The idea that companies owe something to the public—to the society that grants the license to operate—is still considered a novel idea by some, but it’s hardly radical. Companies from the Container Store to Herman Miller to JetBlue to Microsoft and dozens more are very clear about their public purpose. What sets the successful ones apart isn’t the purpose statement, however; it’s the follow-through. You have to get both right.
The idea that companies owe something to the public—to the society that grants the license to operate—is still considered a novel idea by some, but it’s hardly radical. Companies from the Container Store to Herman Miller to JetBlue to Microsoft $MSFT and dozens more are very clear about their public purpose. What sets the successful ones apart isn’t the purpose statement, however; it’s the follow-through. You have to get both right.
When “purpose” is only a statement in the CSR report, it’s only a matter of time before the real purpose of the enterprise is revealed. Consider Enron. , reporters make a strong case that the problems at the company go much deeper than bad design on the .
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As Boeing shareholders gather in Chicago on April 29 for the company’s annual meeting, we hope they will demand that management reconsider the fundamentals at a company that considers itself the market leader in the airplane industry. Boeing has fallen down on at least two counts: first, setting a clear, measurable, socially beneficial direction; and second, driving it through the company’s core operations and feedback loops. As a manufacturer, the process Boeing needs to follow should be familiar. It’s a lot like the process that ties the principles of Total Quality Management—the Bible of manufacturing—to decisions on the factory floor, through education and training, management protocols, metrics, and the ethic of continuous improvement.
A look in the rearview mirror at this company in free-fall is telling. Online, Boeing lays out its purpose in a series of statements grouped under the title, “Our Vision.” It starts with a statement of Purpose and Mission in which “Innovation” figures prominently, as if to be innovative is an end in itself. The company’s “Aspiration” is to be the “best in aerospace and enduring global industrial champion.”
When we get to the part about aligning strategy and goals, the prescription for the current disaster is laid out in full. There are three bullet points, including this one: “Sharpen and Accelerate to Win”—which, according to press reports, management took seriously, while skipping basic steps in the design process in a race to market against its chief competitor, Airbus.
Boeing’s goals are also part of the Vision Statement and include “Market Leadership,” “Top-quartile performance and returns,” and “Growth Fueled by Productivity.” Things get fuzzier as you move down the list , to concepts like “design, manufacturing, services excellence.” The next section is a list of enduring values, starting with Integrity, Quality and Safety, and moving on to Trust & Respect—now fodder for late-night comedy.
It appears, at least in language, that Boeing’s purpose is to win by staying focused on beating the competition, through growth fueled by innovation.
Back to the basics. I believe in the importance of a clear, socially useful mission. Why do we offer any company the license to operate, the protection of limited liability, even constitutional rights like the freedom to speak in the public square, if the fundamental purpose is not socially useful?
A businessman I admire once said to me that profits are like oxygen—clearly necessary, but to breathe is not why we get out of bed in the morning. Boeing has a lot of work to do. Being market first is not to be confused with being customer first. Delivering high-quality goods and services to the public is a fine organizing principle. Delivering profits and shareholder returns follow when you get it right.
Author Judith Samuelson is founder and executive director of the Aspen Institute Business and Society Program. Find her on Twitter $TWTR at @JudySamuelson or on email at [email protected].
