Boeing—A Case Study Example of Enterprise Project Management

from a Learning Organisation Perspective

Conrad C. Szymczak1 and Derek H.T. Walker2

1
Project Manager at Boeing Airplane Service Washington State, USA and Doctor of Project
Management candidate at RMIT University, Melbourne, Australia
2
Professor of Project Management and Director of the Doctor of Project Management program at
RMIT University, Melbourne, Australia.

Abstract
This paper helps explain the impact and potential for companies to better
leverage knowledge and organisational learning from their portfolio of projects.
We offer a model based upon analysis of the development of the Boeing
Company and from change management theory of a way to achieve an
enterprise project management culture through organisational learning.

We provide insight into and a rationale for improvement of project management

practice for organisations that currently possess the ability to intelligently use
knowledge gained from many projects to service its stakeholders. This ability
provides the feedstock for organisational reinvention that can be a survival
mechanism in reacting to changed circumstances as well as providing a
proactive mechanism for developing new markets. In doing so, we draw attention
to both the requisite enterprise knowledge management infrastructure and the
required organisational culture that supports commitment and enthusiasm.

Keywords: Enterprise Project Management; Organisational Learning; Boeing

Company; Knowledge Management.

Introduction
Projects are discrete entities with a defined start and finish point that provide
something new or improved that embrace an organisation’s ability to meet its
operational or strategic responsibilities (Cleland 1999, p4). However, business
reality shows many cases where projects form part of a wider and more
interconnecting and interdependent stream of activities. These are managed as a
cluster/portfolio of projects often sharing resources and linked in a strategic
direction towards a common goal. This concept of clustering or portfolio nature
led to the term program management—defined as managing a group of projects
together for added benefit (Turner 1999, p345). Morris provides an excellent
history of the development of project management from prior to the 1940’s
through to the 1980’s. He proposes a ‘new model’ for the 1990’s that fully
recognised project management as a discipline and the management of
programs of projects that meet not only the immediate paying customer but also
a wider perspective of project stakeholders whose needs are yet to be generally
addressed (Morris 1994, Chapter 8).

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Clearly the discipline of project management has evolved to become more
sophisticated and responsive to demands from a widening set of interest groups.
Recent trends in general management include the emergence of more
enterprising approaches to both project and program management in which the
learning and intellectual assets of organisations are recognised and better
managed. This approach stresses effectiveness over efficiency and creativity,
improvisation and innovation over dogged adherence to established principles.

The principal aim of this paper is to introduce the concept of enterprise project
management (EPM) and review it from a learning organisational perspective in
order that we may better understand how this concept is relevant to project
management practice. First we discuss the wider EPM agenda of inclusiveness
and multiple stakeholders with its opportunity to leverage information and
knowledge of a wider group of stakeholders than the managers of projects. We
define what we mean by EPM and describe how enterprise culture and
supporting information systems and other knowledge assets interrelate to
become an enabler or disabler, and we offer some ideas of how these problems
may be addressed. We then illustrate examples a learning organisation
framework and discuss how this facilitates EPM. We continue this line of
argument with some examples of how an organisational learning approach is
being adopted by the Boeing Company. This provides tangible evidence of
advantages to be gained from this approach and a solid basis for discussion of
Boeing as an exemplar EPM organisation. Finally we conclude with analysis of
the EPM concept from a learning organisation perspective and discuss the
implications that this may have on project management.

Use of a single case for study is a valid approach when the case is special in
some way and is a significant indicator of a special or unique (Yin 1994)
situation. The Boeing Company is a well recognised leader in knowledge
management and organisational learning (Rollo and Clarke 2001, p94). Case
study data was gathered from the Boeing Internet and Intranet, widely distributed
corporate e-mail communications, from unstructured interviews and personal
reflective observations undertaken by one of the authors in his capacity as a
Boeing employee and doctoral candidate studying project management.

Project and Program Management – A Larger Agenda

Demands placed upon project managers and program managers require highly
sophisticated and challenging responses to address the needs of a variety of
stakeholders (Kaplan and Norton 1992; Elkington 1997; Kaplan and Norton
1998). The issue of outcome recognition of broader project performance
measures beyond the usual time, cost, and quality used for monitoring for control
clearly needs to be addressed. Additionally, as the literature on performance
measurement suggests, a balanced scorecard approach is a means to an end
(Kaplan and Norton 1992) that is concerned with strategic alignment of goals with
required resources and other inputs, including knowledge and the development
of a learning organisation, to achieve the articulated goals. We argue that these

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issues can best be addressed using knowledge made available across an
enterprise rather than available only through stand-alone knowledge ‘silos’ that is
typical of many project management arrangements.

