Strength on strength

“I look at the investments that we’re making today, [and] the opportunity to grow the company and to revolutionise how we provide services to our customers is very clear,” Dennis Muilenburg, who took the reins as president and chief executive officer of Boeing on July 1, tells Australian Aviation during a recent visit to Canberra.

“We’ve won for a hundred years because of innovation, we’re going to win in the next 10, we’re going to win in the next 100, because of innovation. And that’s our focus, that’s the investment we’re making for the future. ” Muilenburg became CEO of Boeing at the relatively youthful age of 51, having spent all his professional career with the Chicago-headquartered aerospace giant.

“I joined the company 30 years ago as a summer intern in engineering, and I’ve had a chance to work across almost every part of the company, so I have this deep appreciation for the talent and technology, and what we do as a company, and the legacy of the company, and that 100 years. So, taking this role at this point in time is especially rewarding, and I’m humbled by that and energised by that. ” Energy – and pretty impressive time-management skills! – Muilenburg clearly has in spades as he is a keen cyclist who sets himself the goal of riding 10,000km a year. For now his energies are being channelled into executing a stable transition from predecessor Jim McNerney, who remains as Boeing chairman, and who he worked alongside of as chief operating officer.

“I had the privilege of working alongside him for about a year and a half in my COO role and learning from him, and I’ve learned a lot from him in terms of what it means to be a global CEO and how to run an enterprise and do it the right way, and engaging all of the stakeholders,” Muilenburg says.

“So, it’s been a privilege for me to learn from him, and then be part of building Boeing’s strategy over the last many years, and now to carry that [forward] as we head into our second century. ” Muilenburg certainly offers a message of continuity in the transition of Boeing’s leadership, aimed at reassuring shareholders used to and looking for strong profit growth and healthy dividends.

“And so [I have] this theme of strategic consistency, that we have a strong company today and we know where we’re going to invest for the future, and that our customers will see that theme of continuity and consistency on our strategic path,” he says.

But in the medium to longer term, where Muilenburg directs his energies and shapes the future of Boeing will be fascinating to watch.

“At the same time, as we head into our second century, then I’m going to lean forward and make Boeing even better, and engage our team and our customers in doing that,” he promises.

“To me, one of the most exciting things about Boeing [is] we have won for a hundred years because of innovation. If you think about every innovation that’s happened in the aerospace world over the first hundred years of aviation, Boeing’s been involved, from the introduction of flight, to the arsenal of democracy during the World Wars, to the introduction of the jet age, to the introduction of the space age, to the introduction of today’s digital aviation age, Boeing has been on the leading edge of all of that. ” The message of agility and innovation is perhaps well tailored to Australian ears, as they are the mantras of new Prime Minister Malcolm Turnbull, but they do point to a future direction for Boeing under Muilenburg, who was once described as “an engineer with swagger”.

“One of my big aims heading into the second century is how do we leverage the bigness of Boeing, the strength of Boeing, what I like to call ‘strength on strength’, and at the same time build the innovation and agility edge that we know the market is going to demand in our second century,” he says.

“That’s what I like to call the ‘sharpen and accelerate’ piece of our strategy. So it’s a combination of strength-on-strength, building on a foundation that’s very powerful, and is global, and then continuing to sharpen and accelerate and having the agile, innovative leading edge that you need for the second century.

“And you can see that showing up, products like the 787, you can see on some of the new things we’re doing in deep space exploration, and what we’re doing in networked information solutions, some of our new defence products. But I always think we can get better. We can always get better. ”

We have won for a hundred years because of innovation.

So what does getting better look like? “In our B2B [business to business] space, leveraging information, both internally and externally, is a big growth opportunity for us. This isn’t something that’s going to take us away from our core business, rather it is going to amplify and enhance our core business is the way I like to think about it. And you think about our internal operations, things like global supply chains with about 15,000 suppliers around the world, you think about next-generation production systems, exchange of information internally. Our ability to leverage data and information to optimise our internal productivity in operations [is a] tremendous opportunity to just make us a more lean and agile company,” Muilenburg observes.

“And then externally, we think about leveraging information in our products, the 787 is an incredibly information-rich machine. So we’re starting to tap into how do we leverage that information and turn it into value-added services for our customers, things like predictive maintenance. The same thing on the defence side, these information-rich platforms and the ability to network them to provide sensor fusion and new solutions to our defence customers – incredible opportunities.

“More broadly, data analytics, as applied across those fleets, and how do we create new kinds of services that perhaps we haven’t even thought about previously: autonomous systems, robotics, how do those play both into our factories and into the products that we deliver? So I think there is an incredible opportunity for us to leverage information back into our core business to make us more efficient, more effective, internally, and into developing new products and services externally. And that’s not about jumping to a new market, that’s about using information to build on what we already have. ” So in a company of 160,000 employees and 100 years of history, how is that achieved? “We have 5,700 aircraft in backlog. Our ability to profitably deliver that backlog will fuel innovation, the investments we’re making in our new defence and space products.

“So that strength on strength investment will remain the foundation, but then in addition to that, a few places where we want to invest in a cross-enterprise integrated fashion, we think about second century design and manufacturing technology, 3D printing, additive manufacturing, robotics. Another big area for us is growing our services business, growing data analytics information-based services.

“We see that as an investment that can work across the whole Boeing enterprise, so I’m launching a few ‘sharpen-and-accelerate projects’ . . . that I think will augment the core effort, and do that in a way that’s integrated. So rather than having all of the pieces of Boeing investing in data analytics and having hundreds of projects, a cohesive data analytics strategy that feeds all of the businesses in an integrated fashion. ” An integrated ‘One Boeing’ stands out as one of Muilenburg’s key objectives.

