Learnings From The Boeing 737 MAX Disaster
I just finished reading the Congressional Final Committee Report of the Boeing 737 MAX and it’s quite a story (I marked it up for you to read.) It contains many lessons in leadership, so let me offer some thoughts.
First, for many decades Boeing has been an engineering icon. When I graduated from Cornell in 1978 as a mechanical engineer Boeing was a company everyone wanted to work for. I got a job offer to work there and visited – it was an incredible place.
As the report describes well, Boeing was founded with an engineer’s culture. William Boeing was a stickler for detail and from the company’s start in 1916 it was a pioneer in aviation, engineering, and safety. Many of us remember the Boeing 707 (the first well known commercial plane), and it iconified quality, safety, and elegance. In fact I believe it was Boeing who really marshalled the era of low-cost commercial aviation. (Even the movie 2001 a Space Odyssey has references to Boeing in its fantasies about space flight).
Second, it’s clear from the history that this culture went through a shift.
After many successful years of growth, in 1997 the company merged with McDonnell Douglas and then moved its headquarters to Chicago. As the report describes in the narrative, the culture shifted from that of “engineering” to that of “profit.” And that’s where the problem started. Consider the quote below, taken from the report.
On the topic of profits, there has been a lot of discussion about how Milton Friedman’s manifesto that “the goal of business is profit” has gone out of favor. Last weekend the NY Times just published a fascinating history of Friedman’s manifesto and explains in detail why companies have to think much more broadly.
In this case, it appears the company became single-mindedly focus on financials. And this, of course, came in conflict with safety and engineering.
My belief is that profit is the outcome of a great business, not the goal. Companies that focus on solving customer problems in the most innovative way almost always generate a profit. Companies that focus primarily on profit tend to go astray. The fascinating book “Lights Out” describes how GE chased profit for too long, resulting in that company’s crisis today.
As the Boeing investigative report describes, a lot of things went wrong. The problem started with innovation: Airbus developed a more fuel-efficient mid-sized plane than the 737 (the A320neo – “new engine option”), and American Airlines, Southwest, and others told Boeing they were about to go elsewhere. This, apparently, sent Boeing executives into shock.
As the story goes, Boeing hesitated to make a move. The new, more efficient engines are bigger and heavier so it would require either a new airplane or a major redesign to retrofit the 737. After learning that the company could lose American Airlines, the leadership team decided to “re-engine” the plane – and that became the 737 MAX.
According to the report, this new 737 needed larger, heavier engines (larger fans are more efficient) and they would not clear the ground, so the re-engineering included raising the landing gear, extending the wingtips, and a few other small engineering changes to keep the plane stable. And some versions were also longer – all of which changes the aerodynamics.
One of the aerodynamic effects was that the plane had a tendency to “pitch up” in certain conditions, a situation that can cause a stall (the plane stops flying). So to rectify this new aerodynamic effect, the engineers designed a system called MCAS (Maneuvering Characteristics Augmentation System) to push the plane’s nose down if high angle of attack were to occur. And the MCAS itself needed a fault-tolerant design, series of warning lights in the cockpit, and training for pilots to learn to use.
According to the report, there was a lot of debate about whether MCAS was a major upgrade that required major retraining and engineering in itself. MCAS is apparently a significant new system, and it has single points of failure itself.
As the narrative describes in detail, the Boeing engineers debated whether to position MCAS as a significant new system. After much discussion, it was positioned as a “feature” of the plane which would not require significant training. (Test pilots and engineers argued that it did demand significant training.) So airlines got the new system and many pilots did not know precisely how it works, how to troubleshoot it, or the possible risk it introduced.
In a particularly interesting section of the findings, the head of engineering for MAX states that he was not aware of these issues because “the engineers on the program did not work for him.” Organizationally they reported to Engineering, not the project owner. He assumed that someone else was dealing with these issues. (Sound familiar to those of you looking at agile organization models?)
As you can read, these problems continued and the company went through a variety of gyrations with the FAA to get this system approved. MCAS, of course, is the system that forced the crash of the Lion Air and Ethiopian Air planes, resulting in the death of 350+ people. As you will read about in the report all these decisions to “rush” or “ignore” these issues resulted in an unsafe, unstable plane.
In addition to these engineering, safety, and communication issues, the report also finds that “pushing production speed” created a further departure from Boeing’s engineering culture. People were tired, contractors were pushed to produce parts and software at speed, and one of the senior manufacturing engineers wrote letters to the Board that the company was not operating with a quality and safety culture.
The FAA, which tried to manage this entire process, was also somewhat at fault. Thanks to Boeing’s hundred year experience in safety and engineering, the FAA delegated many safety decisions to Boeing engineers, which of course enabled the company to sacrifice safety and engineering for speed.
The bottom line: a slow but steady drift from a culture of engineering, safety, and value resulted in a disaster that may hurt the company for years.
Applying The Lessons
Let me summarize three important lessons for us all.
1/ Product excellence, safety, and engineering must take precedence over profit.
Businesses are here to solve problems first, make money second. When a company drifts from that thinking, problems often occur. I call this the “slippery slope” of chasing profits.
Consider, for example, what’s going on in the Pharmaceutical industry today. Five of the world’s largest pharma companies are working heavily on the Coronavirus vaccine. And the Trump Administration is pushing them to get something out by the end of October. If they were to bow to this pressure, their brand could be permanently damaged.
This slippery slope happens to many companies as they grow – this is why it’s important to regularly revisit your mission. Google, Facebook, and Amazon, for example, are all under anti-trust investigation for doing things people now consider anti-competitive. Why? A constant need to generate more and more profit, all in an effort to keep stock price high.
2/ Employee Voice is sacrosanct.
The second lesson is to listen to employees.
Employees are the “most committed” stakeholders in your company. Shareholders can sell their stock, and customers can buy a new product. But employees have committed their lives, careers, and families to your company. So listen to them!
Some leaders have an old-fashioned management idea that “grumpy employees are a pain” – but actually the opposite is true. Every bit of noise, complaint, or suggestion by an employee should be considered one of the most valuable pieces of information you have. They know what’s going on with your customers and products – and the closer you are to them, the better your company will be.
As you read the Boeing report you see dozens of quotes from passionate employees who spoke up and politely expressed concern. Somehow leadership did not hear these voices, probably making decisions focused on financial results.
3/ Culture starts at the top.
As you read the testimony, it’s clear the Boeing executives are good business people and sound engineers. But it’s also clear that over some period of years as Boeing moved to Chicago and pushed its financial results, it started to focus on profit, production, and market share – which in turn filters down to thousands of decisions in the product. Read the section on “countdown clocks” and it will send shivers down your spine.
You, as a leader, have the opportunity to drive culture every day.
When you ask questions about quality, safety, and employee concerns you send a message that these things matter. If you spend all your time worried about revenue and profit, you will create a culture of shortcuts.
Let’s use the Boeing story as an important lesson on the role of culture, leadership, and listening to success. I encourage you to read this report, it’s one of the most thorough and important Congressional studies I’ve seen.