4 ms·

(2019)The Long-Forgotten Flight That Sent Boeing Off Course

30 points by clwg 3y ago

kqr 3y ago
https://archive.is/q5pQV https://archive.is/q5pQV
kqr 3y ago
Why does this happen? I see it happening over and over in different companies. Does any shareholder ever go, "Stop. This sounds familiar. Let's avoid the most common outcome here and reinstate the engineers." If so, what conditions makes that succeed, and what obstacles usually prevent it?
- zbobet2012 3y ago
  I think because there are some very unprofitable companies driven by engineers. You can't have an organization that is devoid of finance based drive. You need some balance, and it's not always clear what the balance is.
- rwmj 3y ago
  Shareholders rarely see past the share price. There are activist shareholders but they'd be more interested in cutting costs, since that temporarily improves the bottom line. Cutting costs leads to the opposite of an engineering-driven culture.
  - rightbyte 3y ago
    > Cutting costs leads to the opposite of an engineering-driven culture. Not if "the engineers" are cutting the costs? There has not been any big corp. job I've been on that does not have these huge overhead of back scratching upper manager class expenses in marketing, conferences, fancy offices, consultants etc. The only big flaw I feel I would share with the usual suspects is vanity projects. Then again, it is probably really hard to run a company with B2B deals with out the implicit "bribing" of the manager class of the other companies.
    - rwmj 3y ago
      I think it's more that activist shareholders (think the likes of Carl Icahn or even Warren Buffet) are not engineers. They're selected for their personalities, being able to quickly read senior management at a company, and a head for financial engineering. Arguing against myself: management buy-outs are a thing too, and it's possible for a highly technical person to end up buying out their own company (Dell being an example). Also technical people can end up getting promoted to senior leadership in existing MBA-driven companies (example, Intel).
- flashback2199 3y ago
  In particular, how is Boeing apparently exempt from antitrust? Shouldn't there be more than one large airliner manufacturer in North America? I guess regulators consider Airbus to be sufficient, but when each has its own government comfortably in its pocket, I'm skeptical.
- granshaw 3y ago
  It’s a fundamental trait of the publicly traded company system - the incentives are all aligned towards share price which incentivizes short termism The alternatives are to stay private, or have a strong leader figure who cares about the long term and has retained strong voting rights ala Zuck
  - lamontcg 3y ago
    I don't think it is inherent to publicly traded companies, but it certainly seems to be inherent to our publicly traded companies. Most of the shareholders are: gamblers chasing fashion looking for quick profits, management insiders that want to pump the stock and their bonuses before they change jobs in ~5 years, or index funds that buy stock no matter what. There's very few investors bothering to understand how to value a company and nobody cares about a businesses cost of capital or its return on invested capital.
    - Zigurd 3y ago
      Investors value lack of volatility. This is a kind of impedance mismatch between investor decisions, how management is evaluated, and the health of enterprises over longer (but not much longer) time periods. Especially in publicly traded companies. This happens because of how US rules apply to profit, dividends, reporting periods, etc. The rules and incentives could be changed.
rwmj 3y ago
> The isolation was deliberate. “When the headquarters is located in proximity to a principal business—as ours was in Seattle—the corporate center is inevitably drawn into day-to-day business operations,” Condit explained at the time I'm wondering what "management principle" this is? Is it from a book or an MBA course? It seems (to me anyway) the opposite of good practice.
- j-bos 3y ago
  Definitely the opposite of Toyota
wejick 3y ago
Reading this, I'm hoping Intel are getting on the right track. Seems they're doing just that so far.
ericalexander0 3y ago
Predictable based on a large body of knowledge. From Orson Scott Card's How Software Companies Die to David Packards HP Way. There's also Deming, Goldratt, and Jim Collins. https://medium.com/riow/how-software-companies-die-by-orson-scott-card-29b038e9a0b1 https://medium.com/riow/how-software-companies-die-by-orson-... https://fs.blog/the-hp-way-david-packard/ https://fs.blog/the-hp-way-david-packard/

