- Boeing's new CEO plans to change the company culture by placing executives on factory floors.
- This strategy aims to address safety, communication, and trust in Boeing.
- One analyst said Boeing should have always been connecting its top managers with employees.
Boeing's new CEO on Wednesday laid out a four-part plan to fix the ailing company.
He said one top priority is to "fundamentally" change the culture, in part by putting executives on factory floors.
"We need to be on the factory floors, in the back shops, and in our engineering labs," he said in a memo to employees. "We need to know what's going on, not only with our products but with our people."
It's not uncommon for companies to send executives to work alongside rank-and-file workers.
Home Depot recently announced it would require corporate employees to work a shift at company stores each quarter. Starbucks' former CEO, Laxman Narasimhan, last year directed senior leaders to work in stores to better understand employee pain points and customer experiences.
For Boeing, this strategy could help bridge gaps in safety and communication as the planemaker tries to regain its foothold in the aerospace industry.
Boeing plans to better connect with its workers
Ortberg is tasked with stopping Boeing's freefall after a rough year of quality, safety, and production problems, plus a 40-day strike that has cost it an estimated $50 million per day.
During Boeing's third-quarter earnings call on Wednesday, Ortberg told investors that he is focused on holding the organization accountable and reevaluating the company's values to earn back trust. He said cultural change starts at the top and won't happen overnight.
"I'm still in the process of traveling around, meeting our people, particularly two and three levels down," he said on the call. "We just have to get everybody in the right position, running the right play, focused on the right thing, and I think we've got some work to do there."
Ortberg said he would consider supplementing the team with outside resources to help address Boeing's culture gaps. At the same time, he's promised to slim down the company's workforce by laying off some 17,000 workers.
"One of the things I've heard from a lot of employees is there is just too much overhead; it slows them down in being able to get their work done," he said. "So we're going to really focus on this workforce reduction in streaming those overhead activities [and] consolidating things that can be consolidated."
Putting execs in workers' shoes could improve safety
Ortberg said his plan to change the company's culture would help root out quality issues, in addition to giving executives more insight into its people and products.
Boeing's safety action plan, submitted to the FAA in May, focuses on strengthening employee safety reporting, simplifying and clarifying work expectations, and enhancing staff communication and training.
A communication breakdown was later identified as one reason critical bolts weren't on the Max 9 jet that lost a door plug midflight in January. At least three whistleblowers have come forward since the event to report slipping quality problems on the assembly line, with one veteran engineer saying they risked punishment from Boeing for bringing up safety issues.
Putting executives in workers' shoes could help streamline communication and quality processes and ensure employees get the resources they need.
Uber CEO Dara Khosrowshahi, for example, has been vocal about how his time driving for the company illuminated issues facing its drivers.
It could be the change Boeing needs
Richard Aboulafia, managing director at AeroDynamic Advisory, told Business Insider that Boeing should have been putting executives on the factory floor well before Ortberg showed up.
"Boeing needs to root out the people who thought it was appropriate or even acceptable to not have that interaction in the first place," he said. "Who said it was OK to run a company where there were these lengths between people who are at the top and the people actually doing the company's business."
Aboulafia said Ortberg could have a tough time forcing cultural change unless he cuts some of the managers who led the company through its latest crises.
Peter McNally, an analyst at Third Bridge, told BI that Ortberg's operational background is critical to the company's cultural revival.
"Kelly Ortberg was hired for his operational expertise, not for his ability to sell more planes," he said. "He is an engineer with deep industry experience, and his previous experience at Rockwell Collins gives him a lot of credibility with the rank-and-file."