6.10 The Rise of Boeing

Marcos Antonio de Lima Filho, PhD.

The Jet Age generated a significant shift in the competitive landscape of the aviation industry. The Boeing 707 disrupted the dominant design of airliners, initiating a new cycle of technological experimentation and competition. The 707 became the leading plane of the Jet Age, and its design features have since become standard in most commercial aeroplanes. Boeing, which had been a relatively small player in the commercial aviation market, emerged as the dominant force with its innovative 707 aircraft. This marked the decline of other major manufacturers, such as Douglas, Lockheed, and Convair. However, the disruptive status of these events is contested.

In this section and the next (6.11 The Rise of Airbus), I discuss earlier concepts of disruption that could offer valuable contributions to the advancement of disruptive innovation theory. By examining the Jet Age and the rise of Boeing through the lens of these earlier frameworks, we can gain deeper insights into the character of disruptive innovation and its impact on the evolution of designs, markets, and industries.

In The Jet Age Disruption? (Section 6.6), it is noted that Christensen reinterpreted the concept of disruption, offering a more restricted understanding of such innovations. Since then, disruptive innovation has become a specific type of technological change which operates through a specific mechanism and has specific consequences (Danneels, 2004). Much like the iPhone, the pioneering Boeing 707, the first Airbus, and the earliest jets were not low-cost, low-performance innovations. Hence, similar to other high-end market entrants, these instances conflict with several fundamental assumptions of disruptive innovation theory (Christensen et al., 2018).

Unlike his predecessors, Christensen saw the jet age as a “sustaining innovation”. This concept forms the basis of the sustaining-disruptive dichotomy, which he explained as follows:

Most new technologies foster improved product performance. I call these sustaining technologies. Some sustaining technologies can be discontinuous or radical in character, while others are of an incremental nature. What all sustaining technologies have in common is that they improve the performance of established products, along the dimensions of performance that mainstream customers in major markets have historically valued. Most technological advances in a given industry are sustaining in character. An important finding revealed in this book is that rarely have even the most radically difficult sustaining technologies precipitated the failure of leading firms (Christensen, 1997).

Despite being a fundamental component of his model, Christensen did not expand fully on how to further categorise sustaining innovations. There is just a brief mention of Henderson and Clark’s (1990) categories of innovation in a footnote. From this, Christensen indicated that sustaining innovations could be categorised as either radical, modular, architectural, or incremental innovations (Christensen et al., 2004, p. 24), although various classification frameworks could also apply. In conclusion, while disruption has a strict definition and mechanism, sustaining innovation is a broad category that includes nearly all other forms of innovation.

Consequently, even with the benefit of hindsight, Christensen’s theory still fails to adequately explain the Jet Age or Boeing’s ascent. After all, the primary emphasis of his theory lies in understanding disruptive innovation, not exploring the intricacies of sustaining innovations.

However, the forerunners of disruptive innovation used to define disruption in different terms, and most importantly, these early frameworks/theories of disruption seem to have more explanatory power. They can also account for the numerous “anomalies” in the current theory of disruption, such as the high-end disruptors. For these reasons, I think that these early studies can serve as a foundation for a new paradigm of disruptive innovation, one that accounts for anomalies and is thus more relevant to practice.

As we have seen, William Abernathy helped pioneer the idea of disruptive innovation in the early 1980s, more than a decade before the publication of The Innovator’s Dilemma. In his works, Abernathy defined as “conservative” innovations whose effect is to extend or refine existing design concepts or production systems, and as “disruptive” those innovations whose effect is to destroy such concepts or systems (Abernathy et al., 1983, p. 97). Abernathy evaluated an innovation’s disruptiveness based on two primary dimensions: the technological/productive domain and the market/customer domain. Within each dimension, innovations can have varying impacts. On the conservative side, innovations can augment a firm’s existing competence, while on the radical side, they can disrupt and destroy, making current resources, skills, and knowledge less valuable or even obsolete (Abernathy & Clark, 1985).

Abernathy, in contrast to Christensen, fully acknowledged the radical and disruptive nature of the Jet Age. The jet engine was a revolutionary innovation, one that “disrupts and renders established technical and production competence obsolete” (Abernathy & Clark, 1985). Abernathy also explained that Boeing managed a technology-based reversal in the process of industrial maturity (Abernathy et al., 1983, p. 122). In this process, “Innovation once more carries a premium, as the focus of innovation shifts back from the refinement of existing concepts toward disruptive change in the concepts themselves” (Abernathy et al., 1983, p. 28).

