A few weeks ago Ethiopian Airlines Flight 302 crashed, killing all 157 people on board. Ever since, the makers of the 737 MAX aircraft, Boeing, have slowly but surely exhibited signs that reveal questions about its leadership capabilities. It can also be argued that there are systemic problems with the company’s corporate culture which may prove to be its greatest weakness.
I suggest to you that these same issues are found in many companies today. Indeed the concerns can be cited in several historical examples suggesting we have not learned from previous mistakes.
But first, to the issue at Boeing.
Investigators continue to piece together the cause of the crash in Ethiopia, but early indications suggest the aircraft exhibited the same fatal behaviors as Indonesia’s Lion Air Flight 610. It too was a 737 MAX aircraft that plummeted to the ground shortly after takeoff in October of 2018, killing all 189 passengers and crew. Flight data for both airplanes now seem to be eerily similar.
The evidence against Boeing’s lack of leadership—and not pilot error—is mounting. Governments worldwide seem to feel the same way. All countries have grounded the 737 MAX while investigators and engineers continue their sleuthing.
Ever since launching the 737 class of aircraft in 1967, Boeing has built and shipped over 10,000 of them to airlines globally. It was and continues to be a cash cow for the company. Things changed, however, in 2010 when the company discovered its main rival, Airbus, had launched the A320neo, a far more fuel-efficient short-haul airplane.
As reported by The Wall Street Journal, knowing one of its largest customers, American Airlines, had struck a tentative deal to replace its short-haul fleet with the A320neo, senior leaders at Boeing jumped into action. In fact, American Airlines asked Boeing to come up with something similar to the Airbus offering. Boeing made quick work of the opportunity and launched the 737 MAX nine months after Airbus’s announcement.
To appease the airlines it would eventually sell the 737 MAX to—and the potentially prohibitive cost of pilot training—Boeing exhibited its first leadership calamity. The company ignored its own “enduring values.”
Boeing claims to operate “by a set of core values that not only define who we are but also serve as guideposts to help us become the company we would like to be.” Many companies have a value that is centered on integrity. Boeing is no different. It defines integrity as taking “the high road by practicing the highest ethical standards.”
Another value is safety. “We value human life and well-being above all else and take action accordingly,” the company suggests, and that “by committing to safety first, we advance our goals for quality, cost, and schedule.”
Several media outlets have reported that the technical modifications made to the 737 MAX airplane came with no requirement for pilot training. Could it be that both integrity and safety were sacrificed to attract new customers or to protect existing ones? “And we aspire to live these values every day,” maintains the company. I am reservedly unconvinced.
It’s one thing to overlook the need for pilot training and the egregious ignorance of its values; it’s another to determine how that decision came to be. Sure, one might argue Boeing simply snubbed its values. But what if there was something entirely more sinister at play?
There is a case to be made that the following scenario might have played out with leaders at Boeing.
The company was desperately worried that the A320neo was going to cut into its 737 revenue base. Airbus had already announced its intention to produce a rival plane to the 737 with 15 percent fuel efficiency. Boeing had to take quick and decisive action in order to compete with its Airbus rival who had a head start. But how?
How could it produce an airplane that was 15 percent more fuel-efficient on a timeline that allowed it to compete with Airbus? The company thought about designing an entirely new plane but settled on an upgrade to its cash cow; the 737.
To accommodate the need for the 737 aircraft to become more fuel-efficient and hit the timeline targets, several technical changes were needed. For starters, it moved the engine forward & extended the nose landing gear by eight inches. This required the introduction of an anti-stalling mechanism known as MCAS— Maneuvering Characteristics Augmentation System.
With the urgency to meet market and competitive demands, did the company rush the design and production such that there might be a hidden fault? Could it be that the newly designed MCAS anti-stalling system was imminently set to fail or its related Angle of Attack (AOA) sensor might be feeding bad data to the 737 MAX’s flight computer?
Ultimately, did the company know about its flaws?
Now, about those values. Surely integrity and safety would come to the forefront when an airplane is designed, tested and then shipped out, ready for commercial flight, right?
Enter the Federal Aviation Administration (FAA.) Also reported by The Wall Street Journal, it seems the U.S. Department of Transportation (DOT) had already launched an investigation into the FAA after the Lion Air crash. The Department is seeking answers on how the 737 MAX received its safety certification. The investigation, according to The Wall Street Journal, “is being conducted by its inspector general, which has warned two FAA offices to safeguard computer files, according to people familiar with the matter.”
The FAA is under investigation by the DOT about the Boeing 737 MAX, all of this occurring before the most recent Ethiopian Airline crash, in which the same aircraft acted and behaved erratically just like the Lion Air disaster.
All of this points to a second major point and accompanying leadership calamity.
