1. At Boeing, Innovation Means Small Steps, Not Giant Leaps

    April 13, 2015 by ahmed

    Roy Conner BOEINGRay Conner, the CEO of Boeing Commercial Airplanes

    Originally posted on WSJ by Jon Ostrower

    The 99-year-old aerospace giant long has focused on developing new technologies that it reserved for big projects every 15 years or so to craft the fastest—and farthest-flying jetliners—such as its 787 Dreamliner.

    Today, Boeing is centering innovation on incremental improvements that it can deliver more quickly to airlines with greater reliability and at a lower price, said Ray Conner, chief executive of Boeing’s commercial airplane unit, in an interview.

    Mr. Conner is overseeing the development of seven models to upgrade Boeing’s portfolio of jets with capacities from 125 seats to just over 400 seats, plus a new military refueling tanker. The updated products are adapting some of the technologically advanced features of the Dreamliner to models that have long been in production.

    “It’s not to say you don’t innovate,” said Mr. Conner. He wants engineers “innovating more on how to [design jets] more simplistically, as opposed to driving more complexity,” he said. “How do you innovate to make it more producible? How do you innovate to make it more reliable?”

    The shift reflects how sharply the industry has changed. Boeing Chief Executive Jim McNerney last year declared its era of technological boundary-pushing “moon shots” over. Airlines, he concluded, don’t want to pay more for advanced technology.

    Saving up a host of advanced technologies for a single new project has proved too expensive and disruptive.

    Mr. Conner likened the current landscape for selling jetliners to Apple Inc.’s iPhone. The smartphone’s starting retail price of $199 with a cellular contract has remained relatively consistent since its second model in 2008, even as each iteration is more capable.

    Boeing’s formula is aimed in part at reversing market-share losses to rival Airbus Group NV. Both companies have experienced a boom, as fast-growing airlines in Asia, the Middle East and South America and carriers with aging fleets in the U.S. and Europe have driven orders for some 5,800 jets worth $440 billion at contract prices. However, Airbus, which has generally had a more incremental approach to new planes, has eroded Boeing’s share of the high-volume market for single-aisle jets.

    Few are more familiar with Boeing’s approach to jet making than Mr. Conner, 59 years old. He started as a unionized machinist in 1977 not far from his current corner office here and held a range of jobs before taking over the commercial airplanes operation in 2012.

    With the Dreamliner, Boeing revamped not only the design of a modern jetliner, but how it’s built. The plane boasted a mostly carbon-fiber structure and advanced electrical system that replaced many pneumatic and mechanical functions.

    Boing R&D

    Design problems and an unprepared supply chain caused huge cost overruns and a 3½-year delay before delivery of the Dreamliner in September 2011. Boeing’s investment in the 787 program is now approaching $50 billion, estimates Barclays Capital analyst Carter Copeland, including research-and-development costs, new facilities as well as acquisitions of struggling suppliers. Boeing isn’t expected to start making money on a per-unit basis until next year, though the aerospace company reports the program as profitable based on its accounting method, which spreads the high early costs over many years.

    “Don’t judge our future by what’s happened on the 787,” said Mr. Conner.

    Boeing’s new approach extends to every corner of its operations. It is aggressively trying to renegotiate contracts with suppliers, which account for about 65% of its jets’ costs. Its push toward faster, better and cheaper production led Boeing in 2013 to tap Walter Odisho, a former head of Toyota Motor Corp.’s U.S. auto production to run manufacturing. The company has long looked to the Japanese auto maker for improving its processes, which are becoming increasingly automated. Both efforts helped the company save $1 billion last year, Boeing said.

    Research-and-development spending by Boeing’s commercial unit ticked up slightly last year to $1.88 billion, or about 3.1% of the unit’s revenue—below the nearly 16% in 2009 when R&D spending increased as it struggled with the Dreamliner and a revamp of its 747-8 jumbo jet.

    Boeing’s more pragmatic approach also comes as it ramps up jetliner production to unprecedented levels. It expects to deliver 750 to 755 jets in 2015, topping last year’s record, and that number could climb to more than 900 late in the decade if demand holds. A decade ago, by comparison, it delivered 290 planes a year.

    Mr. Conner said Boeing’s priority now is completing its current slate of projects on time and on budget. The seven projects include a new version of its 777 with composite wings, and upgrades of its single-aisle 737s with new engines.

    That doesn’t mean the company has given up on the idea of creating an all-new model.

    Mr. Conner said Boeing is polling customers to help conceive a new jet that seats more people than its single-aisle 737s, but doesn’t have the long range—and resulting extra weight to carry fuel—of the Dreamliner.

    Mr. Conner said the company isn’t likely to repeat the business model that created the Dreamliner, but is open to a large strategic partner to share the development costs.

    “These are things I think about all the time,” he said.

    One goal, he said, would be to design any new jetliner so its technology and production system could be scaled to eventually create a second family of planes, like its 737, which has been in continuous production for nearly a half century.

