Senior Vice President
Chief People and Administration Officer
Office of the Chairman
The Boeing Company
"The Importance of People"
Boeing Global Enterprise Employee Involvement Team
July 30, 2002
Good morning. Thank you very much for inviting me to join you today. I am pleased to be here and be able to spend some time with you discussing employee involvement. As you may know, employee involvement is something about which I feel very strongly. I am very happy to be a part of this meeting where you will be dedicating two days to discussing E.I., learning from each other and sharing best practices and information. Thank you to Stephen Bressler, Ed Schaniel, Mike Denton, Paul Bay and other hosts and planners for coordinating this meeting.
Today, I want to talk about employee involvement - why The Boeing Company is committed to it, the value senior leadership places upon it, and the reasons for our commitment. I'll begin by talking about our people and just how important they are. I then want to spend some time talking about what we mean by employee involvement and the many benefits of it. Next, I'll spend time on your two key meeting themes - leadership and collaboration. How we as leaders impact employee involvement, and what we can do to foster involvement and develop future leaders. I'll also spend a few minutes talking about how we work together and share some great Boeing teaming examples with you.
Our people. Our people are our greatest strength and our competitive advantage. At your places you should have a note from me attached to a copy of the Vision 2016. You are probably very familiar with these words by now, but I wanted to share them with you again because they really do capture the importance of our people. The vision very purposely starts with the word "people." And this reminds us each and every day of how important our people are and how much we value the intellectual capital they bring to work with them each day.
I want to share some of Phil Condit's thoughts on involvement with you. I've summarized his feelings on our people in the past, but I want to share them again. He talks about the fact that 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 and we need to focus on people every minute of the day. Pretty powerful words. I take them to heart. We should all take them to heart. The focus of my job is people. As Chief People and Administration Officer, I work to ensure that we do all necessary to protect and nurture our competitive advantage. And employee involvement is a key element to success. I know that Cheryl will be talking with you later this morning about the work she has been doing in the employee involvement area, including the survey. One thing we may need to consider is the term "employee involvement." In Cheryl's work gathering information on this subject, she found that some employees do not like the term employee involvement. I don't want to steal Cheryl's thunder by getting into more details here, but I do want to make this point - whether or not we move on to another name, it's the thoughts and principles behind what we know today as employee involvement that I am speaking about this morning.
Employee involvement. First of all, what do we mean by it? We mean employee influence and employee empowerment. When we have talked with employees about involvement - this is what we hear - they want to make a difference, they want to feel like they matter - as individuals and as part of a larger team. Employees want to feel like they have influence and are personally important. So we are here to talk about what we can do to further develop a workplace where people know that they matter.
A workplace where employees know they are personally important to us and where they feel comfortable sharing their ideas. And an environment where everyone's ideas are heard. An environment of trust, that allows for personalization of style, where people choose to help. Where they feel compelled to help because they know that we are all responsible for the success of this business. A true team - sharing the pain as well as the gain. We all know how employees can make a difference. They need to know that too.
So, why employee involvement? I'd like to spend a few minutes discussing the case for employee involvement - the "business" case and the "people" case. First, let's talk about the business case. I'd like to show you some information from the 2002 employee survey. You can see what constitutes a high performance work environment. Look at the words closest to the ESI oval - encouraged, satisfaction, involvement, productive, opportunity. This tells us that employee involvement is what gets the job done. Employees who feel this way perform. This is the bottom line of our business case.
The benefits to employee involvement are endless. Benefits to the business, benefits to the individual, benefits to managers and benefits to the team. Benefits to the business include improved financial results. Additionally, there are benefits to the community. Bob Watt will be speaking to you later on the topic of community involvement. Community activities are another way to encourage employee engagement. In fact the cover story for an upcoming issue of Frontiers Magazine highlights our community involvement, and the importance of this relationship.
In a recent study by the Center for the Study of Work Teams at the University of North Texas, they talk about the fact that research and practice indicates that organizations which integrate EI perform substantially better financially. High involvement work structures generate better ways of solving problems and performing work processes because employees are provided essential business information and therefore develop the knowledge and skills that allow them to improve their problem-solving abilities and work processes. The improvements are seen in higher quality products, reduced cycle-time, increased efficiency, increased customer satisfaction and increased productivity. Again, that's the bottom line of our business case.
In February of this year Fortune Magazine's published its "100 Best Places to Work" issue. We took a look at the top 15 and found several distinct categories of reasons cited for inclusion. One area was employee satisfaction. Employees at Edward Jones, the #1 rated "Best Company to Work For" felt satisfied because, and I quote "management is honest." Another response in the employee satisfaction category was respect. Employees at The Container Store, the #2 rated company, said that they feel they make a difference. Another category was values and culture.
