Airbus, currently being presided over by its second Chairman in ten months, is a larger-than-life example of how the world reacts to tales of missed corporate expectation.
Everything's big about the Airbus case - the stakeholders, the interests, the money and the egos (not to mention the A380 itself) - which makes it easy to spot the issues that businesses have to deal with when they consider outsourcing.
Above all, the case shows that outsourcing decisions are seldomly based on business reasons alone. Emotional motivations are just as important.
Now, I’m not going to dwell on any partners that may, or may not, have let Airbus down. And I won’t be fuelling the sceptcism by referring to ‘crippling production delays’ or dramatically ‘shelved plans’.
But what I do want to underline is the emotions that so easily become a focus in high profile business agreements. The A380 is the most public of products, with the potential to touch many people’s lives when the project eventually bears fruit.
What we all need to ensure we remember is that this is just business, and emotions do play a large part whether we like it or not. It’s the same in all business relationships, including large outsourcing deals.
Cultural bonds between companies make a huge difference. Trust is paramount. When you’re giving a sensitive part of your business away to a partner to look after, the deal just has to feel right.
The sooner businesses realise that, despite the myths that ‘greed is good’, emotion plays a large part in modern corporate relationships, the better.
Both machines are historically significant, and fascinating in their own way. I thought I’d share some statistics about them...
The ‘Turing Bombe’
Manufacturer: The British Tabulating Machines Company Date of manufacture: 1940 Processor speed: 17,576 code combinations tested in 6 hours Size: 7ft x 6ft x 2ft Use: To break the German Enigma code during World War II Cost: £100,000
Manufacturer: International Business Machines Date of manufacture: 2008 Processor speed: 1,600 trillion calculations per second Size: 12,000 square feet of floor space required Use: Ensuring the US stockpile of nuclear weapons is safe and reliable Cost: $35 million
The furore surrounding the ‘exploding batteries’ incident seems to have died down now, but not without creating a landslide of negative media coverage for Dell.
While Apple’s press office went into overdrive in a bid to convince consumers that this was all Sony’s fault, it probably needn’t have worried. The tagline that stuck was ‘the largest recall in the history of the consumer electronics industry’. Sorry Dell, that’s all yours for a while.
Whenever high profile incidents such as this occur at the same time, it always exposes underlying feelings about a brand. In this instance, when media opinion about two huge manufacturers was crystallised by two near-identical incidents and almost the same time, the difference was marked.
Once again, the iPod’s impenetrable ‘halo effect’ on its mother company protected it. Over on the other side, Dell was consistently bashed, as reports leaked out of airlines banning their batteries and profits missed forecasts for the fourth time in 12 months.
But in reality, all it takes is to look slightly behind the mainstream news outlets to see that Dell is succeeding in markets where others are yet to get a foothold.
It all goes to show that, in the case of a media crisis, a lot of the fallout will be due to the prevailing opinion about your brand. The positive feeling about Apple thanks to a couple of good products carried it through, while Dell’s recent troubles amplified the negative, no matter how underserved that coverage might have been.