Fixable
Unsolicited Advice: Boeing & how to lead in a crisis
April 1, 2024
[00:00:00] Frances Frei:
Hi everyone. I wanted to jump in before we get started with the episode. To let you know that we recorded this before Boeing fired their CEO. Anne and I fully support that decision, which you'll understand as you listen through. We'll be back at the end with some additional thoughts about this news.
[00:00:22] Anne Morriss:
Hello Frances. Hello, Fixable audience. Welcome back. We are going to do something a little different today. Well, it's, it's not that different. We're still doing our favorite thing, which is giving out advice, but this time no one is asking us for it.
[00:00:38] Frances Frei:
Oh, goodness. Yes. This is what I do all day, every day, and I certainly don't often have a chance to say it, but I always have it in my head.
[00:00:45] Anne Morriss:
Well, you share it with some, some of your most intimate audiences. But, yes, because this is our very own podcast, Frances, no one's going to stop us.
[00:00:55] Frances Frei:
Oh, this really, I hope this segment takes off.
[00:00:57] Anne Morriss:
Yeah. Yeah. Today we are going to be giving unsolicited advice. This is the first time we're doing it on the podcast.
We're gonna keep trying things, and you can expect to see more of this stuff popping up in the feed now and then. Please let us know what you think.
[00:01:12] Frances Frei:
I'm super excited about this. So, what's today's topic?
[00:01:16] Anne Morriss:
Frances, today we're talking about Boeing, which, uh, is a company that's had a rough go of it, as our listeners know.
And, our question is really, what the hell is going on? Why, literally, are the doors coming off planes? What does it mean about this company and, and what can they do to turn things around?
[00:01:37] Frances Frei:
Oh, I have
so many thoughts about this. Uh, you and I say that we like to go towards burning buildings. This is as burning a building as there, as there can be.
And, I think as we explore it, there's gonna be a lot of takeaways for people who want to avoid disasters. So, we think about fire prevention and firefighting. We're in a fire. Let's talk about what could have been done to prevent it for our listeners,
[00:01:59] Anne Morriss:
And, how does this company fight it?
[00:02:00] Frances Frei:
Yeah.
[00:02:01] Anne Morriss:
Going forward.
[00:02:02] Frances Frei:
Two really important things.
[00:02:06] Anne Morriss:
This is Fixable. I'm Anne Morriss. I'm a company builder and leadership coach.
[00:02:09] Frances Frei:
And I'm Frances Frei. I'm a professor at the Harvard Business School, and I'm Anne's wife.
[00:02:14] Anne Morriss:
Most important.
[00:02:15] Frances Frei:
Most importantly.
[00:02:16] Anne Morriss:
On this show, we believe that meaningful change happens fast, anything is fixable, and good solutions are usually just a single brave conversation away.
So, here's what we know. Boeing is currently under heavy scrutiny from everyone, regulators, the media, the flying public, because of multiple high-profile issues with their planes, including multiple deadly crashes, a door coming off a plane, and a wheel falling off and smashing into cars.
[00:03:27] Frances Frei:
It's unbelievable.
I believe just the other day, another Boeing plane landed in Oregon and they discovered that one also had a missing panel.
[00:03:35] Anne Morriss:
That is correct. That was March 15th, the year of our Lord, 2024. Luckily, no one was injured. The missing panel was discovered during a routine post-flight inspection, but my God, this is coming just a few months after a similar issue blew a hole in one of the planes midair.
[00:03:54] Frances Frei:
The doors came off.
[00:03:56] Anne Morriss:
It was January, just minutes after takeoff, the door plug of an Alaska Airlines flight separated from the plane.
[00:04:05] Frances Frei:
So, the entire wall panel came away from the plane midflight.
[00:04:08] Anne Morriss:
That is, that is correct. It left a gaping hole in the body of the plane, forced an emergency landing. By the grace of God, no one was seriously injured in this incident.
There was a, there was a kid who had his shirt ripped off by the force of the decompression. I mean, can you imagine how terrifying this was for everyone on board?
[00:04:30] Frances Frei:
It's awful.
[00:04:32] Anne Morriss:
And, that plane, a 737 MAX was also the plane, if you recall, that had risen to some infamy after two deadly crashes in 2018 and 2019.
[00:04:42] Frances Frei:
Now, I'm just mad. I mean, I'm just mad that they had accidents back then. They have accidents now, and I'm not sure how much learning is occurring, and this must have roots in the culture.
