Insights from McKinsey Interview with Bombardier CEO Pierre Beaudoin

By Jon Miller | Post Date: March 9, 2011 4:16 PM | Comments: 3

An interview in this month's McKinsey Quarterly with Bombardier CEO Pierre Beaudoin shares the lessons learned during the transformation across the past decade. Titled "Flying people, not planes" the article explains how a hardware-focused, engineering-driven aerospace company became a more people-driven lean organization by tackling the thorny issue of company culture.

Bombardier has grown rapidly and successfully through the last couple of recessions, weathering even the shocks the aerospace and transportation industries have gone through. Beaudoin tells how Bombardier transformed itself from a siloed organizations with a hero culture where problems were not exposed to one marked by teamwork, customer-focus and continuous improvement. The following is my summary of a few high points from the article.

Lesson #1: Make sure people know what your values are

Although Bombardier had big and detailed strategic plans, creating understanding and engagement in these plans across 30,000 employees was a challenge. The result of employee surveys was that they "didn't know what we really valued as an organization" and therefore it was difficult to actively support this direction. Beaudoin said:

For any team to pull in the same direction, it has to know what you're looking for and feel a connection.

Lesson # 2: Poor goal alignment is better than no goal alignment

Some think that the ultimate in the lean approach to managing strategy deployment is to have near-perfect goal alignment through a process such as hoshin kanri. While in the outer appearances a lean organization's behavior can seem to have an almost mechanical sense of alignment, in reality it is a lot more messy and human. There is a lot more discussion about missed targets, "catch ball" about unclear strategies, and general learning from failures. As with any process, practice helps us approach mastery when it comes to setting personal and team goals linked to corporate goals. Beaudoin explains is better to start with poorly aligned goals:

Why? Well, that takes us to measuring something. And if that group of employees learns to work as a team, to focus on those goals, then you say, "OK, now we're ready to get a little bit tougher in the way the goals are defined."

Lesson #3: Senior leaders should set and stick to goals for several years

The CEO of Bombardier explains that these initial goals for transforming into a world class operation were "creating a rewarding and safe workplace, providing superior customer service, and reducing waste" from all activities. These seem obviously simple, almost inadequate. But underlying these is Beaudoin's belief that "our job as leaders should be pretty simple" if leaders select just a few goals and stick to them for several years. He puts this in a succinct insight worth noting:

It doesn't work if you change goals year to year. In a large organization, people can't follow you that way.

Lesson #4: The soft stuff is the hard stuff

An organization can often be brought down by the same thing that helps it rise to the top, especially when an this is excellence in a specific technical field or capability. The interview mentions this idea several times, giving examples of Bombardier managers telling each other "why we are so good" rather than talking openly about problems in the early days of the culture change. Rather than taking aim at the technical solution to how business processes were organized (the hard stuff), Beaudoin placed much of his focus on leadership conversations regarding the importance of behavior change. He explains "if we did the soft stuff right, our employees, with our help, would be more able to do what they're supposed to do" such as make processes more efficient. Working on the so called soft stuff takes longer but has proven effective for Bombardier:

The goal was to really enable the front line to take a lot more initiative. We didn't get it done rapidly; you don't change a culture rapidly.

Lesson # 5: Define an organization's success through the people in it

Continuing on the theme of the cultural aspect of Bombardier's transformation, Beaudoin says, "The way I define success is that we have a much more engaged organization today." He cited quantitative survey results, but more importantly perhaps is the qualitative indicator:

I'm particularly happy because, in past recessions, the first thing that fell was employee engagement, and this time it's holding firm.

We have had the privilege of assisting Bombardier in small ways on their lean journey over the years through a training sessions, projects and benchmarking trips to Japan. Most recently a group from Bombardier Aerospace in Canada visited with our friend Paul Akers to grasp what employee engagement, teamwork and continuous improvement means to them. Here is the video.

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