The True Tale of Boeing's 737 Max Woes: Out-of-Cycle Strategy
In a world that once celebrated the tenacity of execution over the finesse of planning, the tale of Boeing's 737 Max is a sober lesson for modern business strategy. The adage that "even poorly crafted strategy well executed is far better than elegant strategy poorly executed" used to be the guiding star for organizations. However, Boeing's plight with the 737 Max aircraft is a testament to the seismic shift in this perspective, especially in the context of rapid economic and technological evolutions post-2012.
Before understanding the intricacies of Boeing's strategic missteps, let's rewind to the pre-2012 era. Strategy was all about execution. The business world was less volatile, changes were more gradual, and a well-executed plan could carry even the most mediocre strategy across the finish line. But this was before the digital revolution upended the traditional playbook.
Post-2008, the business environment has been transformed by various drivers: the rapid advancement of cloud computing, widespread business process digitization, an influx of liquidity in private markets, and hyper-accelerating investment in business process development. These forces have made the markets more dynamic, competitive, and unforgiving than ever before. In such a landscape, a well-crafted strategy is no longer a luxury—it's a necessity.
Enter the Boeing 737 Max series. While the headlines have been dominated by the quality of engineering and manufacturing failures leading to tragic accidents, the deeper issue lies in a strategic misalignment that predated these events. Boeing, a titan of the aerospace industry, trailed behind Airbus's A321 Neo, an innovative airframe that reset market expectations for single-aisle aircraft. Realizing they were significantly behind in developing a competing new airframe—a process that requires years and billions of dollars—Boeing opted for a strategic shortcut. They decided to retrofit the existing 737-900 airframe with larger, more efficient engines.
This decision cascaded into various engineering issues, as the new engines altered the aircraft's aerodynamics, making it prone to stall. The Maneuvering Characteristics Augmentation System (MCAS) was introduced to counteract these tendencies. However, the software solution, coupled with a critical design flaw that relied on a single sensor, proved to be fatally inadequate.
Boeing's predicament clearly indicates the price of being out of cycle on strategy. Once the market has shifted, catching up can be a Herculean task, especially in today's swift-moving business environment. Being out of cycle on strategy, as seen with Boeing, can lead to nearly unrecoverable situations.
So, what must organizations do to avoid finding themselves in a similar predicament? Here are comprehensive steps to ensure strategic alignment with the market cycle:
Embrace Decision Science: Executives need to realize that intuition alone won't suffice. Decision quality is paramount, requiring a systematic approach that leverages data analytics and predictive modeling. Decisions must be informed by rigorous analysis and a deep understanding of market dynamics.
Institute a Culture of Continuous Innovation: Strategy development must occur in the open, fostered by an environment that prizes innovation and experimentation. Strategy and innovation labs should be the new boardrooms, where ideas are tested, refined, or discarded based on empirical evidence and market feedback.
Commit to Ongoing Learning and Adaptation: In a business landscape that is continuously evolving, the only sustainable advantage is adaptability. This requires an ongoing commitment to learning—about new technologies, market trends, and evolving customer preferences. It also involves a willingness to pivot quickly when the market demands it.
Boeing's 737 Max saga is a stark lesson for businesses across all sectors. An out-of-cycle strategy can lead to dire consequences, and the gap between planning and execution has never been more critical. Organizations can remain in sync with the ever-changing market rhythm by prioritizing decision science, nurturing innovation, and committing to continuous learning and adaptation. The tale of Boeing is a cautionary one, but it's also a clarion call for modern businesses to align their strategic compass with the pace of today's digital economy.