One of the perspectives identified in the balanced scorecard is of business

sustainability rather than concentrating only on financial return on investment
measures. Another is a learning/innovation perspective in which business
regenerates itself through organisational re-invention. We argue that both the
sustainability and innovation perspectives are closely linked to the notion of
enterprise.

Webster’s dictionary defines an enterprise as an undertaking, especially one of

great scope, complication or risk. This provides a more inclusive concept to draw
project team stakeholders into consideration of how project performance should
be appreciated to encourage project stakeholders to enable the successful
development of project organisations beyond the success of individual projects.
The term enterprise in EPM infers recognition of leveraging knowledge assets to
achieve competitive advantage beyond any single project organisation or small
cluster of projects. We also argue that EPM in a large and complex organisation
facilitates organisational reinvention and change in which specific projects and
programs of projects provide precious opportunities to reassess the enterprise’s
operational scope to capitalise upon the challenging information-rich, knowledge-
based environment of the 21st Century. EMP is aimed at efficiently accomplishing
more in less time. It does so with requirements that constantly cause imbalance
in the organisation while the nature of project management is also undergoing
change. Conversion of information to knowledge with ensuing exchange of tacit
and explicit knowledge must be leveraged across project management
organisations to effectively achieve viability and survivability in a dynamic and
competitive environment. Managing an enterprise as sets of interrelated projects
can meet this challenge. Knowledge management (KM) in EPM offers an
alternative to traditional enterprise management as it provides a learning
organisation approach that acknowledges and better responds to wider
stakeholder constituencies fundamentally affected by project outcomes.

The central concept of Enterprise Project Management (EPM) requires a change

in world view from understanding the enterprise as a hierarchical structure of
firstly, major business units (MBUs) and then programs (containing projects), to
that of the enterprise being primarily a portfolio of projects generating diverse
potential value. Value stems from transferable and viable intangible project
outcomes that may transform organizations for broader organisational learning.
This contrasts with meeting restrictive commercial MBU performance plans. The
concept of enterprise reveals a potential for organisational reinvention and
evolution rather than maintaining a status quo. This paradigm shift requires an
enterprise version of "metanoia", grasping a fundamental meaning beyond the
mind, (Senge 1990, p13).

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By their nature, projects expend assets, and so tension (the state of anxiety that
exists when a gap appear between the vision and reality) can arise between
projects and programs when they compete for a finite quantity of resources. This
tension should be a creative one but often it is not. As Peter Senge puts it, “If we
fail to distinguish emotional tension from creative tension, we predispose
ourselves to lowering our vision” (Senge 1990, p151). Managing the competing
appetites of project/program/enterprise becomes an important responsibility. In a
healthy enterprise, projects are created to promote growth. In a sick enterprise,
projects may be initiated to stop the bleeding of resources or produce quick fixes
(that eventually fail). While all organisations are motivated to achieve profitability
and business continuity, too many times, the projects they create become
associated with disasters and risk mitigation rather than growth.

In this paper we discuss EPM as an important concept from a learning

organisation perspective. In the next section we describe EPM in more detail. We
then continue to frame the discussion in a KM context as it currently applies with
the Boeing Company as a case study using examples of organisational learning.
From this analysis we develop a model of EPM from a learning organisation
perspective and then discuss its implications on project management practice.

An Enabling Commitment Culture for Enterprise Project Management

The concept of EPM involves a portfolio of projects in a program using common
support systems such as enterprise knowledge and information assets,
information and communication technology (ICT) systems, procedures and
processes to minimise wasted management effort and leverage knowledge to
enable smart responses to common problems and challenges. EPM requires a
high level of integration of ICT systems, management procedures and compatible
work cultures across projects so that mutual understanding of project team
members and as many stakeholders as possible is achieved (Dinsmoore 1999).
This can be seen by recent calls for a relationship based procurement strategy
that is supported by an effective ICT infrastructure (Duyshart et al. 2002). Thus,
the inclusion of the term enterprise in tandem with the term project management
recognises the diverse range of stakeholders that affect and are affected by
project outcomes.

The presence of foibles encountered by an enterprise when essentially off-the-

shelf EPM ICT systems are activated without sufficient enterprise culture change,
is an issue not often discussed in the literature. There are two traps an enterprise
may fall into when it decides to use off-the-shelf EPM ICT support systems
without corresponding enterprise cultural change. First, an enterprise may expect
off-the-shelf ICT systems to integrate legacy systems and existing processes and
procedures without changes to software code. Second, major modifications to
off-the-shelf software code cause problems with an EPM ICT system’s reliability,
benefits, and features. An EPM ICT system’s basis for success is its effective
use in enterprises that demonstrates its assimilation of an off-the-shelf system
after, rather than before, appropriate enterprise culture change is achieved.

