Competitive Pressure Erodes Aircraft Manufacturer’s Culture of Safety and Quality
9/16/2020 – – A damning Congressional report released yesterday by the House Committee on Transportation and Infrastructure confirmed that skewed priorities led aircraft manufacturer Boeing to rush its 737 MAX into service, leading to fatal crashes in Indonesia and Ethiopia. Summarizing the findings of the 18-month probe, Committee Chair Peter DeFazio (D-OR) stated:
Our report lays out disturbing revelations about how Boeing—under pressure to compete with Airbus and deliver profits for Wall Street—escaped scrutiny from the FAA, withheld critical information from pilots, and ultimately put planes into service that killed 346 innocent people.
Intense performance pressures, as well as improper incentives and rewards, can lead even highly respected companies like Boeing to do bad things. Whenever the end justifies the means, crises are right around the corner. Recent examples of this all-too-common pitfall abound:
Volkswagen engineers installed software in diesel engines to cheat emissions tests at the same time the company was pursuing the audacious goal of beating GM and Toyota to be the top-selling global automotive manufacturer. Facebook ignored clear signs of trouble as it chased exponential growth by connecting more and more people with little regard for the nature of the discourse on its platform. Wells Fargo’s retail bankers opened sham accounts to achieve unrealistic, hour-by-hour sales targets to deliver unsustainable growth.
As discussed in Chapter 3 of The Crisis Preparedness Quotient (“Where Crises Come From”), there is nothing wrong with tackling big projects or setting lofty goals. But a win-at-all-costs strategy inevitably leads to trouble. Boeing’s historic culture of safety and excellence evaporated when managers installed “countdown clocks” throughout company facilities to assure that unrealistic deadlines were met. The Congressional report warned that:
Continuing on the same path it followed with the 737 MAX, where safety was sacrificed to production pressures, exposes the company to potentially repeating those mistakes and to additional reputational damage and financial losses.
Boeing, which is seeking approval for its redesigned 737 MAX to get back in service, did not challenge the Committee’s conclusions. In a statement released yesterday, the company promised to do better:
We have learned many hard lessons as a company from the accidents of Lion Air Flight 610 and Ethiopian Airlines Flight 302, and from the mistakes we have made. As this report recognizes, we have made fundamental changes to our company as a result, and continue to look for ways to improve. Change is always hard and requires daily commitment, but we as a company are dedicated to doing the work.
Companies and organizations can avoid the nightmare of priority-driven crises by embracing and continually reinforcing a clearly articulated purpose and ethical culture. Strong internal checks and balances help, and it’s important to set more qualitative, rather than purely quantitative goals. As the ongoing Boeing case study illustrates, sacrificing quality and safety for short-term growth or profit can kill a lot more than a good reputation.