Capitalism in space: Shortly after Bob Smith took over as CEO of Blue Origin he hired a consulting firm to review the company’s corporate culture and management policies, then had a top management briefing to review what that analysis had found.
Notes from that meeting by Blue Origin’s management have now become available, and suggest that the company’s management recognized it needed to make some changes in how it operated in order to better compete with SpaceX. Blue Origin had become hidebound, timid, and structured in a manner that made the creation of cost-effective engineering difficult. For example,
“Traditionally Blue team has not been focused on producibility and cost when designing,” another executive commented.
In response to the Avascent’s report on SpaceX’s cost focus, Blue Origin officials also acknowledged that they did not have an effective means of estimating costs before beginning a project. “Blue is riddled with poor estimating,” one executive wrote, specifically citing the New Glenn rocket. “The estimates barely cover the spot cost buy of that material based on market price, let alone the entire part material purchase. How did SpaceX keep to their target cost? They probably did a good job estimating. How they accomplished such good estimating is beyond me right now, but they did it somehow for their early years.” [emphasis mine]
As noted at the link, however, there is no evidence the company every made any of the suggested changes:
Whatever Bob Smith hoped to glean from the Avascent study, it’s not clear that the work has had a salutary effect on Blue Origin’s culture.
In the nearly three years since the report’s completion, SpaceX has gone on to launch more than 60 rockets, including four human missions, into orbit. SpaceX also has leaped ahead on a number of other fronts, including winning a multi-billion contract from NASA to build a Human Landing System for the Artemis Moon Program.
Blue Origin, by contrast, has succeeded in launching a single human flight on its New Shepard system—carrying Bezos into space for a few minutes in July. The company’s first orbital flight likely remains about three years away. Far from embracing openness, it remains more opaque than ever. And there are emerging questions about the company’s culture.
I would be more blunt. Prior to Bob Smith’s arrival in 2017 Blue Origin’s management style appeared somewhat similar to SpaceX’s, with regular almost monthly test flights of New Shepard. After he arrived everything slowed down, with the management style becoming all the things the 2018 Avascent study found wrong. And in the three years since that report and management meeting, it appears Smith did nothing to change anything. Blue Origin appears to remain a hidebound company going nowhere.
The company has vast resources due to the cash that Jeff Bezos has poured into it. It needs some good courageous leadership however. The main question will be whether Bezos can provide that.
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