How the HR chief oversees the drive to train leaders at Boeing Co.
The Boeing Co. lost an estimated $100 million a day for 52 days before its machinists’ union ratified an agreement Nov. 1, and it lost a $40 billion refueling tanker contract to Northrop Grumman last spring amid reports of delays to its 787 Dreamliner, all wreaking havoc on the aerospace giant’s stock prices. The ensuing publicity cast bright light on Boeing operations, particular human resources, as outsourcing constituted a sticking point in the labor conflict. Front and center and behind all these events stands Richard “Rick” Stephens.
Since he took on the senior HR job—including supervising its labor negotiators—in 2005, Stephens has sought to address many issues surrounding company operations by beefing up a much-touted Leadership Center in St. Louis as a hub of executive development for the international defense giant with 2007 revenue of
$66.4 billion. “I’m directly involved in setting the strategic direction for the center,” Stephens says, noting that such training “passes on a common language.”
The senior vice president of human resources and administration reports that 7,000 of Boeing’s 15,000 managers now visit the center annually. Most classes are taught by Boeing executives.
Stephens says business ethics forms an integral part of the training: “You can’t engage in leadership development without a conversation on ethics,” he explains. Furthermore, the center “allows us as leaders to know about the next level of people through face-to-face interaction,” ultimately contributing to leader selection.
Stephens enthusiastically lists Boeing’s training components, including:
- Identifying and measuring leadership attributes.
- Formal mentoring.
- Active learning projects. One group studied ways to make Boeing facilities tobacco-free.
- Growth, quality and productivity initiatives in internal service delivery, supply chain management, research and development, and universal application of lean engineering.
Says Boeing Chief Executive Officer W. James McNerney: “Rick is putting into action our strategy to focus leaders not only on executing well, but also on building open and inclusive environments that ensure we draw out the best from our people.”
Despite the U.S. economic downturn, Stephens says Boeing continues to aggressively recruit, hire and train high-tech workers “to support ramp-ups in production to meet our backlog, with record orders for the third year in a row.”
In 2006, Boeing created a strategic talent organization to fill “a pending shortfall in engineering and technology talent.” Its talent managers foster relations with 150 universities, develop curriculum and award scholarships to students. Boeing offers employees $100 million annually for tuition reimbursement and matches employees with technical fellows who serve as mentors.
“The competitiveness of our company is built on innovation,” Stephens says. “It’s a broad challenge to our industry and a long-term concern whether we will have the talent” to continue that tradition of innovation.
Boeing’s size also presents recruitment challenges. For one thing, “Being the biggest kid on the block has its shortcomings” in terms of replacing retiring baby boomers, says Wayne G. Plucker, a San Antonio-based aerospace industry manager for financial research house Frost & Sullivan. Young engineers may rule out jobs at Boeing, he explains, because they think they have greater chances of becoming leaders at smaller organizations. Plucker says Boeing HR professionals face a second challenge in completing cultural integration of staff from merged companies, including Rockwell International Corp.
Stephens, who carries the posture, bearing and diction of a former Marine, actually joined Boeing by way of the 1996 Rockwell merger. Once on board, Stephens took on various responsibilities that sent him to eight locales from Atlanta and Washington, D.C., to Houston and Seattle. He joined the Executive Council after serving as president of the Shared Services Group, which oversees facilities maintenance and the purchase of all non-production goods, and then senior vice president of Internal Services, which also provided administrative support including benefits management. The latter move proved a natural steppingstone to human resources.
Today, his authority extends from supervising the recent and intense debate of Boeing’s labor negotiators, to recruitment, “global corporate citizenship” and leadership development, to employee relations, compensation, benefits and diversity for Boeing’s 164,202-person workforce.
After a busy workweek, the 28-year Boeing veteran flies home most weekends to his family in California.
Leaders in human resources have “one foot in HR and one foot in running the business, and a key role for HR leaders of large corporations is delivering information to all employees about pay, benefits and policies,” he says. Unfortunately, in automating such systems, most HR professionals “lean out,” or reduce the services provided by organizations, Stephens says, adding, “Employees may not need as much high touch for dealing with single transactions. But when you’re talking about life events such as marriage or retirement, these transactions require multiple parts of an organization to come and support the employee.” For that reason, Boeing provides coordinators for such transactions. “High touch is what we want,” he says.
As a leader, Stephens touches the lives of many people. A member of the Pala Band of Mission Indians, Stephens served as its chairman from 1988-89. He sits on the U.S. Secretary of Education’s Commission on the Future of Higher Education and many other government advisory councils in the defense and science industries, and he chairs the Illinois Business Roundtable.
Stephens promotes wellness with personal insight: “All too often, [HR professionals] look at wellness programs as a way of managing the cost of health care,” he says. “We see wellness programs as how can we make people be more healthy and productive at work.” He outlines offerings that range from third-party health risk assessments now completed by 59 percent of Boeing’s employees to personal coaching by health professionals. “About a third of our health care costs are associated with factors that employees control every day. If they are well, they will be able to enjoy life more,” he says. “I have had countless employees come to me and say they are glad that we started this initiative because they have lost weight or lowered their cholesterol. Employees welcome this initiative. I expect over time to see the number of sick days and leaves of absence go down.
“More importantly,” Stephens concludes, “people bring their minds and hearts and enthusiasm to work, and our productivity will go up.”
The author is editor of HR Magazine.