“When I think about One Boeing, it’s about creating a culture where we can work seamlessly across our commercial, defence, and space sectors, and that means our ability to move and share talent, to develop our people, to build on our customer relationships. In many cases around the world, we have in-field support in both commercial and defence, and where we can cross leverage that support, we can serve our customers even better. It’s about leveraging our technology investment and sharing processes and best practices across commercial and defence sectors,” he says.

“I think at Boeing we have a unique critical mass depth of capability across defence and commercial sectors, like no other company in the world.

“And so we can tap that and exchange best practices and technology, processes, people, we can serve our customers in ways that nobody else can, we can create innovation that’s leading edge, and frankly, be the best aerospace company in the world, and be a global industrial champion. One Boeing enables that.

“As a company, we are uniquely positioned to have that capacity, and when we can work seamlessly as one enterprise, it’s a competitive advantage. ” So then as Boeing enters its second century, how will that “global industrial champion” evolve over the next 10 years? “I feel a sense of responsibility for the legacy of the company and what we’ve done for a hundred years, and what the Boeing brand means to the world, and then building on that going forward,” Muilenburg says.

“Now when I think about what’s around the corner, you know, we look at what’s happening in the commercial airplane world, passenger growth that we’re seeing, the connectivity, the new route structures that the new technology is enabling, information-based solutions for our customers in addition to traditional range, payload and seat capacity solutions. I think we’re just on the leading edge of what this wave of new technology is going to mean to our customers.

“It’s creating new operating efficiencies, but it’s also going to create new service models, new route structures, new traffic patterns, which is going to enable economic growth, which is then going to amplify what our customers are going to need for the commercial traffic for the future. So that commercial air-travel realm I think is poised for some significant growth.

“I think about the revolution that’s happening in the defence and space business around information connectivity, and how we’ll use existing platforms in ways that none of us can imagine today: autonomous solutions, robotic

I always think we can get better. We can always get better.

solutions, both for our customers, and bringing robotics in automation into manufacturing in our factories. Technologies like 3D printing, additive manufacturing, revolution in manufacturing and how it will change how we design airplanes and systems, that I think is a big change.

“What is the company going to look like in 10 years? We have a lot of options, it’s going to be a bigger, more global company, one that’s on an innovation leading edge. ” So what is the significance of Muilenburg being an aerospace engineer by training in keeping Boeing on that innovative leading edge? “Coming up as an engineer in the company has given me a deep appreciation for the technology, the degree of sophistication in our products, the raw technical challenges of being on the leading edge for these customers. I like to think of aerospace as the leading technology sector in the world, and I like to think of Boeing as being the leader in that leading sector. And, as an engineer, I have an appreciation for that. Now what I’ve also learned from Jim McNerney, with his business background, is the importance of how do we productise technology, how do we think of technology in a value-added business way?” Muilenburg sees Boeing standing at the “intersection of business and technology at a global level. ” He continues: “I’m hoping that I can bring to the job, building on what I’ve learned from guys like Jim, bringing my technical depth along with that and an appreciation for the talent that we have and coalescing that into new innovation models for the future. To me, that’s very exciting.

“Now, the key part of that equation, and the most important part of that equation, is the talent, and our ability to build the STEM (science, technology, engineering, and mathematics) pipeline.

“I think it’s even more broader than traditional STEM, as we think about science and technology and engineering [it is] helping the next generation of workforce to understand that manufacturing is now on the high-tech leading edge, and to get people excited about those kind of careers.

“Our manufacturing work today is some of the most incredible, robotics-driven, technology-driven technology in the world. So I interpret STEM more broadly. This is probably one of the biggest strategic risks we have as a company, to build a sufficient pipeline and to attract them to the aerospace sector to compete with some of these other high-tech sectors. ” That’s where Boeing’s 100 year heritage of aerospace innovation is important.

“I think the one advantage we will always have, in aerospace and at Boeing, is the kind of things we work on, the mission we have as a company,” Muilenburg reflects.

“Do you want to build applications for a software company or do you want to build machines that revolutionise the economy, global travel, space travel, and protect freedoms around the world? “I think we have a mission that is bigger, more attractive, more exciting than any other kind of company, so connecting the importance of what we do to this talent pipeline, getting them excited about STEM in general, but then attracting them uniquely to the aerospace industry because of the kind of work we do, that’ll be one of my strategic thrusts, what I like to call a people-first strategy, in understanding that the most important investment we’re going to make is in our talent. ” Some of that talent is in Australia, where Boeing has over 3,000 employees and its biggest footprint outside of the US.

“We do some leading-edge research and technology work here, . . . and I like to think of Australia as a smaller version of the whole Boeing enterprise,” he observes, where “we have got deep capability [and] deep talent”.

Boeing’s Australian operations, have, says Muilenburg, “enough critical mass that we can touch every aspect of what we do at Boeing. But it’s small enough that we can be agile and give people the opportunity to experience a broad set of responsibilities in one location. And, so it tends to be a great place for us to develop talent, to give them opportunities to work across our commercial and defence sectors, to carry a level of responsibility that might be harder to achieve in the 160,000-person enterprise that we have in the US. ” And, says Muilenburg, Australia “is a place where we can engage our customers with innovation and do it rapidly, and I think it helps make us a better company. It’s a key part in how we are going to create an even more global Boeing for our second century. ”

I like to think of Australia as a smaller version of the whole Boeing enterprise.