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 Results gap

New Business
DELA
Y Results Credibility
New Business
Practices Personal R3
Results
Networking Trust gap
DELAY & Diffusion
R1
Enthusiasm &
Learning Willingness
Capabilities People
To Commit
Involved
R2
Y
LA
DE
Investment Time, Reflection &
In Change Commitment gaps
Help gap Initiatives

Figure 1 - Restraining Forces Acting Upon the Reinforcing Cycles Generating

Enthusiasm and Willingness to Commit—Adapted from (Senge et al. 1999, p105)

Figure 1 illustrates three reinforcing cycles of cultural change that produce

positive outcomes. It is beyond the scope of this paper to discuss these in detail
however a brief explanation is necessary. All three cycles begin with enthusiasm
and commitment; this is assumed to be a pre-condition for change. Cycle R1 and
R2 lead to an investment in change initiatives by both the organisation and
individuals—primarily the investment is in education and training including
mentoring and both official and unofficial support. Cycle R1 then moves after a
delay in absorbing the investment into an increase in learning capabilities. These
generally lead to personal results such as expansion of competencies, finding
things easier to do and other outcomes that build confidence and intrinsic
motivation including greater feeling of self-worth. Reward systems may provide
concrete benefits. These build enthusiasm and commitment because the
initiative is proved to be of value. Cycle R2 leads from the change investment to
greater involvement with people, which leads to networking and diffusion of the
change initiative. This positive socialisation of tacit knowledge helps to make
knowledge explicit (Nonaka and Takeuchi 1995; Nonaka et al. 2001) and this
further reinforces a sense of worth and value for knowledge workers. This builds
enthusiasm and commitment. Cycle R3 builds upon the learning capabilities
because after some time delay, while the benefit of the changes are realised and
absorbed into the workplace culture, it is translated into changed work practices.
After a further delay, this drives improved business performance. Productivity
boosts and other positive outcomes drive organisational confidence in the
change initiative. This in turn builds upon enthusiasm and commitment of team
members. If the cycle is not subject to atrophy then success will build upon
success. This would be an ideal condition that is rarely fully experienced because

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of restraining cycles that adversely impact upon this virtuous cycle. Figure 1 also
indicates restraining cycles that diminish the positive outcomes and sometimes
slows these to a standstill. Four gaps that generate traps for enthusiasm and
commitment are identified. These gaps all drive a countervailing force that
inhibits successful change initiatives. Table 1 highlights the importance that
change management and working culture has upon the potential success of
EPM.

Table 1 – Impact of Change Initiative Traps on EPM Functioning

Figure 1 Traps Impact Upon Change Initiatives
TRUST Relates to a culture of sharing
knowledge, information and
resources. When this trust is
breached or compromised the
restraining effects present
themselves.
HELP The help gap stems from lack of
training and development support
or from provision of ‘help’ in ways
or at times poorly thought
through.
RESULTS The results gap is a function of
either expected results not being
possible to be achieved or of
unrealistic expectations
negatively influencing
perceptions of results.
TIME, The time trap results in lack of
REFLECTION time being available to reflect,
& think and absorb knowledge and
COMMITMENT ideas. This leads to frustration
then lack of commitment.
Impact Upon Projects for Enterprise
Application
Potentially inhibits or enhances cross
fertilisation of ideas, cross levelling of
knowledge assets, or enabling KM to
migrate across the enterprise (Nonaka
and Takeuchi 1995; Stewart 2000; von
Krough et al. 2000).
Help may be impaired through the need to
support diverse new and legacy system
support beyond the resources of an
enterprise. It makes sense to standardise
systems to provide common platforms that
can be more effectively supported.
Confusion and unrealistic expectations
may arise through a variety of systems
with legacy of promises, commitments
and expectations of deliverables. A more
common enterprise approach can at least
standardise expectations and
performance measures and criteria.
An enterprise approach has a better
chance to focus energy and acceptance
on a common operational system platform
than on separate project systems. The
key to successfully implementing complex
systems is to have simultaneous
centralised and decentralised systems so
that energy in customising can be flexibly
focused within the constraints of
knowledge gained from a centralised set
of guidelines (Weick 2001, p340).

The interest of commonality of system architecture would indicate that creation of

custom EPM ICT systems might be good for preserving legacy systems and
processes. Would it be wise for an enterprise to preserve them? Probably not,
the enterprise needs to transform its organisation from a series of self-contained
and often conflicting systems to an EPM system. Legacy systems and processes
are part of the old enterprise culture that would probably contain conflicting and
non-aligned systems. Successful transfer of data and databases to EPM systems
while maintaining business continuity is a critical issue. Foibles encountered by

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an enterprise in developing and commissioning EPM ICT systems are
encountered when the enterprise has not properly explored an EPM system and
the associated enterprise culture necessary to make the system successful.

