In October 2019, after two Boeing 737 MAX planes crashed killing all 346 people aboard, CEO Dennis Muilenburg told a congressional hearing, "We know we made mistakes and got some things wrong."

Two weeks ago, after an emergency landing due to a terrifying door plug blowout on an Alaska Airlines plane at 16,000 feet, Muilenburg’s replacement, CEO Dave Calhoun told Boeing employees, "We’re going to approach this, number one, acknowledging our mistake."

Calhoun admitted airlines are alarmed. “Moments like this shake them to the bone, just like it shook me,” he said. “They have confidence in all of us—they do—and they will again.”

But will they?

Since the 737 MAX was cleared to fly, after the 2018 and 2019 fatal crashes, there have been 180 occasions where Boeing informed the Federal Aviation Administration (FAA) of a safety issue via a "service difficulty report." These occurrences represent any serious failure, malfunction, or defect aboard an aircraft whether it is found on the ground or in the air.[i]

Airline industry analyst Richard Aboulafia told NPR[ii] that the pursuit of shareholder value has caused Boeing to lose focus. Boeing has, “A management culture that under-resources and misunderstands what the people who build the planes actually need to do their job," he said. Aboulafia is the managing director at Aerodynamic Advisory.

In a statement, Boeing refuted the safety concerns: "Since the 737 Max returned to service, airlines have flown nearly 240,000 flights around the world, and are conducting more than 1,300 flights every day. The in-service reliability is greater than 99%, and is consistent with other commercial airplane models."[iii]

Still, Boeing continues to have a chronic quality control problem. “We’re going to approach it with 100 percent and complete transparency every step of the way,” Calhoun pledged at the employee meeting after the recent door plug incident. “We are going to work with the [National Transportation Safety Board], who is investigating the accident itself, to find out what the cause is.”

Boeing is slow in learning from failure and tragedy. The root cause of all these problems began decades ago when Boing shifted its focus from safety to profits. Below is an excerpt from a case study in my new book Walk Your Talk about Boeing’s culture change, ethical fading, and ultimate fall from grace.

Book Excerpt

In the Netflix documentary Downfall: The Case Against Boeing, there is an old aviation saying, “If it’s not Boeing, I’m not going.” The adage speaks to the culture of excellence Boeing built and the trust it fostered with airlines, pilots, and the flying public.

Boeing evolved in a low-competition environment. The lack of external pressure allowed engineers to focus on quality and safety, which became the pillar of its work culture, part of Boeing’s identity, and earned the public’s trust. From its 1916 founding until Airbus entered the scene in 1967, Boeing was the primary commercial airplane supplier in the world, and since the late 1960s, the Boeing 737 dominated.

In the 1990s, competitive pressure intensified. Boeing gobbled up Rockwell International for more than $3 billion in 1997, and it acquired its primary domestic rival, McDonnell Douglas, in a $13 billion stock swap the next year.

The integration of McDonnell Douglas rocked Boeing to its core. The new entity took Boeing’s name, but as McDonnell Douglas executives ascended to the helm, the Boeing culture of quality and safety yielded to the pursuit of shareholder value. Rick Ludtke, a cockpit designer for the 737 MAX, said “Everything revolved around Boeing stock prices,” in Downfall.

The quality Boeing was once known for evaporated. “Before McDonnell Douglas, we just didn't take shortcuts because it just wasn't the Boeing culture,” Cynthia Cole, a test and systems engineer and 32-year Boeing veteran, said in the Netflix documentary. “You do it right, and you build in the quality and the safety, and the profits will follow. But all that changed, and it was just heartbreaking.”

In May 2001, Boeing moved its corporate offices from Seattle to Chicago. "It really separates the business -- commercial airplanes -- that is headquartered in Seattle from the strategic, corporate-center role," Chairman and CEO Phil Condit told CNN's The Money Gang. "It's that separation we were after."[iv]

The last statement perturbed Boeing employees. “One of the arguments for moving to Chicago was to gain separation from the technical people back in Seattle so that executives could make financial decisions without as much pushback from engineers,” Ludtke said. To the Seattle team, it seemed a line of demarcation was being drawn between “the suits and the boots.” It was a divorce and Chicago had custody of all the decisions without input from the people closest to the problems.

Much of the credit, or blame, for the changes to Boeing’s culture goes to Harry Stonecipher. He was McDonnell Douglas’s CEO, and after the merger, he served as Boeing’s president and CEO from 1997 to 2002. Stonecipher said he became a "lightning rod" for employee discontent because of post-merger changes. "When people say I changed the culture of Boeing, that was the intent, so that it's run like a business rather than a great engineering firm," he said. "It is a great engineering firm, but people invest in a company because they want to make money."[v]

Be on the lookout for Walk Your Talk this summer to learn how to capitalize on the relationships between leadership behaviors, employee sensemaking, work culture, and organizational success. The book offers a road map anyone can follow to promote psychological safety and employee wellbeing.

If you want to be a part of my book’s journey, I am crowdfunding the publishing of my book, and I would love you to be part of my author community. You will also get to review early chapter drafts and help me pick out a book cover, as well as secure an advanced copy of my book before it hits the shelves.

Presale Campaign

[i] https://www.bbc.com/news/business-59420570

[ii] https://www.npr.org/2024/01/27/1227278489/boeing-737-max-9-alaska-united-airlines-resumes-flying

[iii] https://www.bbc.com/news/business-59420570

[iv] https://money.cnn.com/2001/03/21/companies/boeing/

[v] https://www.chicagotribune.com/chi-0402290256feb29-story.html