Stories in Your Organization
Gregory Rutbell
26 October 2013
Embry-Riddle Aeronautical University - Worldwide
Campus
Management lessons through storytelling - The Boeing 707
Setting Big Hairy Ambitious Goals
At the dawn of the jet age Boeing, one of today's dominant makers of
commercial aircraft, was a nonentity in the business of building planes for
airlines. That's right. In the years following World War II, when U.S. industry
was retooling for civilian production, Boeing was primarily a maker of military
aircraft. Until the early 1950s, Boeing focused on building huge flying
machines for the military. However, Boeing had virtually no presence in the
commercial aircraft market. McDonnell Douglas had vastly superior abilities in
the smaller, propeller-driven planes that composed the commercial fleet.
In the early 1950s, however, Boeing saw an opportunity to take on
McDonnell Douglas by marrying its experience with large aircraft to its
understanding of large engines. Led by Bill Allen, Boeing executives debated
the wisdom of moving into the commercial sphere. Allen had a vision: that
consumers would embrace the speed, convenience and comfort of jet travel, and
that the real growth would not be in the defense industry but in the civilian
sector of the booming global economy. They concluded that, whereas Boeing could
not have been the best in the commercial plane market a decade earlier, the
cumulative experience in jets and big planes they had gained from military
contracts now made such a dream possible. They also realized that the economics
of commercial aircraft would be vastly superior to the military market. They
were just flat-out turned on by the
whole idea of building a commercial jet.
So, in 1952 Allen and his team made the decision to spend a quarter a
quarter of the company's entire net worth to build a prototype jet that could
be used for commercial aviation. Converting to jet technology would require a
massive investment that could pockmark their bottom line. They built the 707
and launched Boeing in a bid to become the leading commercial aviation company
in the world. Three decades later, after producing five of the most successful
commercial jets in history (707, 727, 737, 747, 757), Boeing stood as the
greatest commercial airplane industry, worldwide. Since then, Boeing has added
the 767, 777 and 787 Dreamliner which are revolutionizing flight.
The 707 grew to become as much a cultural icon as a transportation
vehicle. The swimwear company Jantzen called its swimsuit line "the
707." Every U.S. president from Dwight D. Eisenhower to George H.W. Bush
flew on an Air Force One that was a modified version of a 707. The
transformation for Boeing was complete. In later years its wide-bodied 747
would dominate long-haul and international travel. Its smaller 737 would become
the workhorse of airlines around the world, a reliable, cost-efficient aircraft
whose standard parts remain widely available. Boeing so thoroughly bested its
erstwhile foe Douglas Aircraft that when Boeing bought McDonnell Douglas (the
result of an earlier merger), it was primarily to boost its military offerings.
In this way, Boeing returned to its roots, a reminder of where it had been
before the 707 changed everything for the company - and transformed the history
of aviation.
When Allen decided to launch the 707, he had no orders in hand. He simply
bet big that that Boeing could produce - and that consumers would buy. His
gamble on the 707 foreshadows Steve Jobs' going by his gut to create the iPod,
the iPhone, and the iPad before many customers had even conceived them. It
takes courage to wager a company's future on a vision: Allen showed us how -
and changed the history of aviation.
References
Collins, Jim (2001). Good to Great:
Why Some Companies Make the Leap...and Others Don't. New York City: HarperCollins Publishers.
Harnish, Verne (2012). The Greatest
Business Decisions of All Time: How Apple, Ford, IBM, Zappos, and Others Made Radical Choices That Changed The Course
of Business. New York, New
York: Fortune Books.
No comments:
Post a Comment