Strategic Choices & Execution

The airline and the pharmaceutical industries are notorious for the need for long term investment choices. I have wondered whether this is really true. Every industry seems to do this in different ways. However, it cannot be denied that these tow industries have a need to make very clear choices very early and enjoy / suffer consequences of such choices.

Boeing vs Airbus

There is a lot of writing about the much touted choices adopted by Airbus and Boeing. In reality, neither of them really made any revolutionary choices, instead choosing to fill out their product portfolio.

Airbus really did not have a large carrier platform (Boeing had their 787 Jumbo), hence the choice to design and build the A380 - how nice to build something bigger and (Airbus thought) better than the Americans while at it.

Boeing meanwhile took its own path and then was forced to change it. In the wake of 9/11, Boeing was able to effect a remarkable change - it rapidly adapted to the new environment (in more ways than one) and rolled out a long range flight platform with advanced lighter materials that allowed better mileage as well as a more comfortable cabin - with greater cabin pressure.

Ostensibly the battle between these two giants are between the hub-and-spoke model and the point-to-point model. One wonders if that is really so simple. The air network of the future will be a jumbled combination of both - what is a mutliple hub model with lots of point-to-point flights?

The jury is still out on which strategy will "win", or if there really is a market for both. The key learning is that good execution and adaptibility wins every time. A lesson right out of the pages of that age-old phenomenon called evolution. Business has a lot to learn from biology here. Boeing clearly was the one to execute faster, and more efficiently, while being flexible enough to quikly react to the market realities that emerged. While Airbus was beset with leadership changes, politicking and compromises that doled out parcels of engineering design by national interests. In short an execution nightmare that has not yet played out completely. Their rollout seems still five years away. While the first 787 Dreamliners rolled out last Sunday, July 15 2007.

So take this lesson to heart all ye business managers. Plan, execute, and listen carefully to market be ready to change your plan and execute again. The rest may not matter as much.