Building a World Class Culture Mckinsey Article

Topics: Bombardier, Bombardier Aerospace, Bombardier Recreational Products Pages: 11 (3761 words) Published: March 10, 2011
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“Flying people, not planes”:
The CEO of Bombardier on building a world-class culture
Bruce Simpson

Pierre Beaudoin explains how a company driven by engineering goals learned to focus on customer expectations, teamwork, and continuous improvement.


“Flying people, not planes”: The CEO of Bombardier on building a world-class culture

Canada’s Bombardier was founded in 1942 to make snowmobiles and similar equipment. Today, it makes trains and airplanes and is the world’s number-one train manufacturer and number three in civil aircraft.1 The company’s revenue and stock price have held up during the downturn. Over the past couple of years, it has significantly boosted its investments for growth, most notably an entirely new airplane design: the CSeries, a transcontinental commercial airliner with significantly lower emissions and running costs than existing planes have. Pierre Beaudoin, CEO and president since 2008, attributes the company’s resilience in large part to its culture. He led a complete transformation of that culture over much of the past decade, beginning as president of Bombardier Aerospace. The transformation changed Bombardier from a company driven by engineering and manufacturing goals, with deep cultural divisions, to one focused on customers, an engaged workforce, and continuous improvement. Beaudoin talked with McKinsey’s Bruce Simpson at the company’s Montreal headquarters about how he persuaded engineers to pursue “soft” goals and discussed the business value of implementing them. The Quarterly: You became president of the Aerospace Division in 2001 and very quickly began a transformation. What was happening?

We’d gotten into the aerospace business in 1986, and we grew rapidly from about 12 aircraft a year to about 400, going from a small player in the industry to leading in the business aircraft and regional-aircraft segments. To do that, we had organized as functions rather than business units, and responsibilities were not clear across the organization. This served us well for the growth period because engineers designed products, manufacturing people manufactured—we had very strong functions that gave us a lot of focus. But we forgot about the customer and about delivering a good experience overall. So in 2001, we had an organization that was very proud of being number one and had all kinds of metrics to measure why we were very good. But when we talked to our customers, they were saying we weren’t very good. And when business slows down and you’ve got issues, you’re going to have to fix them. The Quarterly: What led you to focus on culture? Pierre Beaudoin: Everyone in management recognized we had a problem but insisted it wasn’t in their department. So my leadership team and I quickly realized that the division would be very hard to transform if we only focused on fixing this piece of hardware or fixing that system, because the people in the system thought that what they were doing themselves was working well. One of the important initiatives that helped me

Pierre Beaudoin: For us, 2001 was a very challenging year. Obviously, 9/11 was a shock to the airline industry. But, in that same year, we also 1

understand how to talk about the problems was surveying our employees. They were telling us that we’re very focused on hardware. But I knew that the customer doesn’t really care about the hardware; he cares about his flight. We had employees explaining that the customer shouldn’t really care if the video didn’t work [as long as] the plane actually flew. But if the number-one thing for the customer is the experience he gets in the cabin, who are we to tell him he’s wrong? We needed employees to understand we were flying people, not planes.

These rankings are calculated based on a mix of existing orders for equipment (such as rolling stock, locomotives, and systems), combined with revenue from maintenance, signaling...
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