Strategies + execution = success

Phil Condit
Chairman and CEO

To be successful, a company has to do two things: operate from a strong, robust set of strategies, and execute those strategies flawlessly.

I think we've absolutely got the right strategies. Not everybody agrees, though. While this year's companywide employee survey reflected strong positive trends, especially in employee satisfaction, two questions showed a decline from last year. One asked whether senior executives are clearly communicating the company's strategy (43 percent said yes, down 2 percentage points from last year). The other asked whether people agree that the company is making the changes necessary to compete effectively (36 percent agreed, down 3 points from last year).

This says to me that either people aren't aware of our strategies, or if they are, they have a different idea about what we ought to be doing and where we ought to be heading.

What I would like to do is increase awareness and understanding of our strategic direction. So whether you agree with those strategies or not, it is important that every Boeing person perform in a way that helps us carry out those strategies.

Strategies are roadmaps. They define, “Where we are going. Why we are going there. What path we are going to take to get there.” Execution is the driving. One without the other doesn't work. If you have a great set of roadmaps but don't drive, you're not going to get where you want to go. If you have great driving skills but no map, you may have fun but you won't reach the destination. You really have to have both.

Boeing operates with three broad, companywide strategies, and each business unit has more specific strategies that support these, too:
• Run healthy core businesses.
• Leverage our strengths into new products and services.
• Open new frontiers.

Running healthy core businesses is primarily about execution, and it's always at the heart of any company. How do we operate a lean global enterprise? How do we invest in our people? How do we get our costs down? How do we satisfy our customers? How do we encourage lifelong learning? How do we make sure that we are competitive in a tough marketplace? How do we engage with our communities? How do we ensure Boeing people contribute their energy and ideas toward the company's success, and how do we apply those talents and ideas? How do we return value to our shareholders?

Our core businesses are essential to our future. They are key to creating the financial health that allows us to do those things that will make our company healthy over the long term. Healthy core businesses generate the cash that enables us to do good things for our people, customers, communities and shareholders now; invest in research and development for future health and growth; and fund the acquisitions that will strengthen our ability to execute our strategies.

Examples of core businesses are programs such as F/A-18E/F, Next-Generation 737, C-17, 777 and Delta II.

Leveraging our core strengths to develop new products and services helps get us into new or expanded markets. The strengths of our fundamental businesses enable us to do network-centric initiatives—things like Future Combat Systems and unmanned combat air vehicles. Today, I would also put Connexion by Boeing in this category. And 7E7 fits into this strategy because it leverages everything that we have learned about lean, determinate assembly and composite technology.

I would classify Air Traffic Management as one of the ways we're opening new frontiers. Not only are we figuring out how to use our technology in new ways, but we're helping ourselves build markets for our core businesses. So, for example, if we can design and develop a better air traffic system—change it from today's ground-based radar system to a satellite-controlled automated system—not only can we make the commercial airplane market bigger, we can also enable unmanned military vehicles to operate in different markets, such as homeland security.

By looking to our future, we're not abandoning either defense platforms or commercial airplanes; we're gaining more capability. Programs that today fall into the second category—leveraging our strengths into new products and services—will, with great execution, become core businesses. New frontiers efforts will move to developing new products and services.

I plan in the future to talk about business unit strategies so that everyone can see the roadmap and our planned destination.