An engineering company run by a longtime manager with a background in accounting is in large part how Boeing got here. Fire the guy and get someone with a technical background in there.
I'd argue they need an effective engineering culture, and leadership that enables and values and fights for it, not a former-engineer figurehead. Good engineers within Boeing need to be enabled to do their job properly, within normal business constraints, and bad engineers need to be removed. The business needs to understand that good engineering is a necessity and a profit centre in aerospace.
I don't know how they'd achieve this change. The company seems to have rotted from the head down since it merged with McDonnel Douglas, and its possible that the senior leadership lack the self awareness to comprehend the problem.
If the pre-MD Boeing management had managed to retain control of the company things may have been ok from a quality and safety perspective... but the stock would have declined because they would have refused to chase short-term quarterly success at the expense of the long term.
And was still in charge of 7E7 (today's Dreamliner) when the excessive outsourcing and cost targets began.
Cultural change goes much deeper than changing the CEO. Boeing might not be salvageable on the cheap side. Decapitating the company at levels 1-4 may not even be enough. It may require acknowledging that changing the flight envelope and software-patching it was a mistake.
This is a major can of worms on itself. This means a plane redesign, 6-8 years delay, and probably another round of WTO-unfriendly subsidy.
The myth that engineers make better leaders may have originated with Andy Grove.
In truth, there is no evidence for the claim. Jack Welch was as much an engineer as an asshole.
Quite possible, and what's really ironic is that Grove's successor, Craig Barrett (who helped start the company with Grove), also an engineer, was a terrible CEO. He was the one who made a bunch of bad moves: P4/Netburst + RAMBUS, Itanic, refusing to adopt amd64 or make their own x64-64 ISA before AMD, etc. The company did poorly under his leadership and only turned around when his successor, Paul Otellini (an accountant IIRC) took over and moved to the "Core" CPU architecture.
Turned down for the Boeing CEO position, went to Ford and carried them through the Great recession as one of the big 3 auto makers that did not need a govt bailout.
I'd say call him back, but he's probably enjoying retirement by now.
Someone with an engineering background and a pinch of Vlad the Impaler;)
If you approve of Elon as a leader, he is basically the embodiment of “you do not need to be an engineer to run a highly technical company”
A look at Tesla build quality, or that ridiculous demo where the Cybertruck window smashed are just two things that immediately come to mind to cast doubt on Musk’s commitment to engineering. I think he’s a big picture guy, I absolutely think issues like those we're seeing with Boeing could happen under his watch.
Edit: airlines don't build planes
To me, it is the way of looking at the world that attempts to transform intractable real-world problems into tractable ones by translating them into the battle-tested model(s) of your field. For example, the RLC model of circuits is certainly not able to express all of EM physics but it sure is easy to solve problems in (although, I only did the degree, maybe working engineers dip back down into physics more often).
Anyway it isn’t obvious how Musk has that mindset, he seems obsessed with innovation rather than tradition, and he seems to have styled himself as some kind of polymath tech guy rather than an expert in any particular field.
Your point about transforming intractability is cogent and I think we agree. To your last point about polymath tactics, you're right to a degree, but you can also watch Everyday Astronaut's SpaceX factory tour and realize that it's far more than a basic understanding, which is probably a big part of SpaceX's wild success.
If the anecdotes are accurate, and based on your own description, it seems Elon Musk is a CEO who makes an effort to thoroughly grasp the products his company develops. That's commendable. This doesn't necessarily make him even a small-e engineer, even in the context of the broader definitions used today. It certainly doesn't make him "someone of engineering lineage," as the original comment implied was essential for Boeing's success, or even "someone with an engineering background" like the comment I replied to.
It's also certainly not clear that Elon has an engineering-first mindset, nor that that would even be helpful for many of the businesses he runs. I can think of plenty of examples of Elon putting business above all else plenty of times, and I don't mean that as a dig: It's often the smart move for the monetary gain of all involved.
And just to be clear, this not a commentary at all on about whether Elon would be effective in running Boeing. To be blunt: I don't care about that conversation.
> It's also certainly not clear that Elon has an engineering-first mindset
If A, then B.
Struggle with definitions all we want, Boeing needs a dose of Musk's attitude towards engineering and manufacturing. It is the most important thing they do, and I don't think the C-suite understands that. That's the most distilled version of what I'm saying. Musk is the best recent example of this attitude, but Henry Ford is an excellent older example.
If Elon's thoroughly understands the products his companies develop, he has an engineering-first mindset? That logic would also apply to many CEOs we wouldn't consider "engineering-first" CEOs.
> Struggle with definitions all we want,
For me, this is the only discussion. My focus is not at all on whether Elon would be a good fit for Boeing. I don't give a shit about that conversation.
