In March of 2019, two fatal crashes grounded Boeing’s 737 MAX airplane. Almost a year later, Boeing is still struggling to recover from a crisis that has expanded beyond its products to the very governance and culture of the company.
When analyzing the missteps that led Boeing to its present low, it’s important not to overlook the real tragedy: over 300 people lost their lives. But few of us business leaders will ever have the level of human responsibility that a company like Boeing does.
What we do all share is a responsibility to be transparent when our companies falter, as these four important lessons from the Boeing crisis illustrate.
If you don’t control your narrative, someone else will.
All businesses have to coordinate lots of moving parts, but aviation and transportation are especially complex. Despite all the focus on the 737 MAX’s emergency systems, when something goes wrong with an airplane, there’s rarely one single fault. Projects of that size are the end result of thousands upon thousands of decisions filtering down through a huge number of departments and workers.
That’s a tough narrative to tell the general public. But Boeing did such a bad job of explaining itself that the media became the dominant voice. Instead of reading about a company owning up to its mistakes, expressing regret, and explaining its path forward, we read stories about cover-ups, internal memos, ignored whistleblowers, and boardroom in-fighting that sounded like plot twists from a corporate thriller. And while the facts of the 737 MAX tragedy are still being sorted out, once a juicy narrative takes over it can be very difficult to refocus the conversation.
Had Boeing been transparent from the beginning, this story would still be sad and troubling. But it might not be so sensational, and therefore so damaging to the company, its business, and its image.
Secrecy is bad for business.
One reason that CEOs are worried about letting the public peek behind the curtain is they want to keep in-house issues in-house. The less that the public – and the competition – know about how business is done, the more valuable that business and its processes are. Better to squelch any culture problems or top-level disagreements behind closed doors or the brand might suffer.
The glut of high-profile CEO terminations in the last year or so prove just how flawed this thinking is. An out-of-control workplace culture is going to breed unhappy employees with a story to tell. CEOs who try to brush blind spots under the rug eventually get blindsided by them. And even before the 737 MAX tragedies, Boeing had been the subject of rumors about top-level tensions that they did not address or resolve, hurting its public perception.
If you want to put a couple extra locks on the door to your R&D department, fine. But it’s a mistake to treat every single aspect of your business like it’s the Manhattan Project. Once a crisis goes public, it’s just that: public. Your employees and your customers deserve transparent honesty. Your key business relationships, such as bankers, investors, and regulators, will demand it.
By some estimates, Boeing’s mishandling of the 737 MAX is going to cost them $9 billion. On top of that, they’re going to spend years wrangling with litigators, government regulators, airlines, the families of victims, and outraged consumers and investors.
Trust is the new global currency.
Air travel is a tough business to disrupt. Eventually, Boeing will dig itself out of this hole. They’ll keep making and selling airplanes. They’ll be profitable.
But when are people going to start trusting the Boeing brand again?
Is Boeing as attractive today as it once was to the very best engineers, designers, and programmers? Do the best college graduates in those fields have Boeing at the top of their lists, or are they applying at companies Boeing would consider competition?
As Boeing continues to struggle, some pilots are urging airlines not to buy their planes. How much more business is Boeing going to lose if not even its best customers trust their products?
Consumers and employees have never been more conscientious about how they spend their time and money. People want to believe in the companies they work for and shop from. Smart companies know that their end users scrutinize every partnership and will vote with their dollars if they don’t like whom businesses are doing business with.
Transparency starts at the top.
Compounding Boeing’s problems was the instability at the top of the company. Without a strong, transparent CEO facing the cameras and providing clear answers, more questions kept piling up.
Think about how former Starbucks CEO Howard Schultz handled a near-death moment for Starbucks. In 2008, Starbucks was on the ropes, the company had lost its way, and the stock price had cratered to under $10 per share
So Schultz decided to call 10,000 store managers to New Orleans so he could speak to them directly. It was a $30 million cost at a time when Starbucks didn’t have $30 million to spare. Just before going onstage as he was finalizing his notes, an associate asked what he was going to tell them. Schultz responded, “The truth. The real truth, because at this point, I knew we were really in trouble. I knew that we had about seven months if we continued on this track before we would be insolvable.”
On the How I Built This podcast, Schultz went on to say, “I needed to trust our people with the same information I had if I was going to ask them to do the things they needed to do, which meant take every customer interaction so personally, as if this is your store, and make sure that they understand that if we don’t correct this situation, we are not going to be able to feed your familes.”
After being transparent and trusting his team, Schultz said things started to change overnight. Within six months, the trajectory had completely changed, and within a year, the near-death experience was a memory.
Now, imagine if Boeing’s leadership would have had the courage, the trust, and the transparency to “tell the truth, the real truth” from the very beginning. If they did that, instead of being vilified, they’d be writing case studies about them.
And trust and transparency aren’t just crisis-management requirements. They are values that the CEO should be cultivating at every level of the company. The CEO who doesn’t provide open lines of communication to employees on a daily basis is going to struggle that much more when it’s the press, angry customers, or government regulators knocking on the door.
Having a crisis management plan and chain of command in place is a good safeguard. But ultimately, your company’s ability to manage a major crisis depends on you, the CEO. Transparency is just the first step in a long process that you will have to lead personally in order to course correct, rebuild trust with the public, and get back to making BIG happen.
About Mark Moses
Mark Moses is the Founding Partner of CEO Coaching International and the Amazon Bestselling author of Make Big Happen. His firm coaches over 200 of the world’s top high-growth entrepreneurs and CEO’s on how to dramatically grow their revenues and profits, implement the most effective strategies, become better leaders, grow their people, build accountability systems, and elevate their own performance. Mark has won Ernst & Young’s Entrepreneur of the Year award and the Blue Chip Enterprise award for overcoming adversity. His last company ranked #1 Fastest-Growing Company in Los Angeles as well as #10 on the Inc. 500 of fastest growing private companies in the U.S. He has completed 12 full distance Ironman Triathlons including the Hawaii Ironman World Championship 5 times.
About CEO Coaching International
CEO Coaching International works with the world’s top entrepreneurs, CEOs, and companies to dramatically grow their business, develop their people, and elevate their overall performance. Known globally for its success in coaching growth-focused entrepreneurs to meaningful exits, CEO Coaching International has coached more than 500 CEOs and entrepreneurs in more than 25 countries. Every coach at CEO Coaching International is a former CEO or President that has made big happen. The firm’s coaches have led double-digit sales and profit growth in businesses ranging in size from startups to over $1 billion, and many are founders that have led their companies through successful eight and nine figure exits. CEOs and entrepreneurs working with CEO Coaching International for three years or more have experienced an average EBITDA CAGR of 66.4% during their time as a client, more than five times the national average. For more information, please visit: https://www.