This first characterisation of disruption contrasts with how disruption is currently defined. For Christensen, “no innovation is inherently disruptive“, which means that “disruptive innovations must be evaluated relative to a firm’s business model” (Christensen et al., 2018). As such, Christensen conflates the technologic variable with the business model/competitive strategy variable. This was an innovation that Christensen introduced into the definition of disruption. Notwithstanding, the forerunners of disruptive innovation recognised the importance of analysing these variables as distinct dimensions.

Table 6.10.1 presents Abernathy and Clark’s (1985) criteria for assessing the disruptive impact of innovation. In the first column, the authors break down the technological domain into six more subdomains: design, production, skills, materials, capital equipment, and knowledge base. Based on this framework, I present a qualitative assessment of the jet engine’s disruptive impact on each subdomain (third column).

The Jet Age also marks the transition from one dominant design (piston engines) to another (jet engines). William Abernathy and James Utterback introduced the concept of dominant product design and suggested that its occurrence alters the character of innovation in firms and industries (Utterback & Abernathy, 1985). A dominant design is a single architecture that establishes dominance in a product class (Abernathy, 1978). Before the Jet Age, the Douglas DC-3 was a dominant design in the commercial aircraft industry. No major innovations were introduced into commercial air­craft design from 1936 until new jet-powered aircraft ap­peared in the 1950s; Instead, there were simply many refinements to the DC-3 concept (Abernathy & Utterback, 1978).

With the 707, Boeing disrupted the dominant design of airliners, initiating a new cycle of technological experimentation and competition. As shown in Figure 6.6.1, the change from piston to jet engines happened in less than a decade. The 707 established a jet airliner template that remains little changed in basic configuration: even the giant Airbus A380 has essentially the same layout as the 707 (Eden, 2015). The 707 became the leading plane of the Jet Age, and until the advent of jumbo jets more than a decade later, the great majority of people who crossed the oceans did so in a Boeing 707 (Verhovek, 2010).

By definition, a dominant design in a product category is the one that wins market following, the one that competitors and innovators must adhere to if they wish to gain market share (Utterback, 1994). The dominant design is equivalent to the general acceptance of a particular product architecture (Henderson & Clark, 1990). Typically, this takes the shape of a new product (Utterback, 1994) or a single product architecture that becomes widely adopted in an industry (Argyres et al., 2015).

However, the 707 was not the first commercial jet. So, what precisely made the Boeing 707 a dominant design, instead of the British Comet? In short, the 707’s pioneering architecture (Figure 6.10.1).

As mentioned previously, the British Comet 1 was the first commercial jet to enter service, in 1952. However, after a series of mid-air disasters in 1954, the Comet fleet was grounded and a large investigation started. This failure was one of the factors that led to Boeing’s rise to leadership in the industry (Henderson & Clark, 1990).

De Havilland tried to save the Comet program with further design modifications. Pressurisation testing found fatigue crack growth in the Comet’s skin around cut-outs such as windows and escape hatches (Withey, 2001). To remove any possible problems with cracks at the corners, the next generation of Comets would feature oval windows, instead of the original square-shaped ones (Darling, 2001; Withey, 2001). The fuselage structure was re-engineered, and the skin thickness was increased.

After the problems of the Comet I, de Havilland produced the Comet IV, which was larger, carried 80 passengers, and had a greater range (Withey, 2001). The upgraded Comet would also be the first commercial jet to fly across the Atlantic in October 1958. However, 3 weeks later, a Pan American Boeing 707 flew the same route carrying 120 passengers, indicating the supremacy of the American airline industry (Withey, 2001). The Comet’s chances of becoming a dominating product were jeopardised by De Havilland’s failed execution. As with all pioneers, the first to enter a new field are the first to encounter the problems, and this is especially so in commercial aviation, where failure can be spectacular and high-profile (Withey, 2001).

The 707 introduced a series of design features that solved most of the Comet’s problems: the swept wing design, the podded engines, and the rounded windows (Figure 6.10.2). Using their expertise in designing a new generation of bombers, Boeing had managed to engineer a more highly swept wing, more demanding in design and calculation terms than the Comet’s more conservative wing geometry (Nahum, 2017).