[00:04:54] Anne Morriss:
Yes, there is a good reason for all of those emotions, and there's a lot to be said from an engineering standpoint in regulators, the Federal Aviation Administration, everyone's getting involved.
Congress is getting involved. By the way, this, this, these conversations are also not going well for Boeing. But, what I think we wanna go after is what we consider to be the deeper question, which is how did a company like Boeing get to the point where something like this is even conceivable?
[00:05:26] Frances Frei:
You know, when you say a company like Boeing, the phrase that was so commonly said was, if it's not Boeing, I'm not going.
That's what they were known for.
[00:05:35] Anne Morriss:
Yes. Yeah. I mean this, this is an organization that embodied engineering excellence, process rigor. I mean, they had an almost religious devotion to excellence on the production line. So, I, I wanna get into what happened here and where does, where do leaders of this organization go from this point?
[00:05:56] Frances Frei:
Let's do it.
[00:05:57] Anne Morriss:
All right. So, let me throw out some context here, uh, for listeners not familiar with the company. So, Boeing was founded in Seattle in 1916. You know, this is a storied arc of an organization. They became one of the biggest commercial aircraft producers, as you know, and they had this incredible reputation for engineering excellence.
They merged with a competitor, McDonnell Douglas, in the early nineties, and that coincided with the shift in behavior where it seemed like the company was solving for financial performance instead of quality. They eventually re-headquartered in Chicago and then moved right outside of DC.
[00:06:38] Frances Frei:
Ah, to the engineering metropolis of DC.
[00:06:40] Anne Morriss:
Right.
[00:06:41] Frances Frei:
Where all engineers go.
[00:06:42] Anne Morriss:
Right. I mean, it's a great metaphor. Well, it's a terrible metaphor, but it, this is not what we do in our nation's capital.
[00:06:49] Frances Frei:
No. What we do there is a lobby.
[00:06:51] Anne Morriss:
And, and here we are now, uh, 2024, where the doors are literally coming off the planes. So, Frances, I wanna pause and just start with where is your head, uh, in terms of where do we go from here?
[00:07:07] Frances Frei:
Well, I think we have to figure out why the doors are coming off and then we can change it. And, to me, the only reason that doors will come off is if quality no longer was the number one most important thing, right?
[00:07:20] Anne Morriss:
So, let me create some tension. Lemme try to channel…
[00:07:22] Frances Frei:
Yeah.
[00:07:22] Anne Morriss:
the people who were leading the company over the last decade because a lot of this is super well documented.
[00:07:27] Frances Frei:
Yeah.
[00:07:27] Anne Morriss:
Now, there's been fantastic reporting. There's been congressional hearings. There's now an FAA report that has dropped, and so it's really clear what people were thinking and what they were thinking was, yeah, but now we gotta run a business. So, what is a graceful way to deal with that tension?
[00:07:47] Frances Frei:
I think about it in terms of the objective function and constraints. We're going to maximize an objective function subject to a certain set of constraints. So, it sounds like the history of Boeing was we're gonna maximize quality subject to making sufficient financial, and then it became we're gonna maximize financial subject to sufficient quality.
And, I can tell you in an engineering company, if you don't have quality and improvement of quality as the objective function, you will never achieve it. So, if we got to go back in time, we would feel everywhere the organization was that it was the maximizing of quality. And, so when financials are a manifestation of quality, that's when the engineering companies will thrive.
Anytime, and I don't mean to say this disparagingly, but I get nervous every time a CFO becomes the CEO. If you're gonna optimize on money, you may or may not end up with improvement of quality, but if you're gonna optimize on quality, you will end up with the improvement of financials. And, so which one is primary and which one is manifesting.
And, this to me feels like a classic case of it used to be improvement of quality and then it became financial. And, I don't think there'll be anybody at the company who will say, no, we didn't do it except for, they probably would say we had both. And, I can tell you I have never seen both work, ever.
[00:09:20] Anne Morriss:
And, the irony is that the failure on the engineering side was so profound that they've had five years of deep losses and more expected ahead. Like, the assumption was false.
[00:09:32] Frances Frei:
They gave buyouts to their experienced employees. You don't give buyouts to your experience unless the only thing you care about is the money side of this. So, I think had we gone back and watched the, played the camera and saw them making financial decisions, which were all being made behind closed doors, if those doors were open, then we could have predicted that this was gonna happen.
It's just a matter of time.
[00:09:57] Anne Morriss:
Yeah. So, we're sufficiently worked up. I presume our audience is sufficiently worked up, so let's relieve some tension. How are we gonna fix this?