Sound business process re-engineering and systems design principles suggest

that when tackling process improvement it is best to think through preferred and
practical approaches to the core process being designed rather than opting for
band-aid solutions or quick fixes (Hammer and Champy 1983; Hammer 1996;
Mohamed and Tucker 1996). EPM is an operating principle that is more than
simply a creed. A detailed business continuity/risk assessment is required before
making any decisions to act on EPM ICT development. This includes an
assessment of dealing with risk associated with avoiding loss in terms of money,
resources, time etc., as well as considering risks associated with taking
advantage of new opportunities opened up through dealing with programs of
projects in a coherent and integrated manner (Dinsmoore 1999).

EPM transition process requires integration of key learning organisation concepts

of capitalising upon such behaviours as reflecting and learning from past
experience, systems thinking, and knowledge sharing (Senge 1990). Enterprise
cultural change is pivotal to successful integration of ICT EPM support systems–
enterprises expecting off-the-shelf applications to work without instituting cultural
changes, as indicated in Figure 1, should beware. Conversely, enterprises
diluting off-the-shelf technology by making excessive modifications to fit the
existing cultural model can also present problems of coherent integrity between
technology and people issues. A corporate-centred culture offers enterprise
challenges of being relevant at the project level when attempts are made to align
the way in which a program of related projects are managed. We argue that a
likely response is that enterprises will experience a metamorphosis towards a
linked project-program culture as a prerequisite of implementation of any EPM
system. This is a problem for organisations in attempting to re-frame or reinvent
themselves to meet the challenges of developing new ways of doing business
and responding to new opportunities for productive improvement (Hamel and
Prahalad 1994; Hames and Callanan 1997; Handy 2001).

Many EPM software system platforms are available, but the purest sense of EPM
is effectively and efficiently possible in small organisations with ‘pencil and
paper’. The mindset and system of systems together with a coherent focus on
the enterprise vision and its impact upon the nature of the project (change
management process) are the most important considerations rather than concern
for a set of integrated databases being present. The key is in the people and their
ability to learn and grow within the enterprise and the enterprise’s ability to adapt
and learn from the growth in learning of its people.

In a non-learning organisational style, a silo approach may be observed where

each individual project is managed without any significant learning being derived
from the experience of others in the operating cluster or program. This may occur

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even though the customer or supply chain could be common for the program.
Valuable customer or supply-chain specific knowledge could be lost and
reinvented for each project in the program. This represents a significant example
of wasted energy and management effort. In an EPM approach, the integration of
support systems and knowledge assets allows lessons learned and valuable
knowledge to be shared, re-cycled, enhanced and built upon. This creates
greater value and optimises management energy expended.

Developing an EPM Model

Any technology solution will fail if it doesn't recognise the importance of human
connections. David Snowden, from the Institute for Knowledge Management,
cited in (Warner 2001) provides three principles for effective knowledge diffusion:
One, knowledge can only be volunteered; it can't be conscripted. Two, people
always know more than they can tell and can tell more than they can write. And
three, people only know what they know when they need to know it.

Thirst for Reward Intellectual ICT and

knowledge systems safety administrative
Time Intellectual systems support
support
Workplace
support Motivation
Leadership
and strategic
delivery support
Thinking Enthusiasm &
+ reflecting willingness to commit

Enterprise knowledge infrastructure

support systems
(including culture of sharing)

Absorb, Test,
Reflect, Diffuse
- Feedback
Project 1 Project 2 Project ‘n’

Knowledge Knowledge Knowledge

Gained: Gained: Gained:
• Technical • Technical • Technical
• System • System • System
• Customer • Customer • Customer
• Cultural • Cultural • Cultural

Figure 2 – EPM Learning Organisation Approach

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Figure 2 illustrates the EPM learning organisation approach where knowledge is
actively sought on identifying technical solutions to problems faced, how systems
and methodologies performed, what was learned from customers (and supply
chain partners) as well as how the project culture evolved and functioned. The
enterprise knowledge infrastructure includes information and communication
technologies and administrative support that affect motivation as well being a
part of the support systems and the leadership and strategic delivery support.
Motivation for individuals, teams and other groups to think and reflect as well as
drive enthusiasm and commitment, forms part of the enterprise knowledge
support infrastructure. The influences upon motivation and its impact upon
enthusiasm and willingness to commit energy and knowledge shown in this
Figure 2 links to the forces acting upon enthusiasm and commitment described in
Figure 1. All this knowledge is fed into an enterprise-wide infrastructure support
facility. The enterprise governance system then absorbs, tests and reflects upon
this knowledge and provides feedback to projects to enable those engaged in
these projects to work ‘smarter’ by learning from the enterprise how to do more
with less. This approach demands an effective culture of knowledge sharing.

