During Boeing’s earnings call earlier this week, CEO Dave Calhoun, who had announced he is stepping down by the end of the year, stated that his preference for a replacement would be a Boeing insider. In our view, this would be a serious mistake for the company, which needs to undergo a cultural transformation.
The corporate culture that made Boeing successful from the start of the jet age through the 1990s was engineering-driven. That culture changed after the merger with McDonnell-Douglas when former GE employees who were disciples of GE CEO Jack Welch introduced the concept of managing shareholder value. Those concepts, which weaken a company over the long term, occurred at both GE and Boeing and other companies that followed that practice.