    “I think our job is make sure we totally understand what the customers are looking for and working on our ability to go execute” on a viable business case, said Mr. Conner. “And we will do that. We will flip the switch when it needs to happen.”


  2. How Portland is tackling the innovation dilemma

    January 2, 2015 by ahmed

    Portland Mayor Charlie Hales set aside $1 million in his 2013-14 budget for an “innovation fund.”
    Now he’s ready to award some of the best ideas from city bureaus with money

    Originally posted on Governing, by Steve Goldsmith

    We rightly expect a great deal from our municipal governments. We want city departments to be innovative — but not to take unwise risks. We want their projects to generate impressive long-term results — but not to cost taxpayers heavily upfront.

    Can government be at once cutting-edge and careful? It’s a paradox that for years has stymied municipal innovation in cities across the country.

    Here’s how it works: Each year, the mayor sets aside $1 million in the city budget to support the innovation fund. City bureau directors hoping to win a chunk of that funding submit project proposals, which are evaluated by a task force of private-sector professionals who consider how effectively the proposals fulfill the goal of saving the city money or making government run more smoothly. The task force makes recommendations to the mayor, who then puts the winning proposals before the city council for funding consideration.

    In its first year, the competition received 22 proposals from 10 bureau directors. Based on endorsements from the inaugural task force, the city council approved six projects for a net total of nearly $900,000 in funding. Among the winning projects were those seeking to save money (the Portland Housing Bureau was awarded $48,000 for a data-sharing program aimed at reducing data-entry costs) and save lives (the Fire Bureau got $108,000 to implement a smartphone app designed to help cardiac arrest victims receive immediate assistance).

    Another winning proposal was aimed at improving the city government’s collaboration with the private sector. The Portland Development Commission was awarded $80,000 for a program that seeks to make the city an early adopter of new technologies being developed by Portland’s startup community for use in meeting the city’s maintenance and operational needs. The funds are going toward the roll-out of technology for an online portal as well as face-to-face networking events aimed at connecting local tech start-ups with city bureaus. Even in its early stages, the program has already fostered significant cross-bureau collaboration, according to Chris Harder, the commission’s economic development director.

    With the innovation fund now in its second year, city officials are making a few changes to the initiative to inspire more and better ideas. This time around, organizers solicited project ideas from all city employees rather than just bureau directors — a change that was aimed at fostering participation from all levels of the city bureaucracy. Organizers simplified the submission form and introduced a second round of consideration for larger projects. This year’s innovation fund will also place greater emphasis on training; some of the funds will be used to pay for workshops to help managers and supervisors be more creative in their jobs.

    All of these changes are aimed at promoting new ideas throughout city government. “I think the effort itself is something that should be embraced,” Harder said of the Innovation Fund. “Particularly when you work for a bureau, to have the leadership encourage you to think that way is very helpful.”

    Portland is neither the first nor the last city to look toward competition to try to spark creative government solutions. Baltimore has its own innovation fund, which, like Portland’s version, awards competitive seed grants to city agencies with creative project ideas. In the past few years, Baltimore has funded agency projects to install “smart” parking and energy meters, put in place new fiber-optic technology for the city’s broadband network, and acquire a new, more efficient DNA analysis tool. And earlier this month, Los Angeles announced that it would launch a $1 million innovation fund to support creative projects dreamed up by city workers.

    The Portland innovation fund can in part trace its roots back to a larger and broader predecessor based in New York City. This grant competition is run by the city’s Center for Economic Opportunity and the Mayor’s Fund to Advance NYC. With support from the federal Social Innovation Fund, the center supports the replication of anti-poverty programs in New York and other cities across the country, using a competitive selection process.

    Innovation funds and other related initiatives offer an exciting new way of thinking about the problem of encouraging innovation in traditionally risk-averse government institutions. By combining an entrepreneur’s eye for creative solutions with a public servant’s mindfulness of limited resources, these initiatives have great potential to make government more efficient.


  3. Resilience – What is it and how can it help you?

    December 29, 2014 by ahmed

    What is Resilience, what are the benefits of being resilient, and how can one build their resilience? This Resilience Overview Documentary follows the story of U.S. Army Master Sgt. Jennifer Loredo as she dealt with the tragic loss of her husband, how she powered through and bounced back. Experts provide insight on what it means to be resilient and why it’s an important attribute for everyone to have.

     

     


  4. Awards Recognising Excellence in the Public Sector

    December 28, 2014 by ahmed

    A recent workshop, 27-30 October 2014, organized by the Asian Productivity Organisation investigated the importance of awards for recognizing and sharing best practices. The purpose of the workshop was to assist National Productivity Organisations in designing relevant and effective awards that supported public sector organisations on the journey to business excellence in their respective countries. Representatives from 11 countries attended. The chief experts leading the workshop were Dr. Robin Mann, Director, Centre for Organizational Excellence Research, Massey University, New Zealand, www.coer.org.nz, and Dr. Stefania Senese, Officer, Governance and Public Administration, Division for Public Administration and Development Management, United Nations Department of Economic and Social Affairs, New York, USA.