We can see the business results in other data as well. Hewitt Associates talks about "best employers." This slide shows that the companies that are the best employers have an average engagement score of 74. Companies with total shareholder return higher than 20% over the last three years have an average engagement score of 69. In other words, companies with relatively high engagement scores - like 69 - have high shareholder returns.
I believe we here today all know what the "people case" for involvement is. It's the workplace I described earlier. Its people who feel good about their jobs, their teams and their work. Its a positive environment where people are empowered and know they matter. The "people case" for involvement is the reason we all want to come to work each day.
Let's look at our own recent survey and then I'll talk about how we continue to develop the "people case" for involvement - through leadership and teamwork. The results of this year's survey show that scores on E.I. questions increased an average of 1% - from 60% to 61%. Also, based on analysis of participation in business initiatives, we see that involvement in programs like Lean or High Performance Work Teams contributes an overall 5% increase in our E.I. scores. Employees who do not participate in these initiatives obtain a score of about 61% positive, and employees who do participate obtain a score of 65% positive. We also know that people involved in community involvement feel more involved at work.
Next week, the August issue of Frontiers Magazine contains a story about the survey. Phil Condit's reaction to the results are included and I quote "The data suggests that business initiatives not only help us to improve work processes and cut costs, but also improve employee's work conditions. It says that people who are involved feel a lot better about what's going on."
We have our benchmarks. And we know what it takes to be a "100 Best Company to Work For." We also know that given the recent economic hardships of our industry that job security is an issue. We'd like for Boeing to be part of the 100 Best Companies to work for, and we realize that given the job security issue, this may be a longer-term goal. We do know, however, that employee involvement, or as I like to say - involvement by all - will help get us there.
Leadership will also help us get there. Leadership is a key component to involvement and the base on which we build involvement. Stephen referred to this in his opening remarks.
So how do we as leaders impact involvement by all and what can we do to create an environment of empowerment and influence? And remember, whether or not we are formal 'managers,' we are all leaders and we are all responsible for creating the environment in which we work. This is personal; it's up to us. No one in senior management is going to come along and create an environment for us. Senior management can be effective in making sure certain policies and procedures and resources are in place to help create the right environment, but in the end, it's up to each and every one of us.
In preparing for this talk, I found some great information on Boeing websites that dealt with involvement. It listed some common principles for involving employees at Boeing. Let me read some of them for you because I think these principles nicely summarize the environment leaders need to develop in order to engage employees:
- A workplace where we focus on common goals
- The expectation that every employee that part of the job is to improve processes
- Empowerment for employees and teams within well-understood boundaries
- An environment that embraces learning and change and that models breakthrough thinking and continuous improvement
- Information and communication systems that support team-based decision-making
- Fair compensation, reward and recognition systems that support team behavior and results
- A positive work environment where employees feel listened to and engaged
- A quality of work life that provides personal and professional satisfaction, pride and mutual respect.
What I see here is a leadership role that has changed - has evolved to much more of a coaching and mentoring role. A leader today works with his or her team to create a goal, and everyone works together towards that common objective.
We know what employee involvement entails - now how do we as leaders apply it?
In many different ways. In terms of information sharing - its applied through regular team communications like staff meetings, cross talks, roundtable discussions, the development of councils and brown bag discussions. In terms of employee development, involvement is applied by providing leadership opportunities, education and training opportunities, job rotations, professional development plans (PDPs) and continued mentoring.
The overhead I refer to here is one that I use when I talk to employees at the Boeing Leadership Center. I share it with you so you can see the elements we consider crucial in developing our leaders - leaders who lead the world.
Leadership development includes education. And we all have a wonderful opportunity to learn through our Learning Together Program. You can take any course you like, whether or not it directly affects your job because Boeing believes that anything new you learn benefits the company. Additionally, career moves. People move around here at Boeing. We don't stay in the same job forever. And these moves can be vertical or lateral.
In my career at Boeing, I have had many different jobs, and moved several times. From Florida to St. Louis. From St. Louis to Seattle. And most recently from Seattle to Chicago. And although certainly some of my moves have been vertical, I believe my most important moves from a development and growth opportunity standpoint were all lateral. What I mean by lateral moves are moves where your level does not change, where you don't receive a big bonus or raise to take the new job. Leaders today need to encourage these sorts of opportunities, and help employees understand the importance of them.
Involvement is also applied by sharing the power. By working in work teams and creating mechanisms of feedback. Leaders today must also continue to develop reward systems that attract and retain the best and the brightest. At Boeing, we have a variety of rewards and recognition techniques. But lots of times, people are just looking for a simple 'thank you for a job well done' from their leader or from their co-workers.
So, how do we do all of this in a role that is constantly changing - changing as we speak?
