Insights from McKinsey Interview with Bombardier CEO Pierre Beaudoin

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.

3 Comments

  1. John Santomer

    March 11, 2011 - 10:42 pm

    Dear Jon,
    Inspiring! No endeavor is an easy road to success…It puts a big damper if an organization does not know how to “really” value their manpower asset. We talk about market situations and regional currency rates. It does not amount to anything hiring new people for the purpose of injecting “new blood” to the business. New mind sets brought by these people do not easly mesh with the organization. (And yes, they will always say it was never their aim to do so in the start.) These people may have new and great ideas and although this resoundingly sounds as resistance to change, sometimes new people tend to establish their name at the quickest time possible making the organization suffer more. They tend to want to implement practices, processes and culture brought from their previous work environs not thoroughly studying what effects it will bring to the new company. They think its a proven way and is the only way as they have brought this from their previous success stories not understanding that things are a lot different in their new post. Where does that leave the older employees of the company? With lower salaries, lower self esteem and no more hope of promotion(as it was already filled up by the new head even if he next in line was doing the years of hard work). Looking at additional stress of adapting to yet another “new and proven” procedures, where does that leave employee engagement? Can’t wait to roll out GDI survey inquiries this early…! I just hope it will be heard…

  2. Joseph

    March 14, 2011 - 1:28 pm

    Jon.
    Hats off to the CEO of Bombardier. Lean works when the people in power stick to their policies through the HARD times as well as the EASY times.
    People will follow leadership that says what it does and does what it says.
    In the video of the visit by Bombardier to Paul Akers factory the last person to speak referred to a person that was retiring from a company. The person said, “For 25 years you paid me for my hands. For the same money you could have got my brain”. This was a very profound observation by the retiree.
    In a Lean company this statement could not be made because 100% of the work force are contributing in mind and body.
    I also like the statement about goals not needing to be 100% effective. If the place is working to true Lean then the team will be continually improving. So they will get there in the end anyway.
    I think it was JFK that said, “Ask not what the employee can do for the company but what the company can do for the employee.”
    Have a nice day.

  3. John Santomer

    March 20, 2011 - 2:13 am

    Dear Jon,
    Also worth noting from J.F. Kennedy…”Change is the law of life. And those who look only to the past or present are certain to miss the future.”
    I beleive our friend Joseph was referring to – “And so, my fellow Americans, ask not what your country can do for you; ask what you can do for your country.” – John F. Kennedy.
    Although, I doubt that all the companies would agree with his version…It’s worth a try…