Boeing – a case study in failed stewardship

November 4, 2019

I shuddered reading the report last week of the Boeing CEOs testimony to
Congress. I heard the old, old story. Emails to superiors from a
long-standing employee worried about catastrophic risk. Employee fatigue
under management pressure to override safety priorities without delay.
Executives and the board deaf – or blind- to lives they were endangering by
their relentless pressure on the immediate results.

 

This echoed precisely what Margaret Heffernan describes about period before
the BP Texas City explosion in her book Willful Blindness, which Ong Boon
Hwee and I cite in our new book Entrusted.

 

Yet the Boeing story is in some ways worse. Boeing installed the more
powerful and less reliable new MCAS system, and then persuaded the Federal
Aviation Authority to let it remove mention of the change from the pilot’s
manual.

 

This is a compelling story of a business pursuing immediate results
regardless of human consequences. A business led by a CEO who received a
$23.4m package last year. He tried to defend his salary to Congress by
saying it was determined not by him but the board (of which he was until
this year chairman!).

 

The results-first culture for which Dennis Muilenberg and his board were
responsible has so far cost 346 lives . The cost to Boeing is already
estimated at $8bn.

 

In an email in 2018 to the head of the 737 programme a Boeing employee wrote
‘Our workforce is exhausted. Frankly right now all my internal warning bells
are going off. And for the first time in my life I am sorry to say that I am
hesitant about putting my family on a Boeing airplane.’

 

Yet Muilenberg testified that ‘if we knew then what we know now we would
have grounded right after the first accident’.

 

They did know. They had been warned. They failed to take care of the people
and the assets with whom they had been entrusted. Blinded by short term
pressures and incentives, the executives, and the board which they had
overpowered, failed in their stewardship.

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