Getting Stoneciphered
My first job after completing my undergraduate was to work as Electrical Engineer at the Boeing Company in Seattle, the city where I spent my childhood. And although I left the employ of the Boeing Company almost 15 years ago, I still relish the chance to read news about the company and revel when its good. The last few years have not given me much to cheer about.
First, there was the departure of the company's corporate headquarters from Seattle, the city of its founding, to Chicago. Then, there was the execrable performance of former CEO Phil Condit. Profits and the stock price plummeted while he was at the helm and the Board of Directors waited too long to let him go.
As if that weren't enough, there was also a major procurement scandal, where then-CFO Mike Sears secretly negotiated to hire an Air Force procurement officer, a Ms. Darleen Druyn- while she was still negotiating the sale of 100 Boeing 767's to the Air Force. Airbus, the European consortium and Boeing rival, is frequently accused on this kind thing -and more- but in the US it's a federal offense. No surprise, then, that Mr. Sears got sentenced to four months of federal time and a $250K fine. Ms. Druyn got 16 months- four times as much as Martha Stewart with about 1/10 the publicity.
First, there was the departure of the company's corporate headquarters from Seattle, the city of its founding, to Chicago. Then, there was the execrable performance of former CEO Phil Condit. Profits and the stock price plummeted while he was at the helm and the Board of Directors waited too long to let him go.
As if that weren't enough, there was also a major procurement scandal, where then-CFO Mike Sears secretly negotiated to hire an Air Force procurement officer, a Ms. Darleen Druyn- while she was still negotiating the sale of 100 Boeing 767's to the Air Force. Airbus, the European consortium and Boeing rival, is frequently accused on this kind thing -and more- but in the US it's a federal offense. No surprise, then, that Mr. Sears got sentenced to four months of federal time and a $250K fine. Ms. Druyn got 16 months- four times as much as Martha Stewart with about 1/10 the publicity.
Then in March of 2005 there was even more bad news, this time involving Boeing CEO, Harry Stonecipher. But it wan't his performance in the boardroom that got him in trouble. Rather, it was behavior outside of it that caused a stir. Apparently, he was let go because of an adulterous, consensual affair with a female executive at the company. This AP wire story , via Yahoo, does a nice job of placing this scandal in the context of Boeing's more recent troubles. It is also thoughtful in its appreciation for the implications of the Stonecipher affair (pun intended) on management practice more generally.
The biggest question provoked by Boeing's ouster Monday of CEO Harry Stonecipher is not what it says about how companies are changing, but whether this particular company would have acted at all if it hadn't already been shadowed by a series of ethical lapses... The situation at Boeing raises similar questions for other experts, who pondered what to make of the board's action. Nearly all said it provoked some concerns on their part but that it is hard to see Stonecipher's dismissal as part of a larger pattern. Business ethics experts, for example, say the situation hints at possible changes in the way corporate boards scrutinize executive conduct but also say it is too soon to tell if a new norm is being set.
There are so many intriguing issues raised in this article, that I could write about them all day. Instead, I'll render them as open questions:
Why, if at all, should the Board of Directors, or any manager for that matter, care if other managers are engaged in consensual, inter-office romances or even adulterous affairs?
Can there be any such thing as a consensual affair between a CEO and another senior executive to whom the latter directly or indirectly reports? Could it not always be the case that the junior in the relationship feels that their career is damaged if they refuse overtures from the senior? And what if it's the junior that initiated it?
Apparently, it is not the norm to oust CEO's for this type of behavior. Why did Boeing? Are they trying to set a new standard? Or were they afraid of getting sued?
Why are American corporations having so much trouble reaching a consensus on how to handle problems likes this? Is it a place where a company wants to adopt the best practices of its peers or is this situation where you want to have a policy tailored to your own firm? Can there ever be a "norm" established for matters this personal and sensitive?
How far down the ladder should the policy apply? Should anyone care if an administrative assistant and a mail clerk have an affair, adulterous or not?
Finally, is Stonecipher going to become the posterboy for CEO's sexual indiscretions? When the next CEO is driven out of office for such behavior -and it will happen- will observers say that the CEO got "Stoneciphered"? I, for one, wouldn't be surprised. The analogy to the loathsome practice of stoning adulterers, of people standing in a circle (a cipher!) and hurling rocks at the head of the offending party, is compelling:pink slips and unflattering news stories are the stones; the Board and the media are the holier-than-thou stone throwers; career and reputation, rather than life and limb, are what is lost. Shame, however, is the constant.
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Comments
As a current employee of the Big B with experience in both Commercial and now IDS, it's been a rollercoaster ride. I do think we are coming out of the slump and shaking off the Condit/Stonecipher maladies.
We are back and currently kicking Airbus' collective tush all over the globe. I hope that trend continues and several aerospace industry watchers seem to think it will.
Jim McNerney seems to have been the right choice.
VW
Posted by: Violence Worker | December 18, 2005 1:59 AM