That's a personal attack. Talking about failures of planning in mass manufacturing, backlash due to public statements, and casual behavior about publicly traded companies and information related to them, those would be material criticisms that we can discuss civilly.
The claims of racism and inheriting some amount of money from a debunked emerald mine conspiracy aren't helpful on their own.
> debunked
Kind of? His dad was originally making the claim but is now saying something different.
> conspiracy
You have a weird definition of conspiracy.
There is zero evidence that Elon profited off the emerald mine his dad bought shares in, and the allegation is that he conspired to hide that money somehow. It's a normal definition of conspiracy.
They both have obvious consequences in a leadership position. Obvious consequences are enough.
> There is zero evidence that Elon profited off the emerald mine his dad bought shares in, and the allegation is that he conspired to hide that money somehow. It's a normal definition of conspiracy.
1. I have never heard this "hiding money" part of it so I don't think that's the crux of it.
2. "Some guy hid his own money" is not a conspiracy. This is baffling.
Obvious potential consequences are not enough. This is the richest man in the world, surely you have an example.
It's hard for someone outside a company to point to a direct consequence of racism in the company leadership. That doesn't make it not-bad for the leadership to be racist.
Surely you're not saying it's okay to discriminate as CEO if you make enough money.
And if you want a consequence of being thin-skinned, uh, anything to do with twitter? Half his interactions with the SEC?
What is PE?
If it's not Elon, it will probably be Airbus, and there is a chance that the US feds will want someone more America-based instead.
There are incompetent engineers, unethical engineers and there are engineers who are bad leaders.
But an accountant as CEO is not going to restore a culture of engineering excellence.
TBF, from my experience with VPs, technical background might be a hindrance to executives. The guy who used to work on databases worries about persistence, even though nobody raised that issue. Networking background? Oh well, good that I know why we put this many bits into this field, despite it only needs a couple bytes and we can afford megabytes. Sure, they know their job enough to leave enough time for the actual question. I even understand why they first interrogate the room about some arbitrary cog in the machine. Still makes me wonder if there aren’t better ways to do this.
This is certainly a point of contention in modern schools of business thought, but the concept of a CEO who doesn't understand what the company builds is bizarre to me.
The CEO of Boeing, IMO, should probably have aircraft engineering experience, and, ideally, also be a pilot with the suitable type ratings to fly the stuff they build.
And they should be open to "Hey, if you have engineering concerns about the airplanes we're building for the traveling public, you come to me!" style office visits. Someone with concerns about the "single sensor fault runaway trim" style system should have been able to bring it up, and have him understand it.
I know this isn't what Boeing has. And they've lost a lot. This is now increasingly clear to people outside aviation circles.
Why the pilot? When it comes to handling these machines, the pilots are one small corner. I would think that someone with experience keeping them safe and functional would be more on point these days. How about someone with the ratings for maintaining the machines? No pilot has ever inspected let alone installed a door plug.
Guess we run in different circles!
Can you be a successful CEO of a car manufacturer if you cannot drive a car?
https://atpflightschool.com/become-a-pilot/airline-career/ho...
>> also be a pilot with the suitable type ratings to fly the stuff they build.
Boeing builds airliners. The "pilot" in the context of this threat a pilot rated to fly the "stuff they build".
And, tbh, I don't care if the CEO of Boeing can take one around the pattern on their own. If they need a rated instructor with them to go fly one legally, so be it. Doesn't bother me in the slightest.
But I stand by my statement that the CEO should be able to understand airplanes and fly them reasonably competently, if they're the CEO of a company that builds airplanes. I don't mean "press release of them flying it straight and level on autopilot" - but to actually be able to get it competently around the sky in manual flight modes.
I consider the financialization (turning into loan servicers and financial service providers as their main stream of income) of "every company who used to build things" to be one of the worst things that's happened to American industry as a whole.
There is a misalignment of priorities that will never be fixed as long as the primary incentive for the CEO is to maximize shareholder value. If you remove that, and force the primary incentiven to be safety over profits, the rest of the business will follow.
If the CEO has no clue what the company does, those people could be blowing smoke up his/her ass
There has to be assurance of technical competency somewhere, and someone that has ultimate authority to get rid of the incompetent.
This doesn't disagree with your second sentence. The pursuit of profit seems to turn everything into a bank or gacha machine. Both safety and competency fall by the wayside.
He has to trust his CTO (whatever that title is at boeing for their top engineer manager) to be the judge of that. The incentives have to align wrt quality engineering for there to be trust all the way down to the junior most engineer.
