A JOURNEY TO EXCELLENCE

1

• A JOURNEY TO EXCELLENCE
• IN TWO ORGANIZATIONS
• David Spong

2
WHY AM I HERE?
MAYBE OUR APPROACH WORKS?
3
OUR QUALITY JOURNEY

• 1991 2000
• BoeingAirlift Tanker Programs
• 1998 Baldrige Winner

2000 to 2004 BoeingAerospace Support 2003
Baldrige Winner
4
STARTING POINTS
Aerospace Support 2003 Recipient
Service
Manufacturing
Complex Bus./Sites/Functions
Primarily one program
Stable
Chaos
Not recognized
Yes
Some
No
Yes
None
Some
Many
Dispersed 130 locations
Primarily one
Improvement
Turnaround
Overall business model
Integrating existing approaches
5
THE BOEING COMPANY
6
AIRLIFT AND TANKER PROGRAMS LOCATIONS
Manufacturing Organization Headquartered in Long
Beach, CA 8,106 Employees in 7 States
7
FROM CRISIS TO SUCCESS
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FROM CRISIS TO SUCCESS
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THE LAW OF CHANGE
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ALIGNING THE FOCUS
Strategic Direction
Tactical Direction
Work Group
Individual
(93)
(Summer 95)
(91)
Planned Journey
1000 Unaligned Projects
Malcolm Baldrige Principles
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REINVENTED RELATIONSHIPS WITH CUSTOMERS
On-Site Customer Oversight
Airlift Tanker
External Customer
One Team Committed to Program Excellence
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UNDERSTANDING CUSTOMER SATISFACTION
CUSTOMER SATISFACTION
Product and service excellence
Relationship excellence

• High quality, on time, at cost
• Meet customer expectations
• Timely and competent support
• Anticipate demands

• Sensitive to customers point of view
• Understand customer expectations
• Responsive to customer requests
• Keep our commitments

Delivering what the customer wantsflawlessly
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PROCESS MANAGEMENT
AN APPROACH TO. . .

• Cover everything we do
• Manage and improve through a single, disciplined
  approach
• Empower Owners

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CULTURAL CHANGE
1993
1994
1992
1995
1996
1997
1998
2000
1999
180
150
120
90
60
30
Days
0
-30
-60
-90
-120
-150
-180
P30
P5
P10
P15
P20
P25
P35
P40
P45
P50
P55
P60
Aircraft
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EMPLOYEES BELIEVE IN QUALITY
Percentage of Respondents
100
1998 - 88 1999 - 95 2000 - 90 2001 - 93
90
80
73
72
70
70
70
68
68
67
67
65
65
65
64
60
Percent of employees selecting one priority over
another
50
40
36
35
35
35
33
33
32
32
30
30
30
28
27
20
10
0
Quality vs. cost
Quality vs. schedule
Schedule vs. cost
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AIRLIFT TANKER IMPROVEMENTS
600
550
500
450
TQMS-IE
Cal Qual
MB
400
400 Points!
Baldrige Mid-Range Score
300
200
1992
1993
1994
1995
1996
1997
1998
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LEADERSHIP REQUIRED
How Good Others Think You Are
3
2
1
How Good You Think You Are
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THE JOURNEY TO A ZEOLOT
1991
1996
Harry Stonecipher CEO
John McDonnell CEO
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THE JOURNEY TO A ZEOLOT
1991
1996
Harry Stonecipher CEO
John McDonnell CEO
And Beyond
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THE JOURNEY TO A ZEOLOT
. . . 2004 . . .
1991
1996
1998
?
John McDonnell CEO
Harry Stonecipher CEO
Award Ceremony
And Beyond
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OUR QUALITY JOURNEY
2000 to 2004 BoeingAerospace Support 2003
Baldrige Winner

• 1991 2000
• BoeingAirlift Tanker Programs
• 1998 Baldrige Winner

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ORGANIZATIONAL ALIGNMENT
The Boeing Company
Aerospace Support
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STARTING POINTS
Aerospace Support 2003 Recipient
Service
Manufacturing
Complex Bus./Sites/Functions
Primarily one program
Stable
Chaos
Not recognized
Yes
Some
No
Yes
None
Some
Many
Dispersed 130 locations
Primarily one
Improvement
Turnaround
Overall business model
Integrating existing approaches
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AEROSPACE SUPPORT PRESENCE
12,303 Employees in 131 Locations
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DUAL BUSINESS IMPERITIVE
Aerospace Support is a fairly new organization
with a focus on both running and growing the
business
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INITIAL FOCUS

• Created a Leadership System and Operating
  Principles
• Identified and Deployed Overall Initiatives
• Employee Involvement
• Process Based Management
• Management by Information
• Assigned Executive Champions
• Adopted Baldrige Criteria as the Business Model
• Assessed the organization by sites and overall

