Samuel P. Jenkins
Vice President, Ethics
Boeing Integrated Defense Systems
"Raising the Bar on Integrity"
March 31, 2005
Thank you for that kind introduction.
It's a great privilege to be here. I want to first congratulate you on your annual TUBE (Tuskegee University Business and Engineering) conference. I know it has been a lot of hard work preparing for this week and that I'm the only thing standing between you and dinner. So I will be quick!
When I arrived at the Kellogg Conference Center today, I thought about my father-in-law, John Claybon, who walked this campus more than 50 years ago. A 1949 graduate, he tells some great stories about his time at Tuskegee.
As an employee of Boeing, I also thought about the Tuskegee Airmen, who learned to be military and commercial pilots at the former Tuskegee Institute here. I am proud that Tuskegee pilots flew our airplanes. Tuskegee pilots are legends. They persevered against the harshest prejudice, against great adversity and against the worst odds to attain their dreams to fly and serve our nation with honor.
I am proud that they flew our P-51 Mustang airplanes with the 12th Tactical U.S. Army Air Force and the 15th Strategic Army Air Force in World War II ... and that they never lost an airplane they escorted to enemy aircraft. Tuskegee Airmen are an inspiration and a reminder to all of us to do better and to "work together" to improve. They faced some of the fiercest headwinds both literally and figuratively to succeed. They had great integrity. Thank you again for inviting me to speak tonight and for the opportunity to reflect a little on my family and on my aerospace heritage.
"Integrity" is the centerpiece of my talk tonight. I want to share a few stories that match with the themes of your conference: learn from the past, embrace the present and expand opportunities for the future.
My first story is about President Woodrow Wilson, our 28th President of the United States. Reportedly President Wilson was, and I quote, "scrupulous to the degree of fanaticism on the point of avoiding any personal or family favoritism in appointments or the awarding of war contracts." The anecdotal story claims that one day, "A caller at the White House quite casually mentioned that the firm headed by a distant relative of the President had received a building contract." The story goes on to say, and I quote, "that although this might readily have been accepted as a legitimate and purely coincidental transaction, the President said in great agitation, 'It must be stopped at once.'" And it was. The President's action was unpopular with his family and created a breach that allegedly never healed, but our nation was served well with his respect for fairness and his high degree of integrity.
I believe we can always learn from the past.
The next story is about me. Last year I fulfilled a 30-year promise to myself and enrolled in graduate school. As of last week, I am halfway through the program, having just completed my Managerial Finance course. It is with some measure of pride that I can report I have a 4.0 average. It's okay to applaud.
Going into the program my hope was to do well, but I did not expect at this point to have "aced" all the courses. Well, as we tend to do I have adjusted my expectations upward, and I now expect to finish the program with nothing less than all A's on exams and as a final grade.
Last month, I took my Finance midterm and was mortified when the instructor announced that the average score was 80 percent. My fear turned to jubilation when I received my paper and learned that I had earned 96 percent. The instructor reviewed the test with the class, and I was busy recalculating my scores just in case I really had a 97 or 99 percent When the calculator screen showed 89 percent, I rationally figured that I had missed some points. I ran the numbers again and again, and 89 percent kept appearing.
"Okay," I thought to myself, "if I just keep my mouth shut, no one will ever know, and I won't have to work as hard on the final." My gut told me otherwise. The goal of "acing" everything wasn't nearly as important as my personal integrity, and so I talked to my professor at the end of the class.
We can listen to our gut and learn a lot about ethical behavior by examining our own actions through reflection and discussion. So I encourage you to talk among yourselves later tonight, tomorrow, next week and beyond as you explore integrity in your own lives.
I believe it's important to embrace the present and to learn from it.
My final story tonight is about my company, Boeing. Let me begin with some background. It was a few years after Orville and Wilbur Wright flew the first successful airplane, the Wright Flyer, at Kitty Hawk in 1903 that our company founder, Bill Boeing attended an air show in Southern California. There, Mr. Boeing, who was a timber man, discovered that he could use his wood to make airplanes.
Bill Boeing went on to start our company in 1916, which means that we celebrate our centennial anniversary in only 11 years, in the year 2016. About ten years ago, our company leaders saw that milestone as an opportunity to create a plan for where we wanted to be in 2016. They created a vision, which reads: "People working together as a global enterprise for aerospace leadership." Integrity is one of the core company values of that 2016 vision, and we take it very seriously.
In 2003, after investigations revealed ethical misconduct, we took action. We started by collecting data. Specifically, we looked at our employee survey data -- especially questions that related to our core value of integrity. We initiated internal reviews and a series of four external and independent reviews. More important, we announced publicly that we were undergoing these reviews, that we would publish the results and that we would address all the recommendations.
The collective results of the various independent reviews -- coupled with data from our employee survey -- revealed a solid ethics and compliance infrastructure at Boeing. In fact, the data told us that we had best practices in some areas. In addition, the data told us we had areas that could be improved.