[00:10:06] Frances Frei:
So, whenever there's a crisis, there's three things you have to do. You have to honor the past. We have to have a clear and compelling change mandate.
And, we need a rigorous and optimistic way forward. It's always what you do in a crisis.
To honor the past, we have to honor the, if it's not Boeing, we're not going. We have to honor the engineering part of the past that's honoring the good part of the past.
[00:10:28] Anne Morriss:
That's what gives me optimism in this case, is that it's in. This company…
[00:10:28] Frances Frei:
And, we have to…
[00:10:33] Anne Morriss:
has such gorgeous roots in having reverence, get reverence for that quality.
[00:10:38] Frances Frei:
So, we have to honor that.
[00:10:39] Anne Morriss:
And can I…
[00:10:40] Frances Frei:
Yeah.
[00:10:40] Anne Morriss:
…Can I just say on this because I know this is a public company. I, we've been in the rooms where the stakes of kind of owning it have felt really high. But, the world has done this for you. You know? Just open any paper.
[00:10:53] Frances Frei:
Any paper.
[00:10:53] Anne Morriss:
You know, the, the mandate for change is clear.
The blame has been assigned. The root cause analysis have been done. You don't have to worry about people finding out things that they don't already know. This has been laid out for the world.
[00:11:08] Frances Frei:
And, so now what do we do? So, we honor the past, the good and the bad. We have the clear and compelling change mandate.
It's on the front page. The doors came off. We use that as a metaphor, and now we need a rigorous and optimistic way forward.
We have to get back to our engineering roots. So, neither the current CEO nor the last CEO was an engineer. Now, I'm not saying you have to be an engineer to have reverence for it, but your job of showing the reverence is that much harder.
So, I know sometimes…
[00:11:38] Anne Morriss:
Yeah
[00:11:38] Frances Frei:
…when it's not a physician running a hospital, you can do it, but you have to care more about the health of the patients than all other physicians.
[00:11:48] Anne Morriss:
Yeah. Yeah.
[00:11:49] Frances Frei:
And, what would I do on day one? I would have a campaign to bring back experienced engineers because we need them and I would honor it and I would apologize.
I mean, I would do all of
the things.
[00:12:04] Anne Morriss:
The phrase we will often say to organizations in, in moments like these are organizations are perfectly designed for the outcomes they get.
[00:12:15] Frances Frei:
This is a predictable outcome from the culture they put in place.
[00:12:17] Anne Morriss:
So, we have to start from that assumption, like we designed for the results that we're getting.
And, so we have to bring design,
[00:12:37] Frances Frei:
Redesign. Yeah.
[00:12:38] Anne Morriss:
Redesign thinking. We have to redesign this organization for different outcomes. And, the senior team responsible, and that's the executive team and the board of directors of this company, has to take radical responsibility…
[00:12:42] Frances Frei:
Responsibility.
[00:12:43] Anne Morriss:
…for this pivot. Now, what does radical responsibility look like right now?
First of all, it's treating this like the emergency that it is for the organization. The status quo is totally unacceptable, and right now it is a show, not tell game. And, so I wanna see some drama. Why aren't factories being taken offline? Why aren't people losing their jobs? Why isn't this whole system being redesigned right now?
[00:13:12] Frances Frei:
And, if it's the, why aren't people losing their jobs? I have to tell you, it's the board and the senior team put engineering at the center of this business because it's the only chance we have to make money. You know, it's indirect, but it's that simple.
And, so the people who I would bring on the board, the senior executives, I mean, if there's 10 people on the board, I would need at least five of them to actually be engineers.
[00:13:38] Anne Morriss:
I think it's a huge part of walking the walk. I mean the, if it's not Boeing, I'm not going, well, how do we plant that flag and what does it look like?
[00:13:46] Frances Frei:
Look, every employee would rally around this. Every customer would rally around this. Here's the thing we know about change. Change can happen in an instant as long as you do it in a 360 degree perspective.
Everyone would rally around this.
[00:14:16] Anne Morriss:
So, Frances, it seems like since we recorded the original episode, we have manifested a personnel change at the top of Boeing. The CEO resigned on March 25th, and the chairman of the board is being swapped out for someone with a real engineering background. So, the question before us now is, where does this company go from here?