The literature shows convincingly that knowledge is a pivotal asset to be

deployed in being creative, innovative and pursuing a qualitative competitive
advantage (Kanter 1995; Leonard-Barton 1995; Kim and Mauborgne 1999;
Nonaka et al. 2001). Success of any EPM system is dependent upon KM in a
learning organisation—any successful EPM system is by nature a KM system.
Managing knowledge isn't a fad – it's a critical business challenge and it's as
much about creating personal relationships as it is about installing elegant
applications (Warner 2001). The literature suggests a maximum of 1/3rd of a KM
strategy should be devoted to technology with the remaining 2/3 rd being people
related (Davenport and Prusak 2000; Stewart 2000).

Examples of EPM from Boeing’s Learning Organisation Approach

Questions relating to KM in an EPM learning organisation include; How do
organisations respond to the challenges of today from an EPM roles and
responsibility perspective? How do and can they prepare for the future? How can
the organisation consistently accomplish their chartered goals, across their
enterprise, in line with their vision?

Organisations must know the essence of learning in relation to their firm and their
business activities—what worked, what works, what might work, and what didn’t
work. In looking backward to look forward, the organisation is learning and
morphing to resemble its future vision of itself. An organisation that leverages its
knowledge tends to acquire competitive advantage (Argyris and Schön 1978;
Pedler et al. 1996). Leverage may come in the form of ‘pay for knowledge’,
product /service improvement and enhancement, or in the manner of conducting
an organisation’s enterprise. It may not be overly obvious how this works at first
—a personal example from Boeing is provided as a useful illustration.

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The Boeing Company experience supports the indication in Figure 2 that well-
trained, educated, and motivated employees along with an appropriate EPM
platform provide the essential elements of EPM success. We argue that the
ability of an organisation to educate itself and learn as an entity is paramount to
any enterprise ’s ability to compete and grow. The ability of enterprise to invest in
its most important asset is a recipe for future success. In 2001, for example,
1200 Boeing employees earned their degrees from accredited institutions—
Boeing supports this specific type of investment in organisational learning
through reimbursement of tuition and short course fees as well as learning
materials. A total of US $85million was spent for all college participants (30,000
in total) with spending of an average of US$2,800 per participant.

Boeing chairman and chief executive officer, Phil Condit in a June 2001 speech
to the Business-Higher Education Forum stated, “Last year about 30,000 people
used our Learning Together Program, 2,000 people earned degrees and 1,000
people received master's degrees. We paid out 173,550 stock units to graduates.
We reimbursed 1,200 accredited schools about $80 million. We paid $30 million
of that total to five schools where our students chose to learn…the University of
Phoenix, South Coast College, Aviation Electronic Schools of America, City
University and University of Southern California.”

Condit goes further, stating “Today people can expect several dramatic career
changes during a lifetime. Companies are changing too. Boeing is one example.
We began a very fundamental transformation about five years ago because the
most dangerous thing for a company to do is stand still. Our transformation was
designed to prepare the company for the 21st century. It began with the
acquisition of Rockwell Aerospace and took major form with the merger with
McDonnell Douglas, which set the path for a company with greater strength and
greater breadth. We followed that with the acquisition of others, including the
Preston Group, Jeppesen, Continental Graphics, Hughes Space and
Communications, and Hawker de Havilland in Australia. The result: a company
with enormous intellectual capital and capability, and opportunity for our 198,000
employees.” This illustrates how Boeing is actively reinventing itself through its
learning organisation capacity and its EPM foundations.

Enterprise risk management is one important process whereby an organisation

optimises its growth through the management of risks at the enterprise rather
than individual project level (Dinsmoore 1999). Significant business opportunities
often do not reside with the project itself but rather with what the project was
suppose to offer the enterprise. In the case of large corporations, there may be
several layers of planned expenditures rolling up to the enterprise level.

At the program/enterprise level, risk management broadens to encompass more

than concerns the project and looks to compare feasibility of each project, how
that project relates to the enterprise, and how each project relates to other
projects. Do redundancies exist? Should projects be rescheduled in relation to

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each other? A schedule that is very reasonable for a project may not be so when
other projects and programs are considered.

Learning from the customer has been widely cited in the literature as an
important characteristic of a learning organisation (Prahlad and Ramaswamy
2000). Recently one of the authors was treated to a customer’s view of the
utilisation of knowledge with respect to the airline industry. Boeing provides
Service Bulletins to customers to allow them to make modifications to their
aircraft. Some bulletins outline physical retrofits while others are ‘pay for
knowledge’ services for additional fees such as providing advice on changing the
allowable weight an aircraft is allowed to operate at. This provides one example
of how knowledge is leveraged across Boeing. Substantial revenue is lost for an
airline operator when they pay landing fees for weights over their normal
operations, for example when a passenger aircraft that could but does not, carry
additional cargo in its holds. Conversely, an operator that has just converted its
aircraft from passenger to cargo service is loosing revenue when it operates at
‘passenger only’ weights. Boeing charges for these types of ‘knowledge’ service
bulletins at a ‘value pricing’ structure—it charges based upon the weight increase
and the anticipated revenue life of the aircraft. Airbus, on the other hand, does
not charge for some of these types of service bulletins. This does not mean that
Airbus or Boeing has the advantage; it just means that both firms view
knowledge differently and from the customer’s viewpoint, the cost of an aircraft
cannot be viewed as the outlay of funds to acquire, but rather the cost of ‘womb
to tomb’ of an air asset. This example illustrates a whole-of-life value assessment
consistent with a learning organisation approach to EPM.

