Manning Boeing

As the premiere manufacturer of commercial jetliners and the world’s second-largest defense company, with a heavy hand in NASA and other government initiatives, a stray laptop at Boeing is going to make headlines.

In November of 2005, when a stolen laptop was reported at Boeing containing data on 161,000 current and former employees, it was unfortunate. When a second laptop was reported missing in December of 2006 containing information on 382,000 current and former employees, it was unacceptable. And this time it resulted in one employee’s termination.

Boeing is just one of many companies that has been hit by data loss. As laptop loss and theft have become commonplace in the daily news, it’s become clear that technology on its own doesn’t offer a complete solution. Security has since become an integral part of HR, as today’s security threats are more about managing people than technology – a conclusion that Boeing has had to learn the hard way.

After a one-two punch from repeat laptop incidents just barely a year apart, Boeing experienced firsthand that technology alone just doesn’t cut it. “When we lost the computer in November of 2005, we approached it from ‘let’s make sure we have the right technical solution in place’,” says Stephens. “When we lost the data on the computer stolen in December this last year, we learned that technical solutions alone are not enough. For us, that is a frame-breaking change. We have to recognize that while technology enables capability, we also have to talk about our policies, procedures and work practices.”

Since that time Stephens has been steadily at work to revise and implement internal security practices to prevent any similar security breaches from recurring. Stricter strategies around personally identifiable information have been integrated across the company. “We made a decision that personally identifiable information cannot be operated on outside of Boeing premises,” he explains. “Any notebook computer that interfaces with the system we’re operating on with personally identifiable information can no longer be taken off Boeing premises. Computers are stolen everyday and while we think encryption is important, we no longer think that’s enough.”

One of the new practices was implemented after he discovered approximately 250 of Boeing’s systems used social security numbers as the search key. Now they’ve replaced social security numbers in all of their systems with a Boeing employee member ID number, called the BEMS ID, to serve as the key. If systems – such as payroll – do need to use social security numbers, no access is allowed from outside the company firewall.

To back up their recent security policy initiatives, Boeing has also enforced sterner disciplinary measures. When a single individual’s actions put into risk thousands of employees’ personal information, a slap on the wrist won’t suffice anymore. So far Boeing has set the bar the highest – with termination of the employee who was responsible for the December laptop incident.

According to Stephens, the employee didn’t follow a procedure that they had already been trained on twice. “From a policies-procedure standpoint, we have to take stern action when individuals don’t follow the policies we have in place. We’ve never found a situation where an employee wants to do something wrong – we usually find someone wanting to take a shortcut. When we have an egregious violation, we have some pretty strong penalties that result, including termination of employees.”

The dismissal of the employee was a necessary wake-up call not only to Boeing employees but to employees in every company across the industry. “You never want to find yourself in a position of having to use a stick, you always want to use the carrot – but in some cases, that stick’s important so that people will recognize there is accountability for actions in all that we do.”

Boeing is also taking that level of accountability outside their organization. The company has begun taking into account the security practices of their fellow partners and suppliers – since their actions naturally trickle back into Boeing’s overall state of security.

“We have a number of suppliers and partners who support us in benefits administration and certainly have and need access to personally identifiable information,” Stephens says. “Now we have discussions in review of their policies and procedures because we know that if there’s an event that occurs at their facility with our employee information, ultimately, we’re accountable.” He recognizes that the responsibility to trace of information all the way through the system is an important part of the accountability Boeing’s leaders have towards their employee’s data. ”When we lose data, we violate the trust that the employees have in us,” he says.

The benefits drain

The second major HR challenge facing Boeing – and every other HR organization around the country – is the rising cost of benefits. According to the Towers Perrin 2007 Health Care Cost Survey, healthcare costs for employees are expected to rise by six percent in 2007. Estimated to have increased by over 60 percent in the past five years, healthcare costs are continuing to tighten their stranglehold on companies offering competitive health plans.

“We recognize our competitive and market-based healthcare and pensions plans are one of the reasons employees want to come to work at Boeing,” Stephens says. “The cost of each of those continues to rise so the challenge for us is helping to make sure we share with employees what benefits they have.”

Not only is Boeing trying to improve visibility of employees’ available benefits but it is also trying to educate employees on how to maximize the value of their benefits, and therefore, help manage costs for Boeing. “National healthcare costs are increasing seven to 10 percent on an annual basis… so we really have to work hard to help our employees recognize their actions have an impact on healthcare costs,” Stephen says. “Starting simply with lifestyle – what people do in terms of what they eat, whether they exercise regularly, whether they smoke – all have an impact on things like obesity, diabetes, heart conditions.”