A management accounting guy is great at hedging financial risks, but that is what they'll always focus on, not the real world. What we are seeing with Boeing now is what happens if leadership is adrift without a good intuition about real world physical risks and what it takes to address them. You can't maximize profits while regularly causing catastrophic events.
He should probably know enough to sense if the people who report to him are talking nonsense or not, and to properly weigh what they say.
I mean, what's going to happen if two technical leaders have a disagreement, and all he knows is how to count beans? How could someone with that background make an effective decision in that context?
People also tend to fall back on what they know in unfamiliar circumstances, and I don't think you want an aircraft-manufacturer CEO falling back on picking the "cheapest option" and accepting am unappreciated safety risk in the process.
In every case? No. Not every business, not every industry needs that.
In cases where the company builds machines that millions of people every day depend on to not die, yeah, the leadership should probably know some of this, if only to be able to realize when someone is trying to blow smoke up their ass.
Yeah, he should probably trust the people below him, but the cost of having that trust be violated is way too high. The consequences aren't just a bunch of people losing their jobs, maybe local business being depressed because the nearby widget factory closed. The consequences are airplanes falling out of the sky and lots of people dying. So he needs to be able to verify that the information being given to him, that he's trusting, is actually trustworthy.
And nevermind the economic effects here. If people stop trusting certain aircraft as being safe, they're not going to care whose name is painted on the fuselage.
The best bosses I've worked for are the minority who took the time to understand at least some of the technical side of things.
I'm always struck by the fact that I, as a lowly dev, am expected to understand the business yet the suits floating far above me think they don't need to know what actually happens down below. Bad mistake. Lack of knowledge is never a good thing.
But it seems just as likely that an accountant as CEO would be unable to detach from irrelevant details about accounting systems, cost savings, tax classifications, or whatever it is that low-level accountants worry about.
Frank Borman, chosen for Gemini and Apollo missions, "earned a Master of Science degree at Caltech in 1957, and then became an assistant professor of thermodynamics and fluid mechanics at West Point." [Wikipedia]
"After retiring from NASA and the Air Force in 1970, Borman became senior vice president for operations at Eastern Air Lines. He became chief executive officer of Eastern in 1975, and chairman of the board in 1976. Under his leadership, Eastern went through the four most profitable years in its history...." [Wikipedia]
Moving the deckchairs in the boardroom isn't going to solve systemic problems in a company.
Well, that really means tearing the company up completely. I can't see how a new board could effect reform. And replacing all the middle management would destroy the company.
And as you say, it takes time for a new culture to move through the layers; but the PO doesn't have time. Does Boeing? I realize the companies are very different, but both have marinated in an unhealthy culture for a long time.
Because that's how the CEO makes big change happen: management -- from the C-suite down to line managers -- needs to get on board with that change. If they refuse, they get fired and are replaced by people who will carry out the change. If this process will take too long to save the company, then... again, maybe the company needs to fail.
Take a simpler thing: if a new CEO sets an example of taking a decent amount of time off and promoting that as what people should be doing, because they value mental health, then that will gradually trickle down into upper and middle management, and down to the rank-and-file.
Management types who resist that will be replaced or marginalized, because this aspect of culture matters to the CEO and this is something they want to promote. It won't happen overnight, but ultimately management will be filled with people who are taking solid amounts of vacation and push their reports to do the same.
A CEO that wants to push an engineering-first/safety-first culture will be firing executives and management types that try to hide problems or push through things that don't meet the quality bar that the CEO is looking for. This sort of shift will not happen overnight. It can take years. Whether or not a company like Boeing can survive this sort of change, and if they even have years left to make that change, is another question, of course.
But I argue the opposite: the CEO (critically, with the unwavering support of the board, which requires the support of shareholders) is the only person who can make this sort of shift.
Plausibly, yes.
> ... and short term traders.
Nope. Not even on the radar. Stockholders, maybe. Not short term traders. Short term traders have no say on the makeup of the board, nor on executive compensation. They therefore have zero input into the direction of the company.
And that’s the crux of the problem. They actually need one another but the egos on both sides refuse to acknowledge that.
Trying to figure out what to do in any given business situation is usually challenging because the devil is in the details. It happens that in this particular case, Boeing should be checking that their supplier installs bolts and drills holes correctly because their supplier has screwed it up so many times. But in a lot of industries, cheaping out on materials is a reasonable thing to do if your customers agree it's a reasonable thing to do and it's not going to kill anyone.
It sounds like Boeing has mastered the art of https://en.wikipedia.org/wiki/Muntzing ... at 30,000 feet.
Accounts ask how much things cost and go from there. MBA's figure out how much things need to cost to make their spreadsheet work and tell you that's what you get.
