Anyone who hoped that this January’s Alaska Airlines 737-9 MAX door-plug blowout would mark a watershed in Boeing’s cultural shift from its pre 1997 “safety-first” culture, to the widely reported “shareholder value first” one, may have been disappointed to listen to Boeing CEO Dave Calhoun’s recent testimony to the US Senate
Boeing Commercial Airplane’s woes do seem to have compounded since the Lionair and Ethopian 737-8 MAX fatal crashes of 2018 – incidents that left 346 passengers – the company’s ultimate stakeholders, dead.
These accidents are reported to have cost shareholders (another of Boeing’s stakeholders) around $80Bn.
The Alaska Airlines incident this year is reported to have cost Boeing shareholders around $30Bn in market capitalisation, and the pain hasn’t stopped there. It’s now facing criminal charges.
So much for “shareholder value first”.
This was Bloomberg’s perspective in 2020 (link below):
How Boeing Lost Its Way – Bloomberg
Congress appears to query what has changed, from a substantive perspective, since.
We had an interesting discussion with a news media colleague about just how long it might take Boeing to realign its culture.
Our colleague thought the job could be done in 1-2 years.
We didn’t and don’t agree.
Our best guess was (and is) that it will take at least 5 to 10 years – perhaps even longer; but then ONLY if realism and contrition is exhibited by Boeing’s senior leadership.
It’s going to take tens of thousands of people doing many things differently culturally, operationally, and also from a process perspective – and that takes time, and lots of it.
And that’s after the change consultants and specialists have identified the issues, and then formulated remedial plans that the key stakeholders actually buy-in to.
It has, after all, taken the company from the McDonnell Douglas merger of 1997 to 2024 to entrench itself in a culture that’s actually eroding stakeholder value and confidence at an alarming rate, and the company’s balance sheet reflects that.
It really is time to remember that the ultimate stakeholder is the passenger that boards the aircraft.
When it comes to building and flying aeroplanes, safety is THE cultural and inviolate bedrock.
Everything, including shareholder returns, is downstream from there.
A fuller version of Dave Calhoun’s Senate testimony can be viewed by clicking the link below:
Full Boeing Senate Hearing – ABC 7 News – WJLA
We’ll be following this post with a couple of further ones this week, on corporate culture change, that we hope and trust will resonate with you.
Thoughts, comments and insights below, please.
Barry Eustance CMgr MCMI
The Sixsess Consultancy
Empowering Clients to Seize Opportunity from Change
Aviation & Airline | Change & Transformation | Business | Management
Barry is also a former long-haul airline captain with a 48 year flying career
