Excellent decisions don't often happen by accident. In this excerpt, the authors highlight the elements—and the masters—of effective action
When Jim McNerney became CEO of Boeing (BA ) in 2005, the company was in crisis. He was Boeing's third chief executive in three years. Two years earlier, Phil Condit had been forced to resign the job as a result of various ethical violations alleged to have taken place under his watch. Next, a widely respected former Boeing president, Harry Stonecipher, had been called back to the CEO post by the corporation's board, only to be edged out himself after revelations of a liaison with a female Boeing executive. The improper behavior that surrounded Condit's ouster, purportedly including the acquisition of thousands of pages of proprietary documents from rival Lockheed Martin (LMT ) that were used to help Boeing win contract work from the government, had prompted a Justice Dept. investigation. Boeing's senior ranks were demoralized, and employees throughout the organization were frustrated and embarrassed.
McNerney had watched events unfold from his seat on the company's board of directors. He was acutely aware that the crisis would represent a watershed in his leadership and afford him a chance to reenergize the corporation. In response, he agreed to a $615 million settlement with Justice. It was the largest financial penalty ever imposed on a defense contractor for wrongdoing. But the settlement allowed the company to avoid criminal charges or any admission of wrongdoing.
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