Poor business management can prevent companies from growing or being as profitable as they otherwise could be. But sometimes the stakes are much higher.
Lives at Risk
The highest stakes are when lives are at risk. The last couple of years have been difficult for Boeing Airlines. Since the crash of a Lion Air flight from Jakarta in October 2018 and then another on Ethiopian Airlines flight ET302 on March 10, 2019, resulting in a combined 346 deaths, questions are swarming about Boeing’s business practices.
Among hundreds of texts and emails given to FAA regulators and the US Congress is this beauty: The Max 737 was “Designed by clowns who in turn are supervised by monkeys”.
This raises several questions about the culture at Boeing over the last few years. A comment like that can only come from someone in management and their attitude about the engineers and engineer supervisors that oversee the production.
It turns out that Boeing was under pressure to release the 737 Max as quickly as possible to compete with France’s Airbus. American Airlines was considering major Airbus orders in 2011.
Chasing Quarterly Profits
Boeing wanted to come out quickly with an inexpensive alternative based on their 737 NG model with slight modifications. When they discovered a problem with their addition of the MCAS software that should have required additional expensive and time-consuming simulator training, they hid things from regulators.
After the crashes the fur started flying. Employees were telling people about the pressure to keep up with “impossible” deadlines and hide things from regulators and customers. Management turned out pablum about “highest standards” for safety and business practices, apologizing for employee statements that were “inconsistent with Boeing values”.
Is There a Pattern Here?
Wait. I see a familiar pattern here. This did not just happen recently. CEO, Dennis Muilenburg was fired by the board. Prior to his tenure, James McNerney was CEO from 2006 to 2015. McNerney spent two decades at GE with Jack Welch.
Muilenburg was replaced by David L. Calhoun in December 2019, then Chairman of the Board of Boeing. Calhoun also spent two decades at GE with Jack Welch. The making of the current culture at Boeing began years ago with similar CEO’s and Board members.
Culture Starts at the Top
The culture of a company is dictated from the top – the CEO and the Board of Directors. It usually goes back many years. If employees are disgruntled with management, there has been a problem with management for quite a while.
Jack Welch was extremely successful at GE in the 1980’s and 1990’s and obviously influenced Boeing’s current management. (The fall of GE after his tenure gives a clue, but that’s a topic for another post.)
Things Can Turn Deadly
Something has happened at Boeing that turned deadly. The lack of respect between management and the engineers has not only cost Boeing many billions. It has cost hundreds of lives.
My blog posts, which you can see here, here, and here are not only about making more profit or having more business success. They are extremely important for many businesses like Boeing where the stakes are so high.
Another Way to Efficiency and Speed
Boeing could have produced the 737 Max quicker and less expensively and beat out Airbus had their culture been one of respect and honor for their workers.
Is Calhoun really the right choice currently for Boeing?