It is useful to appreciate one of the most critical factors of operating an airline

from the customer perspective, the cost of maintaining aircraft. The ability of an
organisation to change in response to stimuli (learning from knowledge) can reap
substantial profits—or at least permit survival—again demonstrates a learning
organisation approach to EPM. The shift from analogue to digital technology in
order to leverage knowledge to provide better project/service outcomes is
another example of this learning organisation approach to EPM. (Wastnage
2001) states “In the early 1970s Pan American Airways had teams of 40 ready to
complete line maintenance on its fleet of Boeing 747-100s. Today, four people
can complete the same level of checks on Airbus A340-600s. Digital technology
enabled aircraft maintenance to achieve phenomenal gains in aircraft turn
around time and cost reduction. Meanwhile, Boeing Next generation 737s
requires 30% less maintenance than their Classic brothers.” These gains are
directly attributable to data collection of aircraft performance and exchange of
information between manufacturers, maintenance facilities, and vendors.
Advances in data collection on aircraft allow manufacturers within weeks of an
incident to pinpoint areas for additional checks on worldwide fleets. This network
of systems and the ability to learn and apply knowledge is demonstrated in
another example from Norway’s Braathens. They operate Boeing 737s in harsher
climes than the Seattle based engineers envisioned. Large amounts of abrasives

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used to keep runways operational caused considerable damage to their 737s’
undercarriages. The Boeing solution to this condition was later used by Boeing to
leverage a purchase of 737s by Alaska Airlines.

The most obvious application of enterprise learning and knowledge application is

maintainability feedback from airlines. (Wastnage 2001) cites another example:
“…Bombardier had consistent feedback from its early CRJ100 customers on the
positioning of access points to certain junction boxes…. servicing required hours
of extra manpower to remove…. the company ‘learned vital lessons’ and
changed the design on later aircraft…” Even the simpler aspects of learning and
applied knowledge to aircraft maintenance can reap rewards. For example
Singapore Airlines is experimenting with a 3M-polymer film in lieu of paint that
takes one-third the time to apply and reduces drag 0.5%, enough to save
$300,000 for its long-haul fleet over the five-year life of a coat of paint.

The key factor in any KM system is people (Davenport et al. 1998; Davenport
and Prusak 2000; Davenport 2001). Any system that brings people together in
harmony to share and exchange ideas and to network to find information and
properly utilise it will create value for that individual and for his organisation.
When that system, or community, is hosted or directed by interrelated and
relational databases and information systems, they act as pointers to connect the
right people rather than as actual ways of sharing specific information and ideas.

Discussion of Boeing as an Exemplar EPM Learning Organisation

Operating revenues for the Boeing Company in 2001 were US $58.2 billion with
a workforce of 194,400. Over half of these assets are dedicated to the
commercial aircraft division. The merger of McDonnell-Douglas and Boeing and
the new Boeing Company’s expansion into new business opportunities such as
air traffic control and sea launched satellites present special challenges to
Boeing in its ability to reshape its image from a maker of jet liners to an
integrated provider of information, defence, and transportation solutions.

This morphing and organisational reinvention requires a sound learning

organisational basis and high degree of flexibility and improvisation—“Life in
organisations is filled with potential inventions that get ambushed when people
slide into old clichés” (Weick 2001, p302). Boeing became nimble and adept at
reinventing itself by taking knowledge from existing core competency areas and
applying it to new ventures. Stretching beyond core competencies is unlikely
without risk, especially when an enterprise enters into an area where it has little
or no knowledge and experience. One method of limiting risk, used by Boeing, is
to purchase other enterprises that possess knowledge and experience needed to
absorb another competency. An alternative is to gain competency through buying
knowledge if you cannot buy an enterprise or take it over through mergers and
acquisitions. In either case the key to successful innovation, particularly across
the organisation/enterprise, is to ensure that knowledge is cross-levelled or
leveraged (von Krough et al. 2000). One important aim of any enterprise is to

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promote knowledge and experience cross-fertilisation and to morph to this state
of project management. A learning organisation approach to EPM sustains this.