• Customer Satisfaction
• Enterprise Planning Process

Established a culture of excellence and
continuous improvement
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OUR LEADERSHIP SYSTEM
Set and Communicate Direction
Continuously Improve
Be Role Models
Vision Values
Integrity
Learning
Organizational Employee Learning
Quality
Corporate Citizen
Stakeholder Requirements Expectations
Organize, Plan, and Align

• Customer
• Work force
• Suppliers
• Community
• Shareholders

INVOLVE AND COMMUNICATE
Diversity
Teamwork
Safety
Empower Teams
Motivate Employees
Sharing Supportive
Innovation
Customer Satisfaction
Agility
Perform to Plan
Reward Recognize
Analyze Compare
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OUR MISSION, VISION, AND VALUES
Mission Provide world-class sustainment solutions
to our aerospace customers
Values Leadership Integrity Quality Customer
satisfaction People working together A diverse
involved team Good corporate citizenship Enhancing
shareholdervalue
Vision People working together as the worlds
number one provider of innovative sustainment
solutions
10 Year Objective We will be a recognized
world-class, global business, providing
sustainment solutions aligned with our customers
evolving needs
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OPERATING PRINCIPLES

• We insist on integrity, first and foremost
• We tell it like it is
• We communicate openly and candidly in all our
  dealings
• We respect, honor, and trust one another
• We work toward consensus
• Disagreement is healthy and encouraged, but once
  a decision is made,we proactively support it
• We have one conversation at a time
• Our silence is consent
• We focus on issues and ideas rather than titles
  or personalities
• We actively listen and question to understand
• We do not attack the messenger
• We identify clear objectives and expectations for
  our meetings
• We start on time, observe time limits, and end on
  time
• We praise in public, we coach in private
• We have a bias for velocity

Have Fun. . . Enjoy the journey and each other
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EMPLOYEE INVOLVEMENT (EI)

• Is it a Culture?
• Is it a Belief?
• Is it a Way of Life?

• Is it Teams?
• Is it Belonging?
• Is it a Process?

"It is not a new program, project or process. EI
is a cultural change in the way we treat each
other and work together. It is a journey in
which people apply their skills to improve
individual, team and organizational performance
continuously. This leads to employee
satisfaction and improved business
results. Raj Kanungo
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EMPLOYEE INVOLVEMENT LEADS TO MOTIVATED EMPLOYEES
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EMPLOYEES ARE MORE MOTIVATED
Started Baldrige
66
ESI
62
EI
50
58
54
50
2003
2002
2001
1999
2000
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BALDRIGE AS OUR BUSINESS MODEL
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APPROACH
Improvement Initiatives
Baldrige Award!
Deployed Needed Approaches
Assigned People To Lead Approaches
Site Visit
National Baldrige Application
Prepared AS-wide Assessment Document
Internal Assessment Feedback
Assigned Executive Champions
Internal Assessment Feedback
Received Awards in Kansas
Missouri Arizona
Australia
California
Florida Oklahoma
Macro-level Internal Assessment
Tasked Sites To Submit State Award Applications
Created a Business Excellence Organization
2002
2003
2000
2001
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AEROSPACE SUPPORT IMPROVEMENTS
700
AS Baldrige-based Assessment Score State/Local/Bal
drige-based Score by Major Site Award Recipient
BAL
St L
600
Wichita
So Cal
500
Aerospace Support Baldrige Win
Ft Walton Beach
Mesa
Oklahoma City
400
Baldrige Mid-Range Score
BASC
300
400 Points!
Philadelphia
200
Oklahoma City
0
100
2001
2003
2002
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AS EARNINGS PERFORMANCE
Started Baldrige
2000
2001
2002
2003
PLAN
ACTUALS
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AS REVENUE PERFORMANCE
Started Baldrige
2000
2001
2002
2003
PLAN
ACTUALS
AVG GROWTH
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WHAT DOES BALDRIGE DO FOR YOU?

• Ensures continuous improvement Across the Board
• Forces a collaborative enterprise
• Common language
• Integration between Businesses, Sites Functions
• Knowledge Sharing
• Common processes, where appropriate
• Motivates employees
• Enables breakthrough improvements
• Improves business results

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LEADERSHIP COMMITMENT AND LESSONS LEARNED

• Develop vision values and a system for leading
• Accept actively support change
• Align vision, strategies, goals, and measures
• Institutionalize priorities of Quality, Schedule
  and Cost
• Reinvent relationships with all stakeholder
  groups
• Understand customers commit to customer
  satisfaction
• Empower teams to optimize results
• Manage through systematic processes
• Assess the organization using the MB Criteria

Leadership Commitment in All Things
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OUR JOURNEY CONTINUES
It starts with leadership Great people keep it
going!