Which is what happened at Boeing. They told the engineers they were going to develop the 787 for half the cost of previous models (we are very very smart). And it took twice as long and cost twice as much. Given that they couldn't afford a clean slate redesign of the 737 even if they wanted to. The result is the 737 Max which will cost them more than a clean redesign would have.
A 7B7 greenfield narrow body plane would probably have been faster to design and a better plane in lots of "don't lie to the pilot and fly into the ground when a sensor is busted" ways, but would have required all airlines to re-certify their pilots, which is both expensive and would have caused the airlines to consider airbus and boeing on the merits...
So the MBA's cost the stockholders money there too.
corp accountants don't care about cutting costs, we just care about making sure things are presented/tracked in accordance with gaap
we may help identify/track costs but we aren't usually tasked with cutting costs
The CEO may set the culture, as much as that is set from the top down, but by the time a company actually starts having problems visible to the outside, its entire suite of executives, VPs, etc, have optimized their career for the sort of problematic attitude the previous CEOs demanded.
This would likely result in a CEO with no pull and a CFO that had all the hard power to call the shots.
The reality seems to be, for some reason, building profitable and safe planes in America is becoming increasingly difficult.
A company most be able to do both: build a quality and safe product and make a margin. It can’t exist without revenue.
I’m guessing the real problem is somewhere between low quality or overworked and poorly trained line workers, complex systems, and a revenue strategy that obscures what the company is selling.
It takes more than a random ic manager to fix that — but I agree they should come from that past maybe.
Is there another data point or are you just basing this off Boeing's issues?
Gulfstream doesn't really count I think, because it isn't in competition with either Boeing or Airbus.
Other people with a similar perspective about rockets tried to convince Musk that as well. Thankfully he didn’t listen. You’re never going to realize gains that surpass the return on the S&P if you don’t take risks in business.
Think what you will about Musk, but SpaceX has completely revolutionized space travel and will be in the history books a hundred years from now.
Throw an unlimited supply of darts and you're going to get a few bulleyes. Doesn't make you the worlds greatest dart's player.
You say dozens and name two, one of which (X) is still up and running with active user engagement. Many people have thrown darts, none have developed self-landing reusable rockets and outcompeted ULA or developed a satellite based global internet provider. Not even Google at its peak was able to come up with anything better than Project Loon. I’ll concede there’s a little luck in every venture, but what Musk and SpaceX have accomplished is well beyond luck and quite remarkable.
But aside from that, and the two examples above, 1. x.com (the original) 2. tesla has been killing way more people since he retroactively became a founder (there was a delay while existing products moved through the pipeline) 3. solarcity 4. optimus 5. neuralink (well, ok, it hasn't failed yet. But _I'm_ not betting on it...) 6. the Tham Luang cave rescue 7. crypto 8. his relationships with his kids / exes
TBF, spacex appears to be his baby, and it has done _much_ better than I ever thought it would. There are rumors about the existence of a whole team there preventing him from breaking things, and personally, I believe them. But I have nothing _remotely_ like proof. And even if those rumors are true, spacex appears to have been his idea, he hired the first batch of people, etc. He can definitely take loads of credit for it, even if I don't think he deserves as much of said credit as he clearly thinks he deserves.
Surely there are better examples of failures than these? Personally, I would have focused on "FSD". That one has been a huge debacle with a lot of potential to get worse.
And I don't think the usual "throw shit at the wall until something sticks" thing applies to Musk. Certainly he's had some things that slid to the floor, but he hardly has an "unlimited" supply of darts. And even if his finances were infinite, he still only has 24 hours in a day, and can only focus on a certain number of things. By and large, the things with a lot of his focus do seem to be doing pretty well.
Twitter is clearly a huge blind spot for Musk; while I'm not going to dismiss it out of hand, it does seem like an outlier. Regardless, it's still running, somehow, when I expected it to have been shut down by the middle of last year. While I know people who have stopped using it, I know more people who still use it and get value out of it, regardless of the negatives since Musk bought it.
SpaceX achieved impressive things, the over glorification so rubs me the wrong way. And equalizing SpaceX successes with Musk a person does way more than just rub me the wrong way.
It got us to a place where the cost of a rocket launch is 10 times less than it was before, and soon it will get us to 100 times less. It's just a matter of time that this is leveraged to bring us to new physical places.
> And equalizing SpaceX successes with Musk a person does way more than just rub me the wrong way.
He is the person that single-handedly made the decision to start a rocket company, decided on the initial architecture, hired the key people and finance the whole operation.
As will Theranos. That's not really a great indicator of how good or useful something is.
Boeing profits and sales had been on a steady upwards trajectory for 20 years until 2019:
https://www.helgilibrary.com/charts/boeing-profits-sales-qua...