Chief People and Administration Officer
The Boeing Company
"Collaboration, Education and Competitiveness"
Chicago Council on Foreign Relations
Young Leaders Exchange
May 15, 2002
Thanks, Marshall. And good evening everyone.
On behalf of our Chairman Phil Condit, and more than 170,000 employees worldwide, welcome to Chicago and to Boeing World Headquarters. We're very pleased to host you here and to share the stage for your visit with the city of Chicago.
Last week, in fact, we celebrated the one-year anniversary of our selection of Chicago as the new hometown for our company. In a period of only 117 days after that announcement, we completely redesigned and rebuilt the twelve floors we now occupy in this building. We moved more than 120 families here from Seattle. We hired more than 70 local employees. And we began operations on schedule here on September 4, 2001.
We now have some 400 people working at this facility who are intensely focused on growth strategies, allocating corporate resources, developing our people, and leveraging the strength of our brand.
I can say without hesitation that we are very happy with the choice we made to come here. Chicago is a wonderful city, with a tremendous heritage. It is a global center of commerce with a truly international outlook. It is friendly to the business community, yet cares deeply about each of its residents. It offers a great diversity of arts, and culture, and people . . . where any citizen of the world can find his or her place. And importantly for us, it is also home to an educated and motivated workforce.
And last but certainly not least, the trains run on time and streets are kept impeccably clean. Chicago is a jewel among metropolitan areas of the United States, and I know you will enjoy your stay.
In addition to our residency here, Boeing as an entity has a lot in common with Chicago. We, too, have a rich history . . . a history of achievement in aerospace. We are international in our mindset and are expanding our global presence actively. We have customers in 145 countries, offices in more than 20 countries, major operations in Canada and Australia, and technology partnerships in several European and Asian nations.
We have great diversity in our people, our products and our services. We are well managed and disciplined in our approach to running our business. And we value our employees tremendously. We, too, have a lot to offer . . . to our customers, business partners and our employees around the world.
The mission of The Boeing Company, in the most basic of terms, is to help connect people . . . and help protect people. Our products bring together families, business travelers, and heads of state . . . shrinking the planet. They provide air power, troops and humanitarian aid when duty and disaster call. And they are helping expand knowledge and understanding of our world - and investigate others - with manned and unmanned space systems, satellites, and communications advances.
Now, I could spend a lot of time tonight TELLING you about the many things that we do, and the many ways we connect and protect people. But it's a lot more exciting to SHOW you . . . And that's what I'd like to do now with a short video clip.
I chose that particular video because it does such a great job of showcasing what we do as a company to create value for our customers and shareholders. After all, that's our job as a business, and it's something we strive to do better each and every day.
But behind all these wonderful products . . . behind all of our outstanding technology and achievements in aerospace . . . are people. Hundreds of thousands of talented, dedicated and motivated people across the global Boeing enterprise - which includes the company, our supplier-partners, our communities and customers around the world.
In fact, our company vision is "people working together as a global enterprise for aerospace leadership." This vision purposely starts with the word "people." It's there to remind us that we can never lose sight of the fact that our strength and competitive advantage is - and will always be - people.
Our CEO, Phil Condit, speaks very eloquently on this subject. He is quite passionate about it, and I could never do his comments justice. But the way he sums it up is this: We can work for years at a particular technology and be first to market, but a competitor can come along and duplicate that technology immediately. However, they can't duplicate people. People are our competitive advantage. We need to focus on people every minute of the day.
My job as chief People and Administration officer is to do just that . . . to ensure that we are doing all the right things to protect and nurture this competitive advantage. While there are many different elements to our strategy for doing so, I'd like to spotlight two of them for you tonight that I believe are critically important to our business and to sustaining our competitive people advantage going forward.
The first is collaboration, which in our vision is called "working together." Never before has collaboration been more important to business success than it is today. Why? Because work is being performed more and more by teams, not by individual contributors, not by individual departments, not by individual companies, and not even by individual countries.
Whether we are speaking of the smallest of businesses or massive global companies or even of world powers ... our work is being completed and our goals are being accomplished by teams. The ability to collaborate has become the key to the success of an enterprise.
What is causing this? One factor is that the primary tool of today's employee is intellectual capital. As well as skills, each team member brings to the table their intellect, thoughts, and ideas. Today's employee recognizes that the power of ideas is multiplied many-fold through collaboration.
Our job as a company is to provide tools to support collaboration, and to create an atmosphere where ideas flow freely and creativity is heightened. Today's employee is not one who will stand for what we used to call "a command-and-control environment," where the boss dictates what work will be done, and how and when you will do it. Today's employee brings much more to the table and expects much more in return.
Technology is also driving the evolution toward collaboration. We collaborate across companies now because we can. We collaborate across industries because we can. We collaborate across the world because we can. We collaborate because it adds value to our companies and to our organizations.