[00:14:38] Frances Frei:
First of all, I'm so glad that they've one, swapped out the CEO, 2, brought in an engineer. I mean, it's a central casting engineer, an engineer who has led companies before. I recommend that Boeing not pay any attention to the CEO's resignation letter, which was, “Oh, this was long planned,” like it was just all about them.
It actually showed what was wrong, so I would ignore the resignation letter, but magnificent that they have the moment now to bring reverence back to the engineer.
And, so my further advice is do not talk about the financials for one moment. Talk about the reverence for improvement and quality and safety, and I promise you, as in the long tradition of Boeing, when you get those things right, the financials will follow.
And, the second you put financials in primacy, this stuff may, we just learned, may not follow. So, good news, Boeing, for bringing in an engineer. Next up, please reopen your plants with union workers in Seattle.
[00:15:41] Anne Morriss:
Yeah, I mean, where, where my head is is I, I think they needed this kind of dramatic moment to signal to the world that they had the appetite for a real reset here.
So, I think it's a really encouraging sign. I think it was the right move. I think the question on everybody's mind now will be what happens next? And, how do they keep this momentum for meaningful change, not just the chatter of change for meaningful change to really happen, and I think those next signals are less about the personnel and less about leadership and more about a willingness to go back to the drawing board on process here.
And, I think to your point, it includes what are they doing on the manufacturing line? Who, who is there with them? Where is this happening?
[00:16:25] Frances Frei:
Where is headquarters? Please move it out of DC.
[00:16:28] Anne Morriss:
Now, let me ask you this, Frances, you are a case-based educator. Is there anything that Boeing executives can learn from any other organizations…
[00:16:38] Frances Frei:
Oh, yeah.
[00:16:39] Anne Morriss:
…who have been through this kind of trauma.
[00:16:40] Frances Frei:
So, one of the bestselling cases in the history of the Harvard Business School was on the Toyota Production System, and Toyota had the first world famous production system.
They had good financial performance as a result of having the best production system in the world. And, then the CFO rose a little too high in the company.
And, when the CFO got became the head of the company, it just had a small change, but important, which is there was the privacy of financial performance, hoping that improvement would manifest. And, improvement halted. And, again, I don't mean to, I think CFOs can be great CEOs, but only if they have more reverence for the non-financial thing….
[00:17:25] Anne Morriss:
Right.
[00:17:25] Frances Frei:
…than anyone else in the company.
[00:17:27] Anne Morriss:
And, then how did Toyota bounce back from that pivot?
[00:17:29] Frances Frei:
They switched from the CFO. They went.
[00:17:31] Anne Morriss:
So, in that case it was a personnel change.
[00:17:31] Frances Frei:
They went back to the roots, I even think to the like family of Toyota, like, to the improvement oriented part of it.
[00:17:40] Anne Morriss:
Yeah, and that's the culture change that we now need to see after the personnel change. What happened next?
[00:17:46] Frances Frei:
They got back to better than they were before and have stayed in that story place for decades.
[00:17:51] Anne Morriss:
I love that.
[00:17:52] Frances Frei:
And, so to close, here's what I would say to the Boeing executives. Congratulations.
Don't stop here. The entire employee base is watching. Who are you hiring? Who are you rehiring? Who are you elevating? Where is work getting done? Where are you headquartered? We're watching for all the other decisions you're making, and are they aligned with this absolutely perfect first step.
[00:18:15] Anne Morriss:
And, not just the employees.
The whole world is watching.
[00:18:17] Frances Frei:
Well, indeed, the whole world. The flying public is watching.
[00:18:22] Anne Morriss:
All right everyone. Thank you for listening. If you wanna figure out your own workplace problem with us here at Fixable, send us a message. Email us at [email protected] or call us at 234-fixable. You can even text us at 2343492253.
[00:18:40] Frances Frei:
We'd love to hear from you.
[00:18:44] Anne Morriss:
Fixable is brought to you by the TED Audio Collective. It's hosted by me, Anne Morriss.
[00:18:50] Frances Frei:
And, me Frances Frei.
[00:18:51] Anne Morriss:
This episode was produced by Isabelle Carter from Pushkin Industries. Our team includes Constanza Gallardo, Banban Cheng, Michelle Quint, Corey Hajim, Alejandra Salazar, and Roxanne Hai Lash. This episode was mixed by Louis at Story Yard.
[00:19:07] Frances Frei:
If you're enjoying the show,
make sure to subscribe wherever you get your podcasts and tell a friend to check us out.
[00:19:14] Anne Morriss:
And, one more thing, if you can please take a second to leave us a review, it really helps us make a great show.