As far as signs of trouble at a company go, a hole punching through the wall of one of its planes at 16,000 feet is not subtle.
So it’s no surprise that Boeing Chief Executive Dave Calhoun devoted most of the company’s fourth-quarter earnings conference call Wednesday to safety. “We caused the problem and we understand that,” he said of the Jan. 5 incident.
Mr. Calhoun said the company instituted additional quality controls and suspended production for a day to focus on safety and quality. But Boeing’s problems span decades, and some aviation and management experts have long suggested they go deeper than processes, pointing instead to a shift in the company’s culture that places finance before engineering. A repair that may require more drastic measures.
“What Calhoun and his team have to do requires both a leap of faith in how they go about their business and a kind of viable, credible courage,” said Nancy Koehn, a historian at Harvard Business School who focuses on crisis leadership.
DealBook asked experts in corporate culture, aviation and management what steps Boeing could take to try to resolve its long-standing problems.
Design a completely new plane. The 737 Max, workhorse of the Boeing fleet, was introduced in 1968. “They’ve installed new components, but I think they need a whole new airplane design based on all the lessons learned in aeronautics over the last 60 years,” Bill George said. , former CEO of Medtronic and member of Medtronic management. Harvard Business School which wrote two case studies on Boeing. Mr. Calhoun said that Boeing would not deliver its next all-new plane until the mid-2030s.
Move headquarters to Seattle, the heart of the company’s engineering operations. Boeing moved its base to Chicago in 2001, then near Washington, D.C., in 2022. Mr. George said that was a mistake. “Management needs to reconnect with engineers who understand flight safety,” he said. “Most of Boeing’s executives don’t have degrees in aeronautical engineering.”
Open the factory. Ms. Koehn said one historical example that might be instructive for Boeing was what food manufacturing companies did to deal with the revelation of grotesque sanitation and working conditions in the meatpacking industry: they organized tours and lobbied for regulations to control quality. “Boeing could say, ‘Come to the factories, come talk to our people. Do it now. Do it in four weeks. Do it in six weeks,” Ms. Koehn said. During Wednesday’s earnings conference call, Mr. Calhoun said he had invited Boeing customers to tour the factory. Doing the same for regulators, journalists and consumer groups could go further in restoring trust, Ms. Koehn said.
Host tech-style product launch events. Ashley Fulmer, an assistant professor at Georgia State University’s Robinson College of Business who studies trust dynamics in organizations, said Boeing should communicate more with all its stakeholders, including the general public. She pointed to the types of large product launch events hosted by tech companies like Apple and Meta as one way to do this. “I think at this point, just shooting is not enough to avoid any incident,” she said. “What they need is regular demonstration of their capabilities, for example in innovative design to improve safety and reliability.”
Ask yourself if Boeing should be nationalized? Matt Stoller, research director at the progressive think tank American Economic Liberties Project and author of the monopolies-focused BIG newsletter, recently makes the case that this should be the case, knowing that the US government already represents a large part of its revenue and helps you sell your projects abroad.
But Richard Aboulafia, chief executive of aerospace consultancy AeroDynamic Advisory, said nationalization would be unlikely. Rather, he said, the government could impose conditions on Boeing’s management of defense contracts, although there is little precedent for such a move.
“The risk is not bankruptcy; This is professional misconduct by management,” Mr. Aboulafia said.