Before the Jet Age, aircraft wings were almost perpendicular to the fuselage, which was suitable for propeller-driven engines (Verhovek, 2010). However, as jet engines increased speeds, conventional wings generated more aerodynamic drag, resulting in reduced performance. Designers discovered that by angling wings backward, drag could be minimised. Boeing tested 68 wing types for over 27,000 hours, ultimately settling on a 35-degree sweep. Wind tunnel testing also allowed engineers to realize that engines did not need to be integrated into the wing, as in the British Comet, but could be mounted on struts instead. This arrangement made the engines much easier to maintain or replace, and eventually became the standard for jetliners (Verhovek, 2010).

The Comet featured two pairs of turbojet engines buried in its wings, closer to the fuselage. This configuration presented not only a construction problem, but a maintenance one as well (Davies, 2011). The pylon-mounted under-wing arrangement of the Boeing 707 set a trend that has been followed to this day for large subsonic aircraft; the main advantage of the podded under-wing arrangement is that it reduces the wing bending moment, since the engine weight partly offsets the upward force due to wing lift (Bernard & Philpott, 2010, p. 184). As a result, the 707 was the plane that defined and dominated the Jet Age. Boeing pioneered in the 707 design features that have since become standard in most commercial aircraft.

The 707 was a technological triumph, but how did it fare on the commercial side? De Havilland and Boeing were both entrants in the long-range airliner segment, with considerable expertise as military manufacturers. While Boeing had thrived as a defence contractor, its performance in the commercial market bordered on the anaemic: some of its civilian planes wound up too small for the passenger market, and some too big (Verhovek, 2010). The 1933 Boeing 247, the 1939 Boeing 314 flying boat, the post-war Boeing 377 Stratocruiser never sold in substantial numbers (Davies, 2011). From 1933 to 1955, Boeing had sold only 147 commercial aeroplanes in four models — it was a dismal record by any standard (Pandey, 2010).

As the 1950s began, Boeing had less than 1% of the commercial aircraft market, and even that share was eroding, for Boeing did not even have a single new commercial airliner in the design stage (Verhovek, 2010). From that 1% share, Boeing would eventually drive industry incumbents — Douglas, Lockheed, and Convair — out of the commercial airline market (Figure 6.10.3).

Boeing was ahead in the Jet Age, possibly due to the incumbent’s initial scepticism over the economics of jet engines. Early jet engines consumed significantly more fuel than propeller engines, undermining the primary advantage of jets: speed. This made airlines hesitant to invest in jetliners (Verhovek, 2010).

As a result, the application of jet power to commercial aircraft received little attention. The leading aircraft manufacturers in the United States, such as Douglas, Lockheed, Convair, and Martin, as well as the smaller companies in Britain, subscribed to the opinion that “the market was not ready for the jet engines” (Pandey, 2010; Davies, 2011). Accordingly, these industry incumbents preferred to refine, improve, and extend the life of their piston-engined aircraft businesses. From 1945 to 1955, the power of the piston engines had increased substantially, and their reliability had reached unprecedented levels; This permitted Douglas, with its DC-7 series, and Lockheed, with its Super Constellations, to develop bigger and better versions of their well-established types (Davies, 2011).

Meanwhile, De Havilland and Boeing took a less conservative and incremental approach: “Instead of enhancing and strengthening”, the jet engine would “disrupt and destroy” the piston engine. The effect of the Jet Age was a disruption of the established design of piston-engined airliners (Table 6.10.1), followed by substantial market shifts, leading to the downfall of incumbents and Boeing’s rise to dominance.

Nevertheless, even with the benefit of hindsight, Christensen saw the Jet Age and the jet engine as a “radical but sustaining innovation” (Christensen & Raynor, 2003). The rise of Boeing also contradicts Christensen’s definition of disruption, as the jet engine and jet aircraft were not only technologically superior but also more expensive: “The 707 cost twice as much as the piston-engine airplanes it replaced” (Pandey, 2010).

In contrast, Abernathy viewed the Jet Age as a prime example of disruptive innovation. Many theorists followed this research tradition, consistently emphasising the disruptive nature of this technological shift (e.g., Foster, 1986; Tushman & Anderson, 1986; Henderson & Clark, 1990; Anderson & Tushman, 1990; Utterback, 1994). Therefore, acknowledging and discussing these earlier perspectives on disruption could potentially contribute to the advancement of disruptive innovation theory.