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Did a 1997 merger ruin Boeing?

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Re: Did a 1997 merger ruin Boeing?

#231

Post by ARandomerDude »

KennyBlanken wrote: post #173
stg22 wrote: post #140

The role of McDonnell-Douglas is exaggerated. Boeing had achieved pretty close to a monopoly in the mid-1970s, but things had changed by the mid-1990s. 1. Domestic airlines protected by regulation had been effective monopolies and Boeing's engineer-led culture thrived in an environment where airlines didn't care about costs. But that environment died with airline deregulation in 1978 and an engineer-led culture made…

What's wild is that all this happened even with the NSA conducting industrial espionage on Airbus on behalf of Boeing and M-D.

Is the NSA discovering bribery really “industrial espionage”? I don’t like the NSA but that characterization is a bit of a stretch.

Re: Did a 1997 merger ruin Boeing?

#232

Post by djmips »

aslatter wrote: post #150
GeekyBear wrote: post #141

Earlier quoted context omitted.

> “I have my own theory about why decline happens at companies,” Jobs told me: They make some great products, but then the sales and marketing people take over the company, because they are the ones who can juice up profits. “When the sales guys run the company, the product guys don’t matter so much, and a lot of them just turn off. It happened at Apple when Sculley came in, which was my fault, and it happened when B…

I keep this clip open in a browser tab so I can go back to it from time-to-time: https://www.youtube.com/watch?v=X3NASGb5m8s It's the same basic message from Jobs, but this time about Xerox.

Don't be a tonerhead!

Re: Did a 1997 merger ruin Boeing?

#233

Post by morkalork »

lmm wrote: post #148
atleastoptimal wrote: post #75

I feel like this pattern occurs in too many companies across all sectors: 1. Company is product-quality focused 2. Beats competition and creates mini-monopoly 3. Sales becomes somewhat inelastic to changes in quality 4. This leads "cost-cutting" and marketing focused execs/decision making to beat out product quality execs/decision making 5. Company's product quality takes predictable linear path to the bottom

Reputation is an asset like anything else. It's probably economically rational to build up a reputation for good quality while you're small, and then switch to extracting as much value as you can from that reputation once you've gotten big. (I don't like it but I don't see any way to prevent it being the most profitable course)

I think it's the McNamara fallacy taking hold over time.

>But when the McNamara discipline is applied too literally, the first step is to measure whatever can be easily measured. The second step is to disregard that which can't easily be measured or given a quantitative value. The third step is to presume that what can't be measured easily really isn't important. The fo[u]rth step is to say that what can't be easily measured really doesn't exist. This is suicide.

Cutting corners on something can save money now and can be measured but the hit to reputation can't be.

Re: Did a 1997 merger ruin Boeing?

#234

Post by epistasis »

naasking wrote: post #229
stg22 wrote: post #140

The role of McDonnell-Douglas is exaggerated. Boeing had achieved pretty close to a monopoly in the mid-1970s, but things had changed by the mid-1990s. 1. Domestic airlines protected by regulation had been effective monopolies and Boeing's engineer-led culture thrived in an environment where airlines didn't care about costs. But that environment died with airline deregulation in 1978 and an engineer-led culture made…

> an engineer-led culture made it more difficult to compete in a cost sensitive environment. I know this is a common sentiment, but I don't quite get it. Engineering is often about optimizing multivariate functions, and cost is just another variable to optimize. If you frame it properly to engineers, they can solve cost problems too.

Agreed. Maybe I have become too much of a PHB, but I find that engineers (or scientists in my case) really love having cost as one of the visible metrics to optimize for, and will generally do a fantastic job at evaluating it amongst quality concerns. At least much better than management can do.

Re: Did a 1997 merger ruin Boeing?

#235

Post by idiotsecant »

naasking wrote: post #229
stg22 wrote: post #140

The role of McDonnell-Douglas is exaggerated. Boeing had achieved pretty close to a monopoly in the mid-1970s, but things had changed by the mid-1990s. 1. Domestic airlines protected by regulation had been effective monopolies and Boeing's engineer-led culture thrived in an environment where airlines didn't care about costs. But that environment died with airline deregulation in 1978 and an engineer-led culture made…

> an engineer-led culture made it more difficult to compete in a cost sensitive environment. I know this is a common sentiment, but I don't quite get it. Engineering is often about optimizing multivariate functions, and cost is just another variable to optimize. If you frame it properly to engineers, they can solve cost problems too.

Given the choice between cost optimized and safe, fast, cool, etc very few engineers are going to go for cost savings. If there's no bean counters in charge and no market cnstraints its obvious that the product is going to be really good and really expensive.