Though a huge consumer of knowledge from internal and external sources,

Boeing realises that much of that knowledge has value to other enterprises. This
offers Boeing an opportunity to leverage knowledge without giving competitive
advantage to its’ competitors. Knowledge can be viewed like a coin. It has value
and it has two sides—one side competitive advantage, competitor advantage on
the other. Heads is competitive advantage to your enterprise; tails is competitive
advantage to your competitor. From being a consumer to purveyor of knowledge,
Boeing discovered that knowledge is a tangible asset with a life of its own. The
traditional Boeing corporate culture was one of ‘stove pipe’ reporting and
knowledge hoarding in separated and segregated ‘silos’ with little sharing or
leakage of knowledge from one silo/stove pipe to another. With knowledge
sharing and enterprise /corporate culture transiting to an EPM style management
comes risk, but also great reward. The ability of enterprises to work to synergise
their efforts is of great importance to a viable national and world economy. Trust,
risk, coalition, and competition will be key words in the 21 st century (Prusak and
Cohen 2001). Boeing’s corporate web and internal corporate communications
indicates that these are the values that it embraces.

Another specific category of knowledge is contained in patents (Sveiby 1997).

This licensable commodity is another area Boeing is making inroads to leverage
its knowledge. Boeing created an internal web site to address IP. Boeing’s
expressed goals are to assist inventors, assist with legal consul, and create a
new source of revenue for the corporation. The Boeing Intellectual Property
Strategy is one that emanates from top management. All divisions are required to
buy into the concepts of KM. Thus EPM must be supported by and fully
coordinated with information technology and both upper and lower management
human resources.

While KM is a mandatory central directive, the implementation path is a locally

decided upon— choice by individual and functional community. This accords with
the recommended use of tightly coupled systems to provide vision and direction
as well as a cross-enterprise support platform together with loosely coupled
systems that provide for effective mutual adjustment in responding to complexity,
uncertainty and in promoting flexibility (Weick 2001, p340). Each business unit in
Boeing has the freedom to decide what works best for them while adhering to its
principles of being a learning organisation. KM initiatives do not work well when
rigidly mandated (Davenport and Prusak 2000). The Boeing experience indicates
that these must be coordinated and facilitated to allow them to flourish. Boeing IP
strives to enhance competitive edge by: changing company attitudes toward IP;
improving incentive programs for employees who contribute to IP; increasing
internal and external stakeholder awareness of IP and Boeing Patent Portfolio;
and improving marketing and sales of IP products. Boeing takes one of two
approaches when it considers a KM system (Trott 2000). It looks for previous

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solutions—a codification strategy. The other Boeing approach is to look to
connect people. The truly successful organisation is one that can do both as
indicated in Table 2.

Table 2 - Boeing KM Strategy

Strategy Codification Focus Personalisation Focus
Competitive Re-use Customisation
 Business emphasises assemble-to-  Business emphasises
order product or service. highly customised service
 Provide high-quality, reliable, and fast offerings or product
implementation by reusing codified innovation.
knowledge.  Provide creative and
rigorous solutions by
channelling individual
expertise
Economic Reuse Economics Expert Economics
 Invest once in a knowledge asset; reuse  Change high fees for
it many times. highly customised
 Use large teams with a high ratio of solutions to unique
junior to senior people. problems.
 Focus on generating large overall  Use small teams with a low
revenues. ratio of junior to senior
people.
 Focus on generating high
profit margins.
Knowledge People-to-Documents Person-to-Person
Management  Develop an electronic document system  Develop networks for
that codifies, stores, disseminates, and linking people so that tacit
allows reuse of knowledge. knowledge can be shared.
Information Repositories Networks
Technology  Invest heavily in IT to connect people  Invest moderately in IT to
with reusable codified knowledge facilitate conversations and
assets. the exchange of tacit
knowledge.
Human Re-users Inventors
Resources  Hire people suited to reusing knowledge  Hire problem solvers and
and implementing solutions. those who can tolerate
 Train people in groups and through ambiguity.
CBT.  Train people through one-
 Reward and people for using and on-one mentoring.
contributing to document databases.  Reward people for directly
sharing knowledge with
others.

Table 2 illustrates the extent to which Boeing observes and addresses drivers
and barriers for enthusiasm and commitment to change (illustrated in Figure 1)
using inputs (illustrated in Figure 2) that support the enterprise knowledge
infrastructure. One of the basic tenets Boeing adopts is to create knowledge
objects independent of the person and reusable it for multitude purposes. These
building blocks can then be assembled and reassembled many times in different
locations and for differing purposes; flexibility and reusability are the keys.

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Boeing encourages the creation of knowledge and its reuse. It attempts to link
reward systems such as pay to the level of quality and contribution and use in the
enterprise. Boeing has a multitude of recognition programs to reward workers on
an immediate and periodic basis for tangible contributions to the base of
knowledge. This program varies from a simple thank you card and gift that any
employee can give to another employee without management approval up to
stock awards and cash payment.

