recently told me about an international project he is working on to develop a partnership in Asia. He led a project team to visit all the aerospace companies in an Asian country to assess their organizational capabilities. To be a partner with the US-based company the potential partner company had to demonstrate that they had a minimum set of capabilities. He and his team had prepared a list of the capabilities needed, the necessary evidence to establish the existence of those capabilities, and an assessment process to demonstrate those capabilities. Successfully demonstrating those capabilities through the structured assessment process would open the door for the potential partners to participate in the partnership process and a long term set of projects. Without successfully demonstrating that they had these organizational capabilities these organizations would not get the business.
Strategy is a necessary component of running an organization. Organizational capabilities are a necessary component of a strategy. If you do not have the capabilities required to execute a strategy then your strategy is just a pipe dream. When you have the capabilities you can get into the doorway to a well executed strategy. But the hard work follows. Organizations need to create internal assessment processes to identify their organizational capabilities. And they need to establish plans and take actions to grow and solidify those capabilities. No strategy can succeed unless it is built on a foundation of organizational capabilities.