by Michael Arbow, MBA
Partner, RSD Solutions Inc.
Nicknamed the 7-Late-7, Boeing’s 787 Dreamliner is scheduled for delivery to its first owner, All Nippon Airways Co. in the next few months. The project to develop a truly revolutionary passenger aircraft is now three years behind its original May 2008 launch date. The aircraft is revolutionary on innumerable fronts from studying human psychology to assist in interior design, having no rivets on the outside plastic skin and having engines that are 25% more fuel efficient and with less noise. Boeing further pushing the envelope in letting go of its intellectual property, allowing vendors to speak directly to each other rather than through Boeing and developing the most comprehensive integrated design software on earth.
For managers, senior executives and shareholders the downside risk for this project were huge from a safety perspective and just plain bad press; and Boeing has certainly experienced its share of problems. While I do not have access to the Boardroom at Boeing, I can imagine numerous heated debates between the risk adverse (who only see downside risk) and the dreamers (the upside crowd). In the end, I believe the company realized that despite downside costs, the upside potential of their new form of operations and their aircraft would easily compensate those cost. In your firm is risk looked at from both sides and with equal “weight” or is the fear (?) of downside risk either exaggerated or considered a more likely event despite the potential magnitude of the upside?
For more information on Boeing’s 787 click on this Bloomberg link:
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