Sometimes this is difficult to explain to employees. They ask: Why do we need to collaborate with other companies and other nations? Aren't we good enough? Why not keep all those jobs here? The answer from a business perspective is easy: none of our companies and none of our countries has a monopoly on good ideas or good people.
And to gain access to those ideas and people, and markets for our goods, and capital for our investments, we have to collaborate. We have to become part of the economic fabric of the countries where we do business. We cannot compete as a company that arrives just in time to make a sale. If we operate globally, and collaborate effectively around the world, the results of our efforts will be a stronger, more efficient Boeing with more jobs for everybody.
Indeed, technology has enabled us to team with people we've never seen, to team with people whose language we don't speak, to team with people without the boundaries of geography and time.
At Boeing, we have an objective to provide instant access to information for anyone on the team from anywhere on the planet. Electronic - or "E"-enabling of the work environment is one way we're bringing people closer together, to connect their ideas. E-enabling and virtual office tools break down the barriers created by geography, by language, by time. Our world grows smaller every single day, and we are becoming much more integrated with communities and companies around the world as a result of advances in electronic communications.
Here's a perfect example of how our teams operate in our "connected' world and one that you may be familiar with: the International Space Station Team. The International Space Station is the largest and most complex space venture ever undertaken. Think about this: 16 countries, each with its own tools and parts, assembling a structure the length of a football field while it's flying almost 220 miles above the Earth at 17,000 miles per hour.
This journey is made possible not through the efforts of any single space agency, not through a single nation, and not through any single company, but through the strength and common purpose of a team at the highest level. The International Space Station is a powerful symbol - a global symbol - of what members of a great team can accomplish by applying the tools of technology to collaboration. It is a symbol of the tremendous possibilities open to us during this new millennium.
The second element I want to address for sustaining our competitive advantage with our people is education. I mentioned earlier the concept that the primary tool each employee brings to the job is their intellectual capital. Unfortunately, in our rapidly changing world of business and technology, intellectual capital can become a perishable commodity. To sustain it . . . and to grow it for your benefit . . . you have to invest heavily in it.
Recognizing this, several years ago we committed to what we call life-long learning for our employees. Last year, nearly 30,000 people - more than 15 percent of our workforce - participated in our Learning Together Program in which the company pays the full cost of tuition for employees who wish to pursue further education or advanced degrees at the university level. Since we started the program in 1998, it has helped more than 6,500 employees earn university degrees.
In addition to education outside the company, we are intensely educating them inside, as well. Our Leadership Center outside St. Louis, about 400 kilometers southwest of here, is the centerpiece of a top-to-bottom training continuum. At this center, we integrate business and leadership curricula with the goal of developing great business leaders. The center helps people learn how to lead teams and achieve outstanding business results in the face of today's dynamic global economy. Since opening in 1999 some 8,000 executives and managers from all levels have successfully completed intensive training at the center. And we recently started offering training for customers there, too.
All combined, our training and education budget - our investment in the continued competitiveness of our people - totals more than 250 million dollars annually. That ranks fifth among U.S.-based companies, following industry leaders like IBM, Ford, Accenture and Intel. This is a tremendous investment on the part of the company, but it's one we make enthusiastically. We know that the pay off is ensuring an exciting and competitive future for Boeing.
Before leaving the subject of intellectual capital, I want to touch upon one more program underway within our company.
We believe strongly that unleashing the untapped intellectual capital of our people can create significant business opportunities. So we put into place an innovative employee program to draw out the great ideas of our people. Our Chairman's Innovation Initiative is basically a $200 million venture capital fund for employee ideas.
This program provides a way for employees with entrepreneurial ideas to develop teams and business plans to get their ideas to market. A successful idea can result in the team being spun off to form its own company. We've had two reach that stage so far, with more than 550 ideas for new business concepts, product innovations, and major process improvements submitted to date.
I will close with one final thought, then open our discussion to questions you might have about Boeing and what I've shared with you this evening.
Next year, in December of 2003, we will celebrate the 100th anniversary of the first powered flight by the Wright Brothers at Kitty Hawk, North Carolina in 1903. That event is arguably considered the birth of the aviation industry and the beginning of a century of phenomenal achievement in aerospace.
That first flight was the result of tremendous collaboration between two brothers - two bicycle makers, in fact - who educated themselves on the theory and applications of the technologies that enabled flight. They simply refused to stand still and let the world pass them by.
Orville Wright was once quoted as saying: "We were lucky enough to grow up in an environment where there was always much encouragement to children to pursue intellectual interests; to investigate whatever aroused curiosity."
Today, our achievements greatly surpass slipping the bounds of earth to soar with the birds. We are going faster, higher, farther than the Wright Brothers ever dreamed we could. But those two essential ingredients for their success - collaboration and education - have never been more important. Having fueled achievement in the first century of aerospace, they are certain to fuel even greater achievement in the next.
And we at Boeing will continue to provide our employees an environment to pursue intellectual interests and investigate whatever arouses their curiosities.
Thank you. And I'm happy to take your questions.