Boeing is also committed to helping employees become better healthcare consumers. Employees are encouraged to ask doctors questions about their prescriptions, how they work and the cost involved. Stephens estimates less than five percent of people even ask what the cost is. “We as a company are working with a number of other companies, associations and healthcare providers to make sure there’s greater access to healthcare cost information so that employees can make informed decisions about which healthcare professionals they would choose.”

On the pension side, Boeing is committed to creating awareness to help employees reap maximum benefits. “The challenge on the pension side is about how do we help employees understand the options they can take to make sure they’re maximizing their pension and their retirement benefits downstream,” Stephens says. “One is helping employees recognize that they need to be active participants in savings programs – it’s amazing to me that not all employees take maximum benefit of being able to put money away and have the company match that anywhere between four and six percent depending on what kind of programs they’re in.”

Another important discussion that’s on the table for Boeing is where the responsibility rests for their defined benefits plan versus defined contributions plan. “When we look at the volatility of the market, our pension obligations can have a huge swing in the balancing for the company,” Stephens explains. “So helping employees recognize that they can make some informed decisions about how they make their investments is an important part of looking at whether or not we transition from a defined benefits plan to a defined contributions plan.”

The future of science and technology

Boeing’s third major concern is an issue that has larger societal implications, as it affects the future wellbeing of our nation: the sliding number of students entering mathematics, science and engineering fields. As America falls dramatically behind other countries – it’s estimated that enrollment in science and engineering college programs is expanding ten times faster in China than the United States – lagging technology skills in the future will put the squeeze on the US to look overseas or else fall behind.

“We as a company are so dependent upon the innovation and creativity of our employees that making sure there is a pipeline available to meet our needs long-term is important,” Stephens says. “There is not a technology-oriented industry in this nation that is not concerned about the pipeline of young people and the careers that they are pursuing. We don’t have to look too far beyond high school graduation rates, which limits the pipeline to the number of students who are pursuing math, science and technical degrees at the college level.”

Boeing is facing the challenge of how to make rigorous courses in the math, science and technology curriculum appealing to students. “The challenge is how do we help make it interesting and relevant so students recognize, ‘If I take this course or curriculum, I, too, can develop the next commercial airliner or develop systems that travel in space’? It’s a very rewarding career, not only in terms of what it is they do but it’s rewarding financially as well. Salaries in the engineering field are in fact very, very good compared to some of their peers in the marketplace.”

With the number of US students entering science or engineering degrees on the decline, it’s a real concern for both Boeing and the overall economy. “Looking at the environment and how we all work together in our cities, there’s not an area today that doesn’t require a good understanding of math, science and technology for people to be successful simply operating as citizens,” Stephens says. “We need to do a better job of trickling out in the media helping people recognize the importance it plays in all of our lives and the importance it plays economically, and helping students see a great value in that.”

Stephens has a personal stake in supporting activities to increase awareness and education around technology-related careers. He served on US Secretary of Education Margaret Spelling’s Commission on the Future of Higher Education in America and was appointed by President Bush to the Board of Advisors on Tribal Colleges and Universities. Regarding his advisory board role, he says, “We work with many, many different organizations, colleges and universities to help make sure we have a pipeline of employees for the future.”

Despite the weakening pipeline, the good news is Boeing is often viewed as the ideal employer for engineering and science college students. One of the attractions is that employees can advance their education while working at Boeing without dipping into their own pockets. “Having an educational program and systems in-house is critically important in creating new products and services and innovating regularly,” Stephens says. “One of the things that attract many of the new employees is our college education reimbursement system called the Learning Together Program. Last year alone we spent about $105 million sending our employees back to school, where they can pick up any degree and we pay the full cost of tuition.”

And with such a diversity of products and services to work on, it’s no wonder that Boeing is viewed as one of the top best places to work in the eyes of science and engineering students. “What other company in the globe has such a great list of products and services? Anywhere from building and launching satellites into space to our systems that support a national defense whether it’s the F/A-18E/F Super Hornet or the AH-64 Apache helicopter or things that are going to help our troops on the ground be more successful through Future Combat Systems or products like our missile defense programs. It’s difficult to believe you could find a better place that has more diverse opportunities for employing talent, being engaged in programs and being able to move in many places within the company.”

While Boeing is typically synonymous with innovation due to it’s commonly recognized products and services that range from the commercial airline industry to outer space – without the people, innovation wouldn’t be possible. “Most note the Boeing brand because everyone has touched our products and services in one way or another,” Stephens admits. “But frankly the most important thing that Boeing brings is its people because people bring the innovation and creative ideas that are able to create those products and services.”