Today I wanted to cover my thoughts on the slow transference of purpose it seems many public companies undergo. Most recently I cannot help but focus on Boeing. While the company is certainly not unsuccessful, I see elements of their public failures as actionable lessons learned for anyone who is paying attention. I'm not going to just talk about Boeing, they have enough people lining up to flog them. I also want to discuss Kmart and Sears.
Losing the Why
Boeing used to be the best airplane manufacturer. Period. They had the engineering chops, the manufacturing skill, and the business knowhow to tie all this into one hell of an execution. Why has this changed? Why has their board allowed the situation to become as it exists?
Kmart was the pinnacle of retail operations. they were crushing their markets everywhere they built a store. Arguably, based on Kmart failing to identify its ideal market space, there never was a properly articulated why to start with. Kmart eventually drifted into obscurity and failure after numerous failures to shift strategies, react to competition, and to implement change in time.
Sears was the anchor store for malls across the country. Their house brands weren't the common garbage we see today, they were the name in their product category. Craftsman. Kenmore. DieHard. Sears began as a mail order operation. It could be argued they were Amazon before Amazon was Amazon. Yet they too, lost their way and failed.
Considerations
All three of these organizations have lost their why. Boeing appears to have little interest in making airplanes any longer. Many of the primary structures in their planes are outsourced. They are an assembler yet have somehow divorced from key competencies they once had. I think a good indication of why is the lack of engineering leadership at the executive level.
Kmart didn't understand why targeting everyone means nobody wants to show up. Kmart also dismissed Walmart outright. They weren't prepared for their competitors to out play them.
Sears didn't seem to get the idea of online shopping until it was too late for them. Their struggle to survive lead to some pretty awful venture capital situations. My favorite is certainly where they sold all their property and got to rent their own stores from the buyer.
What tells me the why is gone for Boeing is their output. Deming was astute in his observation of systems. Each one is optimized for exactly the output you are receiving. Boeing has some odd quality issue every few years. Sadly, sometimes this means a bunch of people die. Similarly, their Star Liner capsule can't seem to get off the ground despite billions in external funding and years past the delivery date. These types of problems indicate culture is not where it needs to be. Where culture has failed, leadership is at fault. Leadership must steer the ship and without the correct why there is no right direction.
The gig has been up for Kmart and Sears for a few years now. I believe both started with a good why. In the end Sears seemed to keep their why for longer. Kmart didn't really establish one properly to start. When the purpose of the organization dies or gets lost, no amount of reorganization can fix it.
Root Causes as I See Them
I like to tie my posts to W.E. Deming's work, so here it is. My assessment of how Boeing shares commonality with the two failed ventures of Kmart and Sears include loss of constancy of purpose, failure to enact leadership, focus on short term goals.
Constancy of purpose. There is a reason this is #1 on the Deming 14 points. You just cannot avoid this. Every business has a purpose. You abandon purpose at your peril. Boeing seems to notice this once in a while. Hopefully they can notice it going forward.
Quality issues downstream point at culture issues upstream. Culture is a leadership job. You could argue their only real important function. Culture is driven by purpose and must be articulated by leadership. So if you are a leader, know the organization purpose inside and out. Be seen acting on this purpose at every level of the organization.
Short-term focus will kill you. An unfortunate byproduct of publicly traded companies is the quarterly report. too often, long term projects are sacrificed at the altar of quarterly returns or goals. It may be argued there exists a dangerous conflict of interest between the customer and shareholders. Especially when leadership will make choices that serve the owners but no the customer or the organization to improve short-term returns. This speaks to loss of purpose, poor leadership, and short-term thinking. Fun fact, shareholder dividends are not the purpose of a company. Publicly traded businesses seem to overlook this from time to time.
Prevention
Stay the course. Find your purpose. Integrate your purpose into everything you do. Lead. Understand the entire chain of customer inside and out for your business. Learn how to best serve all of them. make your plans for longer than this year. When you plan at least five years is the metric. Obviously they will change, the point is you are thinking farther than you can see. You will put yourself in a better decision making sense to do this.
Start. Somewhere.
My program starts with why. The first question is why. Why are you doing the thing we are looking at improving today. Solid purpose enables proper leadership. Proper leadership can promote long term thinking. All these components build capable organizations.
If you're struggling with your why, or how to enact leadership, or how to plan long term, I can help you. My programs are simple, to the point, and teach you to be self sufficient. You can be on the right track in as little as 30 days.
Let's start today. With purpose, leadership, and commitment.