Boeing pushed for (and received from the FAA) a much lighter and faster safety certification approval. Perhaps because the 737 MAX was a so-called “derivative” model of the main 737 line, everyone on both sides of the leadership aisle at the FAA and Boeing got what they wanted. A quick and speedy safety approval.
The FAA with its reduced staff and growing lists of actions to take care of might have simply been fine with it. Maybe it even freed up time to get other actions completed on their lists. Boeing—in a herculean race to keep pace with Airbus—were likely keen to ensure that the plane made it to market as soon as possible, and with the least amount of disruption and cost overruns. (Let alone pilot training cost concerns from the airlines.)
It was reported by The Seattle Times that even after those MCAS and AOA modifications were made to the Boeing 737 MAX, pilots continued to be uninformed. Capt. Mike Michaelis, chairman of the safety committee of the Allied Pilots Association (APA), said, “We assumed they [major changes to the flight control system] were mostly cosmetic differences.”
But they weren’t.
The changes were very material. Those changes affected how the aircraft operated. It is now a question for authorities and others to determine if Boeing and the FAA knowingly (or unknowingly) rushed the design and the accompanying safety certification. The Wall Street Journal also states that Boeing knew the FAA might approve the safety certification quickly if the plane was considered a “derivative” rather than a major change or new aircraft altogether.
There is also that question about pilot training. Boeing knew that the technical modifications were material to the operation of the aircraft. Then why did the company knowingly fail to a) inform pilots of the changes by at least updating the Flight Crew Operations Manual or b) provide mandatory flight simulator training on the new MCAS and AOA changes? In either case, the pilots would surely be in a better position to know what to do should the plane begin to behave unpredictably after takeoff due to the bad sensor data.
Not only did the company (and FAA, arguably) ignore integrity and safety, perhaps Boeing leaders were incentivized by speed.
Recall the 1986 Space Shuttle Challenger disaster. While revenues and profit were not the motives—as is the case with Boeing—NASA was certainly up against the leadership traits of speed and power. The now infamous O-ring pressure seals served as the cause of the crash, but it was Utah-based contractor, Morton-Thiokol, that supplied the seals to NASA.
The O-rings had been tested to perform in 40-degree Fahrenheit or above weather conditions.
On that fateful morning in Florida in 1986, it was only 18 degrees. NASA knew it was an issue, but hours before the launch pressed the contractor to “green light” the launch, and thus the condition of the O-rings in 18-degree weather.
Robert Ebeling, one of the Morton-Thiokol employees experienced with the O-rings was the individual responsible for highlighting the potential for disaster. He got his team together at NASA’s request and debated (again) whether they could knowingly approve that the O-rings would not fail.
In the end, the team wanted NASA to wait until the afternoon when temperatures would be closer to 53 degrees Fahrenheit. Due to the pressure exerted by NASA—in addition to the capitulation of Morton-Thiokol senior managers—the company reversed its original decision and ended up giving the go-ahead for launch. As Ebeling and his entire team at Morton-Thiokol watched the launch, he said to himself, “Lord, make me and all these other engineers wrong, let it go.”
Challenger broke apart 73 seconds into its flight killing all seven members on board.
With what seemed like the entire world watching the launch, in part due to a civilian school teacher being one of the crew’s astronauts, NASA chose to ignore the evidence, rushed to launch, and the result was catastrophic.
Samsung has its own horror story about speed and power. In this case, similar to Boeing, it demonstrated a willingness to do whatever it takes to beat your competitor to market.
Knowing that Apple was set to launch the iPhone 7 in the fall of 2016, Samsung leaders instructed its organization to do whatever it could to bring to market the Galaxy Note 7 before Apple. It also wanted a more creative phone. Analysts were suggesting that Apple was not only outsmarting Samsung, but it was also demonstrating more innovative practices.
Within weeks of the launch, the phones started catching fire. A recall ensued with over 2.5 million phones sent back to Samsung. The company lost billions of dollars in the recall, let alone billions more in lost revenues. What happened? In a rush to get the phone to market before Apple, a design flaw in the battery was overlooked. Safety checks were sub-par. Employees slept under desks to make the stringent deadline. It was an avoidable calamity, one brought on squarely by leaders.
Be it NASA or Samsung or Boeing or the FAA, when our corporate culture—and the behavior of senior leaders—is one that focuses solely on speed and power, the results are often telling.
When a for-profit company (like Boeing) is further incentivized by time-to-market factors, revenue quotas and profitability targets, if the values are ignored, danger is likely imminent.
In the weeks and months ahead—should the investigation confirm that the two crashes are related and it was an MCAS/AOA issue—Boeing will be asked a million different ways why it looked past its values of integrity and safety. It happened at NASA. It happened at Samsung.
The values of an organization are important. But if senior leaders demonstrate they are but words on the wall or images on a corporate website—and not actual behaviors to exhibit daily—what’s the point?
“And we aspire to live these values every day.”