The rise and fall of corporations. The rise is always trumpeted by the great leadership, the great products, the great people who make them. That said, it’s only fair that we paint a picture of the potential demise of a formerly great U.S. company. Such a fall, except for paradigm shifts in technology, is nearly always caused by bad leadership, faulty products and employees who finally give up fighting their knuckleheaded leadership and just do what they’re told. They stop thinking and communicating because it doesn’t matter. They stay for the paycheck, but their heads and hearts are no longer in the work.
Recent news coverage of Boeing, in the wake of two Boeing 737 Max crashes, tells the story of a culture that doesn’t value people’s experience, knowledge, common sense and feedback. It details a series of failures, based on wrongheaded thinking, that leaves little doubt why Boeing is in a mess. And this mess is all self-imposed.
- An April New York Times story revealed “a culture that often valued production speed over quality.” The paper reported that “workers have filed nearly a dozen whistle-blower claims and safety complaints with federal regulators, describing issues like defective manufacturing, debris left on planes and pressure to not report violations.” Meanwhile, Kevin McAllister, Boeing’s head of commercial airplanes, maintained that he was “proud of our teams’ exceptional commitment to quality and stand behind the work they do each and every day.” Obviously, he’s not plugged into reality—it’s marketing speak.
- A June 27 Washington Post story reported that Boeing took more than a year to inform the FAA about “ a software problem that disabled a crucial warning light connected to the automated system at the center of the tragedies.”
- And according to a June 28 Bloomberg story, “Boeing was laying off experienced engineers and pressing suppliers to cut costs,” instead relying on temp workers “making as little as $9 an hour to develop and test software.”
The same day the Post article appeared, Boeing CEO Dennis Muilenburg said, "We're going to be working with all of our customers around the world to make things right.”
The question is: How do you make things right for the 346 souls who lost their lives due to Boeing’s failure to ensure customer safety? These reports show a longstanding pattern of bad behavior by Boeing’s leadership, including bullying and disrespect for regulations and of FAA officials. That said, FAA officials are guilty themselves for their own passive and unacceptable behavior.
These reports confirm the complete failure of leadership from the boardroom to the shop floor and functional departments as well. There are clear examples that show, to one degree or another, functional leaders and their people were being complicit.
Many of us have heard this phrase to represent poor leadership: “The fish always rots at the head.” How true that is in the case of Boeing. The very top of the organization expected their people to take shortcuts and do whatever was necessary to get product out the door. In spite of any pushback, Boeing’s senior people stampeded ahead with selfish motives: We cannot let Airbus continue to eat into our market share; we cannot afford to miss our forecasts to Wall Street, they’ll trash our stock, etc. Never spoken out loud (except maybe in the boardroom or their private offices) was the lament about what it would mean for them personally in terms of smaller salary bumps and bonuses, if any. Yet I suspect this factored into every decision. This kind of self-serving agenda has outweighed the responsibility leaders have to their customers and to the customers’ customers—the flying public.
This sad and deadly situation is a powerful reminder that great leaders get what they expect but, unfortunately, so do bad leaders. Some bad leaders are guilty of more than having giant egos. Sometimes they’re incompetent. Sometimes their actions are criminal.
When leaders lose their moral compass and stop listening to people who know their jobs inside and out, the company starts down the path to oblivion. I would suggest that is what’s happening at Boeing. And based on the articles that have surfaced since the April crisis, it appears to have been going on for years.
Yes, we’ve all been on their planes for decades and arrived safely. But based on the culture that is now clear at this behemoth company, particularly as it pertains to the 737 Max, maybe we’ve just been lucky. Or I suppose it is possible that much stronger and more ethical leadership was in place when the older versions of Boeing planes were made—that is, leaders who actually expected Boeing’s planes to meet all safety and quality standards. That takes a very different culture than what is present today.
Where Is the ACCOUNTABILITY?
Finally, I’m outraged that the media’s response has been muted on the lack of accountability by a host of Boeing executives. Sure, the CEO says the obligatory words to the press: “I own it.” In my view, he won’t own it until he is fired for the culture he has created and the damage the entire management team has caused putting the public at risk—being incapable of doing the right thing for airline travelers, and for having no respect for the workers in Boeing factories who have been browbeaten into doing things they know are wrong. How can a management group make such unwise and unsafe decisions to make buyers pay extra for life-saving standard equipment? Those aren’t luxury items. Anything associated with passenger safety must be standard equipment on all planes. Why can’t Boeing seem to do the right thing on issues as basic as this?
I’m still waiting to see some decisive actions, including the rolling of numerous leadership heads down the halls of the corporate office and elsewhere. This starts with the board of directors, who likely have also drunk too much Kool-Aid to be clear-eyed in executing their responsibilities for proper governance of the company. In spite of marketing/communications exhortations that Boeing is “fully committed to meeting the rigorous standards” and “This is precisely how the system is supposed to work; rigorous oversight by the FAA, coupled with significant Boeing investment in process, systems and people, leading to continuous improvement in safety, quality and compliance.” This is B.S.
I’m also still waiting for some heads to roll at the Federal Aviation Administration for the boneheaded move of allowing Boeing to do some of their own inspections “because they were more qualified” to do the inspections than FAA personnel. This is nonsense. FAA people get paid to know! If they don’t, then they better damn well find out how to learn what they must know or be fired for incompetence. It also wouldn’t hurt if FAA inspectors would grow a backbone and understand their jobs are about protecting the public. If they don’t do that, then who needs them?
Clearly, when the FAA authorized Boeing to do some of their own inspections, in the place of qualified FAA people, they left the proverbial fox to watch the hen house. The fines that could have been assessed to slow Boeing down to “do it right the first time” were delayed far too long, are ridiculously low and caused no behavior change by Boeing officials. Let’s face it. A fine of $12 million dollars is a rounding error on Boeing’s 2018 net income of $10.7 billion. In short, the FAA has failed miserably in holding Boeing accountable to the public they serve.
Everyone who works on a factory floor knows that safety is Job No. 1. Job No. 2 is making safe, quality products to a robust, defect-free design for customers. Job No.3 is to deliver it on time to customers. This is only possible with real leaders who ensure their people are fully trained to do their jobs and have the authority to stop the process when there is a processing issue. It’s unfortunate that those at the top at Boeing don’t understand this. Culture change in the true spirit of continuous improvement will never happen as long as the incumbents are allowed to stay.
Companies with a culture of continuous improvement have leaders who run to problems, shine a light on them and work to eliminate root causes. They make sure that the necessary resources, e.g., product design and process expertise, raw material sources, maintenance personnel, in-house lab techs, are deployed to support those front-line people charged with corrective action. Products don’t get shipped until they are right. Period.
Bottom line: It’s ALL about leadership. It’s ALWAYS all about leadership! And Leadership is ALWAYS ACCOUNTABLE for what happens or fails to happen on their watch. In that spirit, there should be punitive fines or worse for the company and absolutely no golden parachutes for anyone in leadership positions.
“Become the kind of leader that people would follow voluntarily; even if you had no title or position.”—Brian Tracy
“Leadership is a potent combination of strategy and character. But if you must be one, be without the strategy.”—Norman Schwarzkopf
Larry Fast answers your questions in the IndustryWeek feature Ask the Expert: Lean Leadership. Fast is founder and president of Pathways to Manufacturing Excellence and a veteran of 35 years in the wire and cable industry. He is the author of The 12 Principles of Manufacturing Excellence, A Lean Leader's Guide to Achieving and Sustaining Excellence, 2nd. Edition.