Communication is key to any organisational learning enterprise. Boeing

communicates between organisations and individuals through a variety of
person-to-person and electronic means. Boeing also makes extensive use of
meetings as a means of transferring tacit knowledge in a rich face-to-face
environment. This has been argued as providing subtle cues and to impart
deeper meaning and understanding (Weick 2001, p337), however it does attempt
to keep ‘death by meeting’ to a minimum. It also heavily relies on internal and
external organisational web sites to communicate with workers, vendors, and
customers. Email is used, as are virtual meetings, conference calls, and video
conferencing. In most cases, Boeing opts to make information and knowledge
available in easily ferreted out locations in lieu of sending information out to
everyone – a ‘knowledge on demand’ system – any time, any place. This
precludes information overload from unsolicited sources. Boeing’s KM strategy
(see Table 2) illustrates both a customer and personalisation focus to encourage
and support the individual to respond to customer needs and opportunities.

Another key element of KM is the ability to share knowledge with those you want
to and refrain from sharing with others. Boeing, along with providing transfusions
of knowledge, is wary of ‘knowledge haemorrhage’. It has layers of security and
procedures to safeguard information and knowledge. The following provides an
excerpt of Boeing Company Procedure PRO-1003, “Intellectual Property”, April
12, 1999 “We all have responsibility for taking steps to preserve the
confidentiality of Boeing intellectual property, which includes trade secrets and
proprietary information, inventions, patents, copyrights, trademarks, etc. In
addition, we have equal responsibility to protect the intellectual property of
others, including supplier proprietary information.”

Mike Bair, Boeing Commercial Aviation Services Chief, in his 2001 year-end
summary to employees addressed several key accomplishments of his
organisation. Of particular note are his comments with regard to KM: “Our
Customer Support organization continues to set the world’s standard for service.
Aside from troubleshooting tens of thousands of customer calls and being with
airlines on-site 24/7 in airports across the globe, Customer Support has really
started to make terrific contributions to airlines’ abilities to do things more
efficiently. For example, more than 70 customers are now using the Portable
Maintenance Aid. PMA now is available with Fokker data, too, which means we
are taking steps to support mixed fleets rather than only Boeing airplanes. We
launched the Enterprise-One suite of maintenance solutions this year. In Spares,
we supported our customers from 11 centres throughout the year, opened a

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Global Airline Inventory Network office at Japan Airlines, and entered into a
GAIN agreement with KLM. In Information Services we are exploring new
frontiers in using the data-rich environment flowing on and off the airplanes to
make our customers’ operations more efficient. This year MyBoeingFleet.com,
with content and functions expanding all the time, celebrated its first anniversary.
It receives more than 2 million hits a month.”

Conclusions and Implications for The Future

We have attempted to explain the concept of EPM in terms of a program
management approach in which organisational learning is a core element. We
described how project and program management may differ in emphasis on
knowledge sharing and how a wider range of stakeholders are now demanding a
greater range of value outcomes from projects. This requires greater knowledge
about not only technical solutions, but also systemic knowledge—how the supply
chain interacts and how the various stakeholders can best convey their wants,
needs and aspirations as well as their knowledge contribution towards delivering
projects. Additionally, cultural knowledge on how team and individuals interact
also needs to be shared across the enterprise. We presented a model in Figure 1
that helps explain how enthusiasm and commitment can be developed through a
supportive organisational culture. In Figure 2 we extend this idea to present a
model of how a project-based organisation can use an organisational learning
approach to create an enterprise ethos.

We have presented evidence from the Boeing Company as illustrations of this

approach and cited several examples of where knowledge from projects had
been transferred to the enterprise knowledge infrastructure. We indicated where
the Boeing Company has demonstrated a capacity to reinvent itself and has
morphed itself from being a product supplier (aerospace technologies) through to
service provider (maintenance and support) through to knowledge broker
(intellectual property development facilitator).

While the limited scope of this paper does not permit us to expand further by
providing other examples and analysis of the strategic trajectory of this case
study organisation, we have been able to indicate how the EPM organisation
may develop. The main implication that we draw to the reader’s attention relates
to organisations that wish to remain viable, and seek to do so through reinventing
themselves. We argue that they can do so by improving the outcomes from their
projects and adoption of an organisational learning approach to EPM. The key to
corporate longevity and remaining prosperous depends upon project
management oriented organisations fully leveraging knowledge outcomes from
their projects across the enterprise and doing so in a way that recognises the
contribution that the full range of project stakeholders can offer. As the Boeing
case suggests, both suppliers and competitors can become future
clients/customers and with their needs highly targeted, may also become an
important source of future knowledge and prosperity. Understanding the EPM

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learning organisation approach, as illustrated in Figure 2, provides a useful
starting point on the journey towards effective business sustainability.

References

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