I recently read an opinion piece called “Greatest Long-Term Threat To Boeing Is The Loss Of Talent,” written by Richard Aboulafia for the industry-leading magazine Aviation Week and Space Technology. Last month, aircraft manufacturer Boeing (NYSE: BA) moved many of its defense services and support functions out of Seattle, citing competitive and cost concerns. While the author agrees with the company’s line of reasoning, he says that “it’s also important to remember that when a company takes aggressive action to move jobs and reduce labor costs, it always creates risk. In particular, key skills and experienced workers can be lost, threatening execution and company capabilities.”
This article had me thinking about what it takes for a large company like Boeing to retain talent in an increasingly competitive business environment. As the author suggests, companies in a growth phase need to focus on attracting and retaining talent, but a company in a “retrenching” phase needs to focus on costs. The analogy given is Tesla versus General Motors, respectively. This in turn reminded me of a talk I attended a few weeks ago by Brian Welle, Director of People Analytics at Google. In his day-to-day role, Welle “conducts research and designs programs that strengthen Google’s Human Resources initiatives.” One of his primary areas of research is on the “unconscious bias,” a set of factors caused by our environments and experiences that influences our decision-making capabilities. Although Welle’s primary focus is to help Google employees become aware of and reduce their personal unconscious biases, during his talk he frequently mentioned the company’s overall drive to recruit and retain talent. The underlying assumption here is that Google remains in a growth phase – but I wonder what will happen when (or even if) Google reaches a point when it needs to shift focus to cost-based “retrenching” like that referred to in Aboulafia’s article. Obviously, this would require viewing Google as a mature corporation – hardly the case given the growth in the technology industry and Google’s new monetization initiatives.
Furthermore, I wonder why a company like Boeing doesn’t have a similar human resources structure to Google. This may seem like an outlandish idea, but I feel that many of the human resources functions at Google can be replicated in the wildly different industry that Boeing operates in. Welle’s People Analytics team focuses on organizational behavior (OB) issues as they pertain specifically to Google – so why doesn’t Boeing focus on the OB issues that affect the aerospace & defense industry? In my earlier posts “The Failure of Crew Resource Management (Part I, Part II, and Part III),” I focused on the failure of an OB system in the aviation sector (Crew Resource Management or CRM). I think it would be interesting to see Boeing expand its human resources functions to address industry-wide OB concerns like CRM. In my mind, Google is able to recruit and retain the best talent because its human resources professionals are focused on remedying OB issues that affect the broader industry, such as the lack of women in technology and the unconscious bias in most recruiting decisions.
At present, the cost issue remains crucial for Boeing’s short-run competitive strategy. But perhaps a shift towards the Google human resources model could help Boeing with its recruiting and retention issues in the long run. It’s definitely something I want to look into more. In Aboulafia’s words: “Boeing management needs to remember the greatest long-term threat to [Boeing Commercial Airplanes] isn’t the cost of labor; it’s the loss of talent and the erosion of core capabilities.”