Management lessons through story telling-The Boeing 707

Setting Big Hairy Ambitious Goals

Until the early 1950s, Boeing focused on building huge flying machines for the military. However, Boeing had virtually no presence in the commercial aircraft market. McDonnell Douglas had vastly superior abilities in the smaller, propeller-driven planes that composed the commercial fleet.
In the early 1950s, however, Boeing saw an opportunity to take on McDonnell Douglas by marrying its experience with large aircraft to its understanding of jet engines. Led by Bill Allen, Boeing executives debated the wisdom of moving into the commercial sphere. They concluded that, whereas Boeing could not have been the best in the commercial plane market a decade earlier, the cumulative experience in jets and big planes they had gained from military contracts now made such a dream possible. They also realised that the economics of commercial aircraft would be vastly superior to the military market. They were just flat-out turned on by the whole idea of building a commercial jet.

So, in 1952 Allen and his team made the decision to spend a quarter of the company’s entire net worth to build a prototype jet that could be used for commercial aviation. They built the 707 and launched Boeing in a bid to become the leading commercial aviation company in the world. Three decades later, after producing five of the most successful commercial jets in history (the 707, 727, 737, 747, 757), Boeing stood as the greatest company in the commercial airplane industry, worldwide.

Adapted from “Good to Great” by Jim Collins.