Boeing Needs a Culture Overhaul. Could Strategic Hiring Help?
In the wake of Boeing’s safety failures, it’s simple to suggest the aerospace company needs an overhaul of its corporate culture. Boeing turned away from a long-held focus on safety and excellence, a shift chronicled in a 2022 Netflix documentary that examined the cause of the 737 MAX crashes in 2018 and 2019.
Following the door-plug blowout on a 737 MAX 9 last January, a New York Times commentator wrote that Boeing is “paying the price for a shift in its corporate culture made decades ago.” But changing corporate culture isn’t simple
Change from the Top-Down, Buy-in from the Bottom-Up
Typically, culture change begins with a new CEO—and perhaps a cascading set of replacements in the C-suite and other senior-leadership positions. Then, a process of corporate soul-searching usually envisions and describes a set of desired core values that are used to guide and justify wide-ranging changes to operations and incentive structures. After those strategic and tangible changes occur, the culture itself—as represented in the attitudes and behaviors of employees—is often slow to follow, especially if the organization is very large.
Unlike corporate leadership, a very large workforce can’t be replaced in a matter of months, or even years, and the existing workforce will be accustomed to the old culture. In fact, many employees likely remained with the organization because they were comfortable—or even thriving—in the previous, undesired culture.
So, organizations put tremendous effort into re-training existing employees and reshaping attitudes. But sometimes changing corporate culture simply takes time to phase in enough new employees to tip the cultural balance in a new direction. This is where culture-fit measurement systems, the subject of my recent research, come into play.
In these systems, hiring managers use structured interviews, behavioral assessments and situational judgment tests to gauge whether a candidate has a predisposition toward the core values an organization wants to embrace.
The body of research on culture-fit measurement systems in hiring is relatively young and incomplete, but studies suggest the systems can be effective in improving performance, recruitment and retention by aligning individual values with organizational culture. I’ve contributed to this research over the past few years, studying how a company in the agriculture industry — with nearly 20,000 employees — used a culture-fit hiring system to infuse its workforce with a new, more-productive culture.
The Spillover Effect
Digging into eight years’ worth of human resources data, including hiring records and employee performance evaluations, I showed that employees hired under the culture-fit system did, in fact, out-perform employees who were not selected under the system. However, that conclusion gave only limited insight into the effect of the hiring system on the broader corporate culture and the amount of time required for significant change.
So, I looked to see if there was a spillover effect from the employees hired under the culture-fit system to pre-existing employees who joined the company before the system was in place. If the performance of existing employees also changed over time, it might indicate they were influenced by the cultural values of their new colleagues. I found several interesting things in this examination that would be relevant to an organization like Boeing.
When averaged across the entire company, the improvement I found in the performance of pre-existing employees was positive but statistically insignificant. However, when looking at smaller working groups within the company, the spillover effect on their performance was quite significant, suggesting that a critical mass of new hires can shift the cultural outcomes of a larger group.
This became obvious because the company I studied is highly distributed with more than 200 distinct offices. When the percentage of new, culture-fit employees in a particular office reached a critical mass—usually between 20-40% for this company—the performance of existing employees in that office began to improve significantly.
In fact, when the percentage of new employees in an office grew high enough (40-60%), the spillover effect had a greater cumulative impact on total office performance than the direct impact attributed to the new hires themselves.
The findings imply that the spillover effect of a culture-fit measurement system may be cumulative and likely hinges on the degree of the implementation. The spillover effect also appeared to be greater in offices with fewer total employees and—not surprisingly—on pre-existing employees who had been with the company for less time (and presumably less set in their ways).
Offices that added more senior managers through the culture-fit selection system also were more likely to experience performance improvements. Plus, the extent to which pre-existing employees were already aligned with the selection values also appeared to affect how much their performance improved under the influence of the new employees. (For more information on the research, read the two-page research brief published by the Bernstein Center for Leadership and Ethics at Columbia Business School.)
If Boeing pursues a cultural change, it won’t be a quick fix to the problems troubling the company. But using a culture-fit measurement system can potentially shorten the journey. If used, there may also be numerous inflection points before which cultural change seems to progress sluggishly—and after which, pockets of change may accelerate rapidly.
