Boeing CEO Jim McNerney illustrates the power – and necessity – of innovation at the Kellogg Impact Series in Chicago By Rachel Farrell
2/19/2010 - In an increasingly competitive global economy, innovation is key to the success of any firm. But it isn’t always easy.
|That was the message stressed by Jim McNerney, chairman, president and CEO of The Boeing Company, in his Feb. 19 talk “Maintaining a Competitive Edge in Today’s Global Economy” at the Kellogg Global Insight Luncheon. The gathering was the second of five events in the Kellogg Impact Series, a world forum on the future of business, innovation leadership and society. |
To illustrate the potential roadblocks to innovation, McNerney shared Boeing’s experience with the rollout of a new airline technology that “we knew could change the game of commercial aviation for decades to come,” he said.
This technology, which reduced fuel use and noise and offered a better experience for airline passengers, was initially slated for the Sonic Cruiser — Boeing’s fastest plane. But in a post-9/11 world, speed and athleticism weren’t top priorities for Boeing’s customers.
“By listening to them, we discovered that the real value they were seeking was efficiency, range, overall economics and environmental performance,” McNerney said. Boeing found a better home for the technology in the 787 Dreamliner, which could fly 25 percent farther, had lower cabin pressure and produced fewer emissions. In the end, the 787 had record-breaking sales. The “Sonic Cruiser would have been a huge mistake,” said McNerney.
McNerney cautioned that firms must not lose sight of productivity or the importance of maintaining a solid financial position. “Game-changing innovation is not easy … and it never goes as planned,” he said. “But I’d argue that the economy we live in demands that we answer these challenges and not be intimidated by them.”
McNerney added that the United States must also invest in the education of its workforce in order to compete with the skilled laborers of Brazil, Russia, China and India. He praised the Kellogg School and Northwestern University for their efforts to address the United States’ “growing innovation deficit,” a phrase coined by Google CEO Eric Schmidt. “I’m confident in our future, because I know that great institutions like Kellogg are preparing tomorrow’s business leaders for these challenges.”
Complementing McNerney’s address was a panel discussion by Interim Dean Sunil Chopra and Associate Professor of Management & Strategy Benjamin F. Jones, who shared their perspectives on the impact of the global economic recession on multinational businesses.
Jones shared three principles for multinationals to consider in the aftermath of the downturn: beware of your own leverage, seek stable markets for sales and consider weaker markets for production.
“There are some real opportunities” during times such as these, Jones said. “Companies that are leveraged are liquidity-strained. If you have deep pockets, there are nice acquisition opportunities.”
That bodes well for the United States, a country that has liquidity, access to different global markets and technological knowledge, Jones said. “Those can be really substantial [tools] — even amidst global uncertainty.”
Building on the spirit of last year’s international centennial celebration, the Kellogg Impact Series is a sequence of global events designed to foster lifelong learning and engage the worldwide Kellogg community. Subsequent conferences will be held in Hong Kong (March 19-20), San Francisco (May 11) and New York (June 3), and will feature Kellogg faculty and distinguished guest speakers. For more information, visit http://alumni.kellogg.northwestern.edu/impact/.