Why we care if Boeing is among the 'most admired'

Fortune magazine's annual lists of "America's Most Admired Companies" came out last month. Boeing ranks No. 5 on this year's list for the aerospace and defense industry--up one spot from last year but still behind United Technologies, Lockheed Martin, Northrop Grumman and General Dynamics.

Our supplier/partner General Electric is No. 1 on this year's all-industry top-10 list. Boeing hasn't been in the overall top 10 for 13 years.

I think we can do better.

Rest assured, I don't want us to become fixated on moving up in these lists. But I would like to see us become more consistent in the practices that cause companies to be admired--strengthening our leadership and accountability, driving growth and productivity at every level, making ethics and compliance one of our competitive strengths, developing our people, and giving back to our communities. It's what's behind being admired that counts--a combination of performance and behavior.

It all starts with leadership. Boeing already has great people and excellent leaders. But I want to help strengthen today's leaders and mold the next generation to be even better. I fundamentally believe that better leaders make a better company. If we can create an environment where our people grow, our company will grow--by every measure, from revenue to reputation.

I want Boeing people to be aware the Executive Council and I hold high expectations for everyone in the company ... and have raised the bar even higher for those who lead. We have done this by adopting a new Boeing leadership model that not only defines leadership but also builds it into the Human Resources systems and the processes that drive pay and promotion.

First, we have defined a set of attributes that personalize the behaviors we expect our leaders to embody. Boeing leaders must chart the course, set high expectations for themselves and their teams, inspire others, find a way--an ethical way--to overcome challenges, live the Boeing values and deliver results. These are simple but powerful expectations that permit no tradeoffs between values and performance.

Next, Boeing requires leaders to model, teach and expect good leadership. This year, leaders are learning to assess themselves and their direct reports on the above attributes. By 2007, how well they lead will become a factor in determining their compensation.

We also have required the top 260 or so leaders--vice presidents and above--to take some extra actions in terms of ethics and compliance.

• By March 31, they should have completed all available mandatory compliance training for the year. (I took my compliance training in January.)

• They should be encouraging open, candid and nonintimidating discussion about ethics and compliance at every opportunity, including staff meetings. We expect Boeing leaders to ferret out problems, not hide from them in the bureaucracy.

• And they should have identified three areas for improvement in terms of ethics or compliance--whatever is important to their organizations. They and their teams should be working already to address these issues or risk areas.

Finally, we expect leaders to engage every person in the company to contribute to Boeing's four growth and productivity initiatives (for more about the initiatives, see the February and March 2006 issues and Page 9 of this issue).

I realize we're not going to do all of this overnight. But it's important that we take our obligations very seriously and start making these changes now.

Let's think of this in terms of aspirations: Five or 10 years down the road, I'd like for Boeing's leaders to be even better than they are today. I'd like to see the initiatives embedded in the way we operate every day. That will help our businesses win greater market share and improve our financial results. I'd like for Boeing people to have regular opportunities to develop their skills and abilities. And I'd like to see better business results every year between now and then.

I think if we do all that, Boeing could be the most admired company--not only in aerospace, but in the United States and the world.