Innovation Challenges of the Boeing 787

In the year 2003, the American aircraft manufacturer Boeing set out to increase value for their customers by developing a new, more innovative aircraft called the 787. The goal was to not only improve end customer experience and comfort but to also increase range and reduce costs-per-seat mile.  The unique value proposition of the 787 was perfectly in line with customer demands and resulted in the largest pre order in aviation history. This was a clear sign that the front end of the innovation process at Boeing, which is the idea generation and incubation, was well structured and developed the right ideas for areas of improvement.
Despite the promising ideas, the end result of the 787 development can be considered a failure that was both years behind schedule as well as billions of dollars over budget. This paper will highlight the problems that Boeing encountered and how innovation concepts can help us analyze these.

The first overall problem that was committed by Boeing was the imbalance between their business model and their handling of innovation risk. With numerous, new components such as the lithium batteries or composite materials they were including multiple untested more risky innovations. Boeing did not realize that “the interactions among these novel technologies, introduced simultaneously, also exponentially increased the risk of innovation.” This large innovation risk should have resulted in Boeing taking a much larger role in the development and manufacturing of the aircraft. But rather than keeping control, Boeing delegated responsibility and tasks to sub- contractors. This false handling of innovation risk turned out to be damaging when ill-conceived batteries caught fire on multiple occasions and even resulted in the entire fleet having to be grounded.
Furthermore, in order to include numerous innovations and be cost effective, they at the same time changed their business model by largely increasing the proportion of outsourcing. Not only that, but they also changed their supply chain to a new tiered structure. The implementation of a new business model and simultaneous leaps in technologies goes entirely against the concept of “a better business model beats a better technology”. Boeing should have passed on some of the innovations if that meant having to go against their proven process of only working with trusted suppliers and constantly having control over the process.

Another problem that was encountered was that of the conduct surrounding the modularity of the aircraft. Boeing successfully broke down the construction of the aircraft into endless sub tasks. The goal was to merely assemble the numerous externally constructed parts. What Boeing seemed to have missed entirely thought was that “successful modularization also depends critically on prior knowledge of specific interdependencies and how to address them via hierarchical design rules”. Boeing lacked knowledge of some of the delegated tasks as well as having to little control of the design and engineering. They did not provide clear design goals or on site assistance with expertise which would have meant that they could have detected flaws, like those reveled in the lithium batteries, earlier.