We also recognized that our reputation was being tarnished by the perception that the improprieties were part of the cultural environment. And it wasn't just the company's reputation we were concerned with, it was the impact on our employees. The men and women of Boeing take pride in their work and the products and systems they build. It was their reputation on line.
During the time of our independent reviews, we watched what was happening beyond the borders of Boeing as company after company made headlines for scandal and dishonesty. The landscape of the business environment was changing and businesses were operating in very complex environments with rapidly changing regulations, growing industry pressure, and instant and sometimes volatile communications and media scrutiny.
At Boeing, we faced "fierce head winds" with courage and tenacity. There was no other choice than to take our challenges and turn them into opportunities. And that's what we did. First, we created an Office of Internal Governance to consolidate three key functional organizations: Corporate Audit, Import and Export Compliance and Ethics and Business Conduct, the group I represent. This allowed governance work to be centralized under one senior leader, who reports to the Boeing CEO, and who had a directive to strengthen our processes and procedures companywide.
As part of the Ethics and Business Conduct branch of the tree, we reorganized ourselves. We created a strategy to heighten awareness, increase management's participation and ensure that every employee recognized their own personal accountability. To accomplish our plan, we doubled the number of ethics advisors to provide service to 160,000 employees worldwide.
We also improved our communications so employees could call for help by telephone, fax or Internet to our Ethics Line, and we reinforced our "no retaliation" position. We established a special portal so anyone could reach us anytime from anywhere, anonymously if necessary. We also revised our Ethics Guidelines to reflect updated procedures and policies, and distributed the guidelines to employees at their homes.
Just this week, we started publishing the Ethics Friday Report of actual cases of appropriate and inappropriate behavior, without specific details, so employees can learn firsthand what works and what doesn't work in the Boeing environment. To improve even more, we changed our recruiting and hiring processes for government and competitor employees and enhanced our exit interview process. In addition, new employees attend a special ethics orientation when they join the company and sign our Code of Conduct, which all employees sign annually. Every employee also takes our Ethics Challenge training and attends recommitment events.
Our changes include more management ownership of our ethics initiatives as well. Through assessment and review boards, executives are more actively engaged in managing ethics and compliance, and our managers are responsible for leading ethics awareness and training with employees. We provide collateral materials for managers to use at crew and staff meetings on our Ethics@Boeing Web site. This includes videos, presentations and case statistics, including the top violation categories such as conflict of interest. We have ethics classes for managers at our Boeing Leadership Center and special training on industrial espionage and trade secret topics too. So far, we have implemented more than 200 actions to improve internal controls at Boeing.
By being proactive, we have turned challenges into opportunities in the "face of the fiercest of winds," which brings me to the last part of the story. Three-and-half weeks ago, an anonymous tip was submitted to our board chairman, chief lawyer, and my boss concerning the behavior of our CEO. The allegation against the most visible and senior member of the company required an immediate response. Subsequently, our board concluded that a violation of our Code of Conduct had occurred, and our CEO left the company. The bottom line: our new processes were tested and they worked - both effectively and efficiently.
I believe Boeing is a great company because of the 160,000 people who work there and the many business partners and suppliers who help us build our products and systems. And I'm proud to be among them. Of all the things we do -- I'm most proud that when faced with a challenge -- our employees pull together, turn obstacles into opportunities and embrace change because they care.
I believe it is important to learn from challenges to shape the future.
Now let me wrap this up.
Tonight I shared three stories: one about President Wilson, one about myself and one about Boeing. I share these stories because I hope you will learn from them as you make your own commitment to ethical behavior and make your way into the world, whether in business, engineering or possibly even aerospace. Remember, if you have a question about integrity, listen to your gut and if you aren't sure, ask before you act, act with the great honor and honesty, and keep your commitments.
When John F. Kennedy accepted the Democratic Presidential nomination in 1960, he talked about challenge and a new frontier for America. He said, and I quote: "The New Frontier of which I speak is not a set of promises -- it is a set of challenges." His challenges led us to space, to the Moon and beyond.
Today we face challenges in ethics and business conduct on planet Earth and live in a very different world than the Wright Brothers, Bill Boeing, the Tuskegee Airmen, and Presidents Wilson and Kennedy. As students, as faculty, as employees and as business leaders, whether we are at universities, in industry or government, we operate in very complex environments, environments, which have rapidly changing regulations, growing pressures, instant and sometimes volatile communications, and media scrutiny.
Our environments test our systems, our processes and our virtues. So we must all work hard to protect our treasures -- our reputation and our integrity. We must recognize that quick, thoughtless decisions make us ripe for stumbles in an unforgiving environment. However, if we "raise the bar to protect integrity" and if we work together to turn challenges into opportunities to improve, I firmly believe, we will succeed.
Together we can create world-class ethics and business conduct standards in the 21st century as a guide for those to come, to those who follow us. Then, and only then, will we leave our institutions and companies "better" places for generations ahead to soar high above the "fiercest of winds."