Boeing’s 737 Max issues highlighted the company’s sacrifice of safety for financial performance, resulting in a tarnished reputation. The prioritization of profit over core values also damaged the FAA’s credibility and revealed a lack of accountability for top executives. This downfall serves as a reminder of the importance of maintaining core values and prioritizing them over short-term financial gains.
The Downfall of Boeing: A Lesson in Core Values
I recently watched “Downfall: The Case Against Boeing,” a documentary about Boeing’s 737 Max issues, which exposed the company’s sacrifice of safety for financial performance. Over 300 lives were lost due to Boeing’s negligence, as they calculated the odds of fatalities to be small enough to ignore while working on a solution. Even after the Lion Air and Ethiopian crashes, Boeing blamed the pilots and their training, resulting in a tarnished reputation that will take years to rebuild.
Boeing’s shift in focus from its core values of safety and engineering to prioritizing share price and financial performance was a grave mistake. The company went to great lengths to hide the MCAS system from pilots and regulators, avoiding additional certification requirements. The bold spirit of innovation, epitomized by Tex Johnson’s 707 barrel roll in 1955, seemed long gone. This misguided focus led to a drop in Boeing’s share price, while competitor Airbus’ share price experienced a 34% increase.
Boeing’s actions also damaged the FAA’s reputation worldwide, as countries no longer trust the FAA’s judgment. This loss of credibility is a heavy price to pay for prioritizing profit over core values. Companies must remember that profits result from upholding core values and good strategy and systems, and profits should not be the driving force behind the strategy.
The aftermath of the 737 MAX crashes revealed a concerning lack of accountability for top executives. When Dennis Muilenburg resigned as CEO and board director, he received $62.2m in stock and pension awards, highlighting the disparity in consequences for executives compared to others in the company.
In conclusion, Boeing’s downfall serves as a reminder of the importance of maintaining core values and prioritizing safety over short-term financial gains. A company’s reputation and long-term success depend on upholding these values and learning from past mistakes.
(c) Copyright 2022, Marc A. Borrelli
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