Re: Did a 1997 merger ruin Boeing?

#236

Post by CalChris »

EndorphinRush wrote: post #224
KennyBlanken wrote: post #173

Earlier quoted context omitted.

What's wild is that all this happened even with the NSA conducting industrial espionage on Airbus on behalf of Boeing and M-D.

This isn’t Reddit. Do better. The article referencing this and Airbus is rather sensationalized and cuts off half the quote. This was said in reference to Airbus bribing foreign officials to buy from them. The full quote reads: "When we have caught you at it, we haven’t said a word to the U.S. companies in the competition. Instead we go to the government you’re bribing and tell its officials that we don’t take kindly…

https://archive.is/hqfyE

Re: Did a 1997 merger ruin Boeing?

#237

Post by epistasis »

idiotsecant wrote: post #235
naasking wrote: post #229

Earlier quoted context omitted.

> an engineer-led culture made it more difficult to compete in a cost sensitive environment. I know this is a common sentiment, but I don't quite get it. Engineering is often about optimizing multivariate functions, and cost is just another variable to optimize. If you frame it properly to engineers, they can solve cost problems too.

Given the choice between cost optimized and safe, fast, cool, etc very few engineers are going to go for cost savings. If there's no bean counters in charge and no market cnstraints its obvious that the product is going to be really good and really expensive.

Much of engineering is "bean counting" but not beans. I think that engineers will do some CYA around safety, but they also appreciate the money arguments because they are inherently numeric in their evaluations.

Re: Did a 1997 merger ruin Boeing?

#238

Post by MikePlacid »

KennyBlanken wrote: post #173
stg22 wrote: post #140

The role of McDonnell-Douglas is exaggerated. Boeing had achieved pretty close to a monopoly in the mid-1970s, but things had changed by the mid-1990s. 1. Domestic airlines protected by regulation had been effective monopolies and Boeing's engineer-led culture thrived in an environment where airlines didn't care about costs. But that environment died with airline deregulation in 1978 and an engineer-led culture made…

What's wild is that all this happened even with the NSA conducting industrial espionage on Airbus on behalf of Boeing and M-D.

Industrial espionage does not necessarily improves engineering culture.

When I visited NITsEVT, a big-big-big organization dedicated to adapting of the stolen IBM 360/370 software to Russian language and Russian computer variants - I was amazed at how low the software culture was there. It looked like the only way to implement something was to look at how some American (but not necessarily bright) person has implemented some similar thing.

The whole “adaptation” project led to overall degradation of software culture as compared to 60s, when a lot of Russian system software was an original one. Or so a lot of people were saying.

Re: Did a 1997 merger ruin Boeing?

#239

Post by jonhohle »

idiotsecant wrote: post #235
naasking wrote: post #229

Earlier quoted context omitted.

> an engineer-led culture made it more difficult to compete in a cost sensitive environment. I know this is a common sentiment, but I don't quite get it. Engineering is often about optimizing multivariate functions, and cost is just another variable to optimize. If you frame it properly to engineers, they can solve cost problems too.

Given the choice between cost optimized and safe, fast, cool, etc very few engineers are going to go for cost savings. If there's no bean counters in charge and no market cnstraints its obvious that the product is going to be really good and really expensive.

So make cost optimization cool. I always enjoyed getting rid of production hardware and running as lean as possible within operational constraints. Incentivize cost reduction with benefits proportional to the savings.

You know what’s cooler than an expensive thing? A high quality thing with higher margins. A very well known and highly profitable company has taken that model pretty far (like trillions in valuation far).

Re: Did a 1997 merger ruin Boeing?

#240

Post by bee_rider »

epistasis wrote: post #201
aslatter wrote: post #150

Earlier quoted context omitted.

I keep this clip open in a browser tab so I can go back to it from time-to-time: https://www.youtube.com/watch?v=X3NASGb5m8s It's the same basic message from Jobs, but this time about Xerox.

I'm curious when this was recorded, but my guess is early 2000s or maybe late 1990s? With how Apple has avoided ever becoming a monopoly in pretty much any area, and instead tries to just take the top most profitable customers, it really meshes well with this idea of not becoming a monopoly and having the company rot. Edit: looks like this might be from Triumph of the Nerds, a series released on PBS in 1996. So befor…

That’s an interesting thought. I always assumed they went for the upscale market because that’s where the profit margin is. But also, it does seem to let them pull in a ton of profit while not ever becoming a monopoly or the dominant player.

I think they are only the majority in tablets, right? And tablets seem to be, oddly enough, a bit stagnant.

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