Innovation Challenges of the Boeing 787

...

A crucial irregularity within the development of the 787 was the mishandling and switching between a more open or closed innovation concept. The fact that Boeing realized that “not all smart people work for” them and that they needed external R&D to deliver on the new high tech plane is a clear indicator that they were opting for an open innovation strategy. This strategy is logical and necessary since planes are highly complex products for which one firm could never have all the expertise under one roof. But Boeings outsourcing decisions were not taken as they should have been to make best use of internal and external ideas but rather to keep “manufacturing and assembly cost low, while spreading the financial risk of development to Boeing’s suppliers”. Boeing failed to view the subcontractors as partners with which one can share intellectual property and where in some cases passing on knowhow in early stages can benefit the project in the long run. Their lack of know how meant that they were not able to properly complete the very important up-front planning and relative cost estimations but rather passed on mandates to, seemingly, delegate responsibility and risk. Without clear guidance and necessary support the sub-contractors delivered major sub assemblies that did not fulfill the requirements like in the case of the wing boxes where new brackets needed to be added to the already built designs. Additionally, Boeing was unable to create an environment that would allow for open innovation to flourish. For example By only penalizing delays and not rewarding good performance. Boeing also failed to include internal employee in the outsourcing decision making process which would have resulted in more overall support of this approach. The idea of sharing ideas and improving visibility as well as costs was not met through the introduction of the new web-based tool. It much more had the opposite effect and led to mistrust between suppliers. All these points are a clear sign that they were misusing open innovation principles and sometimes switched to a more closed approach.

Finally, Boeing failed to understand one crucial part of modern innovation; being that the idea of technological advancement is not only the engineers job but has to be lived by the entire organization and everyone in it. This is especially true in case of the highly innovative 787. The obvious disinterest of the top management team in the “how-do-you-design-an-airplane stuff” is just one sign of that. The move from Seattle to Chicago, was a disconnection from the most crucial part of the business at that time. With this lack of constructive leadership it was clear that the suppliers and internal workers were missing a standard to live by.

Overall, Boeings misconduct surrounding the open innovation principles, the change in business model, the false reasons for outsourcing and lack of leadership resulted in various problems that ultimately led to billions over budget and years of delay.

...