     

    Many awards were studied from APO member countries and internationally (see the spreadsheet for examples). These included awards for all aspects of business excellence including awards recognizing excellent performance in Leadership, Strategy, Human Resources, Processes, Customer Focus, Information Analysis, Innovation, Service Excellence, E-technology, and Partnerships and/or awards for specific sectors such as the health or education sector.

    Some of the issues investigated were:

    • What are the similarities and differences between the various awards for the public sector?
    • Which awards have been the most successful?
    • Why are some awards successful – what are the key ingredients for success?
    • Why are some awards not successful – what are the barriers or challenges that may hinder the impact of an award?

    Some of the benefits of awards were identified as:

    • Awards raise awareness of the importance of a subject
    • The award criteria can help to guide users on what is good practice
    • The award criteria can be used by organisations for self-assessment purposes
    • Awards motivate organisations to implement improvement initiatives
    • Winners of awards become role models
    • Award winner best practices can be shared
    • Communities of practice of award winners can be created

    Some of the concerns of awards were identified as:

    • Awards may become the destination and once achieved the organisation may revert back to their previous state
    • Organisations may focus too much attention on the award rather than on their business.
    • Awards can be expensive to administer
    • Awards if not administered effectively with an independent and fair judging process run the risk of losing their credibility.
    • Are awards the best approach to encourage organisational improvement or are there better approaches?

    The workshop enabled member countries to have a better understanding of the role of awards and how they can provide an integrated approach to assisting organisations on the journey to business excellence. For example, awards for each category of business excellence, as indicated in the Figure below, can provide the building blocks and support for an overall national award for business excellence.

     

    For more information on business excellence and awards, contact Dr Robin Mann, r.s.mann@massey.ac.nz or view over 500 award types and over 15,000 award winners and learn from their best practices by joining bpir.com.


  5. A best practice of strategic planning and deployment you can apply in 2015

    December 21, 2014 by ahmed

     

    From left Robby Thommy and Loganathan Murthy from Al Jazeera International Catering LLC with competition judges Dr James Harrington, Professor Tony Bendell and Marc Amblard, Click here for more photos

     

    In this post we will share with you some lessons from Al Jazeera International Catering (JIC) LLC, winners of the 3rd International Best Practice Competition, 2014.

    The best practice title is “SPEARS Methodology for Employee Empowerment and Inculcating Excellence”.

    So what is SPEARS?

    The SPEARS methodology is a managerial process that encourages  “excellence” to be  practiced throughout the organisation. It was designed to ensure that all staff  are empowered with proper resources and knowledge for effective decision-making.

    SPEARS consists of the following:

    • S – Setting Objectives: for all functional areas and further disseminated through individual objectives for all employees.
    • P – Provide resources: required by the staff (knowledge & tools) to perform to achieve their objectives and goals.
    • E – Empower staff: to think on their feet and raise any concerns within the organization through the Corrective Action Request mechanism.
    • A – Appraise performance: of individuals on a monthly basis through the Individual Objective monitoring system to ensure transparency in performance management.
    • R – Review & Recognize: performances of individuals as per the company policy.
    • S – Share Knowledge: and create various knowledge sharing platforms to motivate creativity in the process.

     

    An overview of Al Jazeera International Catering’s best practice

    Results:

    SPEARS has enabled JIC to achieve improvements in financial and non-financial results such as:

    • Increased employee satisfaction to 97% in 2013 from 93% in 2010.
    • Retention rate as high as 97.8%.
    • Overall staff participation levels increased to 95 % in comparison to 40% in 2010.
    • Timely customer complaint resolutions has ensured customer satisfaction levels are maintained at 96% (Overall increase by 10% when compared to 2010).
    • Some of the financial benefits of implementing SPEARS were cost reduction in operation by 10% in 2013 compared to 2010 operational cost.

    Lessons learnt:

    Some general lessons can be learnt from JIC winning the International Best Practice Competition, such as:

    1. Best practices often do not involve a technology investment: finding and applying a best practice doesn’t necessary require a big budget or investing in new high-end equipment. It could be a change in culture or management.
    2. Think out the box: the best practices you are looking for could be in a sector you have not thought about at all. Therefore, think out of the box and search for practices outside your sector. The best practice is “probably” not used by your competitors.
    3. Any organisation can apply best practices: best practices are not limited to large or well-known organisations. Whether your organisation is in manufacturing or services, young or old, or small or large it can learn from best practices and develop a winning best practice to fit its own specific circumstances.

    Full access to the best practice videos, ppts and case study of the International Best Practice Competition for 2012, 2013 and 2014 are provided to members of the BPIR.com.