TechWatch: Confronting a Technology-Based Crisis

Recently, I received an interesting article about technology being at the heart of a major business failure. The article was written by Mel Duvall and Doug Bartholomew in February 2007 and stated, in part,

“In October 2006, Airbus chief executive Christian Streiff had delivered a speech announcing that the company’s A380 superjumbo would be delayed by at least two years. The delay and resulting changes to the program were expected to cost Boeing’s fiercest competitor as much as $6 billion in lost profits, by Airbus’ own reckoning. The cause, Streiff said, was due to compatibility issues with the sophisticated computer-aided design software used by engineers to architect the A380.”

It is becoming much more commonplace for technology to be at the heart of a major business challenge. We can expect this trend to increase in the future, as technology continues to make inroads into the mainstream activities of business. Of course, this is not confined to high-tech businesses such as aerospace. A decade ago, Thomas Davenport wrote in the Harvard Business Review about the challenges of putting enterprise information systems into businesses. He cited an example of a drugstore chain that had gone out of business due to the cost overruns of their technology implementation. In Ethix 51 I wrote about the challenge of implementing the right kind of digital technology in the healthcare field. It would seem there are few business areas that are immune from the problem of managing technology.

That this is a difficult problem is illustrated by the Airbus case. The delays and the losses are real. And the problems with the wiring are real. But, after reading the details of the article and talking to a number of technology friends in the business, I have concluded that the Airbus chief executive was wrong in identifying the source of the problem. I will try to justify this remark. For those not interested in the technical details, you can skip this next section and pick up after the explanation with more general comments about the management of technology.

The Wire Bundle Problem

In explaining the wire bundle problem at Airbus, the Duvall and Bartholomew article went on to say:

“Airbus engineers in Germany, where the plane’s rear fuselage section was being built along with the hundreds of miles of electrical wiring that power the main cabin, were using an older version of Dassault Systèmes’ trademark Catia computer-aided design software — version 4. Engineers in Toulouse, France, where the A380s were being assembled, were using a newer version of the software, Catia V5.

“When the first wiring bundles, large packs of preconfigured wires to power everything from lights to in-seat entertainment systems, began arriving at the assembly plant in Toulouse last June, Streiff said they didn’t fit properly from the rear section into the front section of the fuselage. Workers tried to pull the bundles apart and feed the wiring through the fuselage by hand, but with 300 miles of wire and some 40,300 connectors on each plane, the immensity of the problem soon became obvious. An unthinkable blunder had happened — as the computer-aided design files were passed between the different versions of the Catia software, the company said errors occurred. And software experts familiar with the incident say the errors included changes in measurements. Those errors are going to cost Airbus billions.

“‘The root cause of the issue is that there were incompatibilities in the development of the concurrent engineering tools to be used for the design of the electrical harnesses installation,’ Streiff said in his October speech about the delay. In other words, information from the two systems could not be exchanged accurately, or at the very least, Airbus did not integrate them properly. ‘We have to update and harmonize the 3D-design tools and database — and it will take time to do this,’ he added.”

This explanation of the problem seems unlikely for two reasons. First, designing wire bundles is particularly tricky because it involves so many factors: electrical flow, interference between wires, heat buildup, and length. In addition, a wire bundle, unlike a single wire, does not easily move around corners. The design of the physical bending of wire bundles is yet another type of analysis. Because of this variety of factors, many contractors do not even use Catia, primarily for mechanical design, for this task. Pointing a finger at Catia seems too easy and probably wrong.

There is a second reason Catia is the unlikely source of the problem. A fundamental requirement for any design system is to be able to integrate parts from an earlier design in the new system. Catia is widely used in both aerospace and automotive design. In both of these industries, new products are created as derivatives of older products. No one would accept a new version of the design software that could not accommodate previous parts designs. This would require starting over on a derivative model just because of a new version of the software. Even if Catia were used for the design of wire bundles, which I doubt, it would have to be able to manage parts from the previous version.

The Likely Culprit

A more likely explanation for the wire fit problem is that something was overlooked in the complexity of the wire bundle design. One scientist who I respect a great deal suggested the problem of the wide bending curvature for wire bundles could have been the key factor.

This wouldn’t be the first time for such a technical failure. Even NASA engineers failed with a crucial technical detail when, “The Mars Climate Orbiter satellite was lost in 1999. Failure to convert English measurements to metric resulted in the craft orbiting too close to Mars and crashing,” according to a NASA web resource.

But there is something different about the NASA problem. This is a technical detail that should have been caught with low level technical review. In the case of the Airbus problem, similar in one sense to the digital health records or the enterprise system for the drug store chain, there is a large scale system where the decisions are made at a very high level. It is increasingly apparent to me that senior managers must become much more adept at recognizing and dealing with crucial technology decisions. Often these are lawyers or MBAs with no background in technology. How do they make such decisions?

Management of Technology

In the long term, I believe the challenge for managers must be addressed in management education. No one would think about an MBA curriculum without marketing, finance, leadership, human resources. There is a growing recognition of the fundamental place of ethics and values in an MBA program. Some have added this area recently, while I am pleased to say that Seattle Pacific University has had ethics and values in its MBA from the first program.

A non-scientific survey of the curriculum for MBA programs shows very little in the management of technology. Yes, there are schools that offer such an MBA, such as Rensselaer Polytechnic Institute through the Lalley School of Management and Technology. And there are other schools that have a specialized degree focusing on the management of technology. But making this a special program suggests only certain people need the training in the management of technology. Rather, almost anyone in leadership in any industry needs tools for the management of technology in the 21st century.

New educational initiatives are important, but are not enough. The level of sophistication of modern technology means that executives need to be able to tap into technical resources that are probably located in their organization. How should they do this?

Forming a technology council is a start. Even here, however, there are some significant pitfalls. In my observation, managers tend to gravitate toward technical people they can understand — and this often also means that agree with them. An effective technology council will be made up of people with contrarian views, and who may not express those views in a very “politically correct” way. So I would suggest getting people on the council who are recommended by other technologists, rather than by management. Learning to work effectively with people who see the world differently than you do is the sign of a great leader. And this principle is taxed by this recommendation.

To demonstrate this, I’ve asked leaders to read the book I*Woz by Steve Wozniak (we will review this book in the next issue of Ethix). Many who have, refer to him as ego-centric, arrogant, and difficult to work with. Perhaps he is, but he is also very smart technically and generally (but not always) right. A technical friend said to me recently, in response to charges that technical people are arrogant, “Maybe we are just right!”


The continued increase in the technology component of most businesses offers great benefit, but accompanying risk. In my view, managers are not well equipped to deal with this risk. Better education and a strong, contrarian technology council offer help. There is one more thing. In his book Integrity (this book will also be reviewed in the next issue), Henry Cloud offers six characteristics of effective leaders. One of them is, “The ability to embrace, engage, and deal with the negative.” There is the easy temptation to look for someone to blame rather than solve the problem, as it would appear the Airbus leader did. Even without the training, and without the technology council, a wise leader will bring in the technical experts to understand the problem clearly, no matter the cost. Pointing the finger is never very helpful or productive.


Al Erisman is executive editor of Ethix, which he co-founded in 1998.
He spent 32 years at The Boeing Company, the last 11 as director of technology.
He was selected as a senior technical fellow of The Boeing Company in 1990,
and received his Ph.D. in applied mathematics from Iowa State University.