First of all, we need to accept the changing role, be ready for it, and its challenges, and adapt to it. The overhead I have here details some of the challenges of the changing leadership role. The free agent mentality. That is the fact that most people today do not stay in one job with one company forever. Boeing is unique in that people can have many careers here, and they do not usually stay in one job for long --- as I noted earlier. Changing demographics, global enterprise, dispersed team, internet generation and information transparency. This is the world we live and work in, and we as leaders need to be ready to help our teams succeed in amidst this changing world.
I've said before, effective leadership is impossible without collaboration. Leadership and teamwork today go hand in hand. With today's changing environment, leading a team, and engaging a team is very different than it was only a few years ago. You can see on this chart what teamwork looks like today. Home offices, virtual team rooms, NetMeeting, teleconferences, digital pagers, instant messaging, email, voicemail. The list goes on and on, with new additions every day.
Given, this new and changing environment, how to we keep employees engaged? The opportunity is in the technology. Because of technological advances, employees now have the ability to work across their functions and business areas - and across all boundaries. Employees also are able to work from any location. Consequently, in the future we will be less and less dependent on physical work space. The opportunities technology presents us are endless. We can now have a team with members in different time zones, multiple countries and speaking many languages. Employees have growing opportunity to move up the value chain and gain more experience and exposure. And our teams are not limited to employee teams - our teams extend beyond our company, and include the whole enterprise of customers, suppliers, communities and other stakeholders.
An example of a team of today is the recent contract we were awarded to install and maintain explosives detection systems as the 438 U.S airports serving commercial aviation. Boeing and the Siemens Corporation won this contract together and we have assembled a "best in the business" team to work as one team to not only install and maintain the systems, but also to train 30,000 airport baggage-screening employees. Our team includes Preston Aviation Solutions, a Boeing subsidiary, and Transolutions - both of which provide aviation infrastructure and modeling; CAGE Inc. which develops cost-effective designs and operational policies for airports; Turner Construction, supported by Hanscomb will manage airport site preparation, and architectural and engineering will be handled by firms Leo A. Daly, Corgan and DMJM Aviation.
Additionally, I'd like to share an example of a team I witnessed on a trip to our Moscow office this spring. We have about 350 engineers in Russia who are performing design work with partners here in the United States - in Washington State. This team consists of engineers who use the same tools and processes - across the world from one another. Because of the time difference, this team is able to work 24 hours a day, seven days a week. They have a common objective. They may never meet and may not speak each other's language. But because of technology and collaboration, they function as one Boeing team.
The last example I would like to share is a personal one. On September 11 last year, I was addressing the 12th International Conference on Work Teams in Dallas, TX. In fact, I believe some of you were there. The topic was in fact leadership and teaming. Of course I don't need to tell you how that day has changed all of us forever. I'd like to tell you however, about the teaming and engagement that happened that day, and how it confirmed what I already knew - that Boeing employees work together to get the job done. At that time, I was President of SSG and also held the EXCO responsibility as Chief Emergency Officer for The Boeing Company.
The first thing I'd like to point out is that this was not an internal Boeing meeting. It was an international conference, and about 50 Boeing employees were dispersed among the many others attending the conference. Once we learned the news of the terrible tragedies that took place that day, a Boeing team was immediately formed. Now, no one dictated that this team should be formed at all, or how the team should be formed. Boeing people just immediately came together and worked together to tackle the tasks ahead of us.
Team members assumed critical roles. Some became responsible for tracking all Boeing employees at the conference, and carried this responsibility forward to the extent of tracking each person as they left Texas in the days ahead for their journeys home - who were they traveling with, how were they traveling, what were their routes, and how they were proceeding along those routes. Some took responsibilities in connection with contacting family members by email to let them know of their loved one's whereabouts. Others took on the task of recreating my hotel room, crafting it into an emergency response center for The Boeing Company - helping me to carry out my role as the Chief Emergency Officer.
I'll bet the Hyatt still can't figure out what happened to the configuration of that room! Every base was covered. Each person assumed a critical role. We even had a Boeing employee who was a minister among us to help us through that terrible time. We were a team with a common goal. We worked together to get the job done. It was a unique experience and one that I am quite proud of. In fact, if there are any of you who were in Dallas, thank you.
Before we move to a discussion, I want to share a few last thoughts with you. We at Boeing are committed to employee involvement, no matter what we call it. Its our way of doing business, our vision is based on it, and our future success depends on it. Engaging employees and empowering them requires leadership and collaboration. And leadership in today's world is changing. Leaders must work with their teams and set common goals. You can see this and other key elements to leadership success in the overhead. We will have leadership challenges with our new virtual global teams. But these challenges also present us all with opportunities. New ways to share ideas, improve processes and take ownership. I'd like to close by leaving us with a few key words that are inherent in a high performing, engaged culture.
Goals. Communication and Delegation. Feedback. Learning. Opportunity. Rewards and Recognition. Empowerment. Influence. Inclusion. Involvement by all. Change.
Thank you again for inviting me to be here today. Now I would like to open the floor to discussion.