When Jim McNerney took the helm at Boeing Co. (IW 500/16) in July 2005, the aerospace giant was reeling. Rival Airbus SAS had seized the throne as the world's top commercial-airplane manufacturer, and Boeing's reputation had taken a nosedive after its two previous CEOs had resigned in disgrace.
Boeing was in dire need of solid, stable leadership -- and the company found it in McNerney, a 19-year veteran of General Electric Co. (IW 500/5) who had been leading 3M Co. (IW 500/44) since 2001.
"He brought ethics and integrity, and made it a source of competitive advantage for Boeing," asserts Peter Cohan, author of "You Can't Order Change: Lessons From Jim McNerney's Turnaround at Boeing."
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Although Cohan characterizes McNerney's initial meeting with top Boeing executives as a "come-to-Jesus" moment, he emphasizes that McNerney's strength is "his ability to instill a set of values into an organization and to create a culture that gets people aligned."
"He did the same thing at 3M in terms of creating a sense of values that were shared by the organization, and the interesting thing is that he did not just impose them from on high," Cohan says. "Instead, he would spend a fairly long period of time getting people in the organization to listen to his ideas, and he would listen to their ideas, and they would harmonize on a set of values" that served as McNerney's compass.
McNerney's impact, however, extends far beyond ethics and values. At 3M, McNerney leveraged cost cutting, continuous improvement and strategic repositioning to improve profit margins and guide the company to then-record highs in earnings and sales. In 2004, McNerney's last full year at 3M, sales topped $20 billion for the first time in company history.
It's been a similar story at Boeing, which reported a 21% increase in full-year 2011 net income on record revenue of $68.7 billion. The company ended 2011 with a record order backlog of $356 billion.
In late 2012, Boeing reclaimed the crown as the world's top airplane manufacturer, booking twice as many orders as Airbus, which had held the distinction since 2006.
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