Saturday, May 9, 2015

A634.7.4.RB - Ethics and Behaviors


Boeing is a company of incredible, fascinating and amazing people working in one of the most exciting industries in the world - aerospace. Considering the many accomplishments, creativity and building a foundation of innovation, from designing and building the earliest biplanes to creating and supporting today's supersonic aircraft and spacecraft, one might think Boeing would be content with how far the company has come. But a company of  Boeing's size (166, 000 employees worldwide) and scope ($95 billion 2014 revenue) doesn't succeed by resting on its laurels and being complacent; Boeing is constantly re-examining capabilities and processes to ensure that the company is as strong and vital as heritage. In fact, the culture mirrors the heritage of aviation itself, built on a foundation of innovation, aspiration and imagination. (Boeing, 2015)

The Boeing Vision is: People working together as a global enterprise for aerospace industry leadership. How will we get there?

  • Operate as One Boeing
  • Deliver customer value
  • Lead with innovation
  • Fuel growth through productivity
  • Leverage global strength

In order to realize our vision, Boeing considers where it is today and where it would like to be tomorrow. There are certain business imperatives on which Boeing places a very strong emphasis.

  • Detailed customer knowledge and focus
  • Technical and functional excellence
  • Large-scale systems integration
  • Lifecycle solutions
  • Lean global enterprise

Boeing Values

Boeing is committed to a set of core values that not only define who it is, but also serve as guideposts to help the company become what it would like to be. Boeing aspires to live these values every day.

Integrity

We take the high road by practicing the highest ethical standards and honoring our commitments. We take personal responsibility for our own actions.

Quality

We strive for first-time quality and continuous improvement in all that we do to meet or exceed the standards of excellence stakeholders expect of us.

Safety

We value human life and health above all else and take action accordingly to maintain the safety of our workplaces, products and services. We are personally accountable for our own safety and collectively responsible for each other's safety. In meeting our goals for quality, cost and schedule, we do not compromise safety.

Diversity & Inclusion

We value the skills, strengths and perspectives of our diverse team. We foster a collaborative workplace that engages all employees in finding solutions for our customers that advance our common business objectives.

Trust & Respect

We act with integrity, consistency, and honesty in all that we do. We value a culture of openness and inclusion in which everyone is treated fairly and where everyone has an opportunity to contribute.

Corporate Citizenship

We are a responsible partner, neighbor and citizen to the diverse communities and customers we serve. We promote the health and wellbeing of Boeing people, their families and our communities. We protect the environment. We volunteer and financially support education and other worthy causes.

Stakeholder Success

By operating profitably and with integrity, we provide customers with best-value innovation and a competitive edge in their own markets; enable employees to work in a safe, ethical environment, with a highly attractive and competitive mix of pay and benefits, and the ability to further share in the company's success; reward investors with increasing shareholder value; conduct business lawfully and ethically with our suppliers; and help to strengthen communities around the world.

(Boeing, 2015)

Boeing believes that the same behaviors that drive strong performance – leadership, openness, accountability and inclusion – also enable a robust and effective ethics and compliance program. Ensuring that the Boeing values remain foundational to our work reflects a daily commitment from every employee who wears a Boeing badge. This message is delivered by the chairman each year with a videotaped message to every employee, and in numerous external remarks given by senior leaders in various forums.

While each employee is accountable for upholding our Code of Conduct and following all applicable laws, regulations and company policies, Boeing advances its unified approach to ethics and compliance through the integration of four key functions: Ethics and Business Conduct, Global Trade Controls, Corporate Audit and Compliance Risk Management. These organizations constitute the Boeing Office of Internal Governance (OIG).

This integrated group creates a sustainable advantage for Boeing by enabling compliant company performance while building on its legacy of integrity. The nearly 500-person team of professionals focuses on:

  • Advancing an open, accountable and transparent culture;
  • Independently and objectively evaluating processes and controls;
  • Leveraging One Boeing through strong integration and collaboration;
  • Applying expertise, business acumen and strong functional discipline; and
  • Educating, training and informing Boeing employees worldwide.

(Boeing, 2015)

Speaking up is a cornerstone for building an open and accountable workplace culture. Boeing believes that creating an environment where employees are comfortable raising issues and concerns without fear of retaliation enables openness which can lead to improved business performance and inspire greater innovation. Boeing maintains policies and procedures to encourage employees to report concerns and seek guidance, using confidential and, when preferred, anonymous methods, including contacting local ethics advisors, using toll-free phone numbers and accessing web-based portals. Retaliation against employees who raise concerns is not tolerated and is cause for appropriate corrective action, up to and including dismissal.

(Boeing, 2015)

Unfortunately, there are several examples of unethical leadership.

 

In 2003, Mike Sears, CFO, and Darlene Druyun, Vice-President and Deputy General Manager of the Missile Defense Systems unit, were fired and both received prison terms – he for four months and she for nine. She sought and received a $250,000 a year job at Boeing while she was working as an Air Force procurement officer at the Pentagon. She and Mike Sears negotiated her position along with a $22 billion contract to supply the US Air Force with (100) 767 refueling tankers. Congress later cancelled the contract after the scandal was disclosed and went public. (Boeing, 2015)

 

In December 2003, the board of Boeing announced that it had accepted the resignation of Chairman and CEO, Philip Condit. Condit stated, “Accountability begins at the top”. (Boeing, 2015)   

 

The tanker program competition was reopened for re-evaluation and proposals to all airframe manufacturers including European Airbus. After an intense review and evaluation for several years, the 767 was selected as the winner. 

         

Harry Stonecipher, former Boeing vice chairman and COO, who also headed McDonnell Douglas when it merged with Boeing in 1997, was brought out of retirement to run Boeing. Stonecipher soon restored credibility to the aerospace giant along with increasing market valuation by over 50%. He also promoted corporate ethics as a top priority. However, it was then disclosed that Stonecipher was having an extramarital affair with a female company executive. The board ordered him to stop but he refused. He was then asked by the board to resign. The relationship violated Boeing’s code of conduct which ironically Stonecipher implemented and all employees must sign once a year. His “poor judgment… impaired his ability to lead.” "His downfall was that he failed to practice what he preached. ” (Boeing, 2015)           

So, what is the root cause of all these examples? It is entitlement, greed, self-interest and focus on oneself along with human nature and ego. And these examples do not demonstrate leadership in fact just the opposite. This is white-collar crime (WCC) and fraud. What is the fix? Ethics training, ethics curriculum and code of conduct and most importantly leadership by example. And regulation monitoring too, e.g., Sarbanes-Oxley Act.      

References

Boeing (2015). Available http://www.boeing.com/

YouTube (Poster, The Ethics Guy; Uploaded August 24, 2012)

https://www.youtube.com/watch?v=eLxbHBpilJQ

 

YouTube (Poster, Chuck Gallagher; Uploaded January 27, 2013)

https://www.youtube.com/watch?v=gUJ00vNGCPE

 

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