30 points by clwg 3y ago

kqr 3y ago

https://archive.is/q5pQV https://archive.is/q5pQV

kqr 3y ago

Why does this happen? I see it happening over and over in different companies. Does any shareholder ever go, "Stop. This sounds familiar. Let's avoid the most common outcome here and reinstate the engineers." If so, what conditions makes that succeed, and what obstacles usually prevent it?

zbobet2012 3y ago
I think because there are some very unprofitable companies driven by engineers. You can't have an organization that is devoid of finance based drive. You need some balance, and it's not always clear what the balance is.
rwmj 3y ago
Shareholders rarely see past the share price. There are activist shareholders but they'd be more interested in cutting costs, since that temporarily improves the bottom line. Cutting costs leads to the opposite of an engineering-driven culture.
- rightbyte 3y ago
  > Cutting costs leads to the opposite of an engineering-driven culture. Not if "the engineers" are cutting the costs? There has not been any big corp. job I've been on that does not have these huge overhead of back scratching upper manager class expenses in marketing, conferences, fancy offices, consultants etc. The only big flaw I feel I would share with the usual suspects is vanity projects. Then again, it is probably really hard to run a company with B2B deals with out the implicit "bribing" of the manager class of the other companies.
  - rwmj 3y ago
    I think it's more that activist shareholders (think the likes of Carl Icahn or even Warren Buffet) are not engineers. They're selected for their personalities, being able to quickly read senior management at a company, and a head for financial engineering. Arguing against myself: management buy-outs are a thing too, and it's possible for a highly technical person to end up buying out their own company (Dell being an example). Also technical people can end up getting promoted to senior leadership in existing MBA-driven companies (example, Intel).
flashback2199 3y ago
In particular, how is Boeing apparently exempt from antitrust? Shouldn't there be more than one large airliner manufacturer in North America? I guess regulators consider Airbus to be sufficient, but when each has its own government comfortably in its pocket, I'm skeptical.
granshaw 3y ago
It’s a fundamental trait of the publicly traded company system - the incentives are all aligned towards share price which incentivizes short termism The alternatives are to stay private, or have a strong leader figure who cares about the long term and has retained strong voting rights ala Zuck
- lamontcg 3y ago
  I don't think it is inherent to publicly traded companies, but it certainly seems to be inherent to our publicly traded companies. Most of the shareholders are: gamblers chasing fashion looking for quick profits, management insiders that want to pump the stock and their bonuses before they change jobs in ~5 years, or index funds that buy stock no matter what. There's very few investors bothering to understand how to value a company and nobody cares about a businesses cost of capital or its return on invested capital.
  - Zigurd 3y ago
    Investors value lack of volatility. This is a kind of impedance mismatch between investor decisions, how management is evaluated, and the health of enterprises over longer (but not much longer) time periods. Especially in publicly traded companies. This happens because of how US rules apply to profit, dividends, reporting periods, etc. The rules and incentives could be changed.

rwmj 3y ago

> The isolation was deliberate. “When the headquarters is located in proximity to a principal business—as ours was in Seattle—the corporate center is inevitably drawn into day-to-day business operations,” Condit explained at the time I'm wondering what "management principle" this is? Is it from a book or an MBA course? It seems (to me anyway) the opposite of good practice.

j-bos 3y ago
Definitely the opposite of Toyota

wejick 3y ago

Reading this, I'm hoping Intel are getting on the right track. Seems they're doing just that so far.

ericalexander0 3y ago

Predictable based on a large body of knowledge. From Orson Scott Card's How Software Companies Die to David Packards HP Way. There's also Deming, Goldratt, and Jim Collins. https://medium.com/riow/how-software-companies-die-by-orson-scott-card-29b038e9a0b1 https://medium.com/riow/how-software-companies-die-by-orson-... https://fs.blog/the-hp-way-david-packard/ https://fs.blog/the-hp-way-david-packard/