As far as signs of trouble at a company go, a hole blowing through the wall of one of its planes at 16,000 feet is not subtle.
So it was no surprise that Boeing CEO Dave Calhoun spent most of the company’s fourth-quarter earnings call Wednesday focusing on safety. “We caused the problem and we understand,” he said of the Jan. 5 incident.
Mr. Calhoun said the company had instituted additional quality controls and halted production for a day to focus on safety and quality. But Boeing’s issues span decades, and some aviation and management experts have long suggested they go deeper than processes, pointing instead to a shift in company culture that puts economics above engineering. The correction that may require more drastic measures.
“What Calhoun and his team need to do requires both a leap of faith in the way they do business and some kind of sustainable, credible courage,” said Nancy Koehn, a historian at Harvard Business School who focuses on crisis leadership.
DealBook asked experts in corporate culture, aviation and management what actions Boeing could take to try to fix its long-standing problems.
Design a whole new plane. The 737 Max, the workhorse of Boeing’s fleet, was introduced in 1968. “They’ve put in new components, but I think they need a completely new aircraft design based on all the lessons they’ve learned about aeronautics over the last 60 years. said Bill George, the former CEO of Medtronic and an executive fellow at Harvard Business School who has written two case studies on Boeing. Mr Calhoun said Boeing would not deliver its next all-new aircraft until the mid-2030s.
Move headquarters back to Seattle, the heart of the company’s engineering operations. Boeing moved its base to Chicago in 2001 and then to nearby Washington in 2022. Mr. George said that was a mistake. “Management needs to get back in touch with the engineers who understand flight safety,” he said. “Boeing’s top management doesn’t have aeronautical engineering degrees, for the most part.”
Open the factory. Ms. Koehn said a historical example that could be instructive for Boeing was what food companies did to address exposure to dire health and working conditions in the meatpacking industry: They staged tours and lobbied for regulation for quality control. “Boeing could say, ‘Come into the factories, come talk to our people. Do it now. Do it in four weeks. Do it in six weeks,” Ms Koehn said. During Wednesday’s earnings conference call, Mr. Calhoun said he had invited Boeing customers to visit the plant. Doing the same for regulators, journalists and consumer groups could go a long way toward restoring trust, Ms. Koehn said.
Organize tech product launch events. Ashley Fulmer, an assistant professor at Georgia State University’s Robinson College of Business who researches the dynamics of trust in organizations, said Boeing should communicate more with all its stakeholders, including the general public. He pointed to the types of large product launch events hosted by tech companies like Apple and Meta as one way to do this. “I think at this point, shooting for any incident is not enough,” he said. “What they need to have is regular demonstration of capability where, for example, they have innovative design to enhance safety and reliability.”
Ask, should Boeing be nationalized? Matt Stoller, director of research at the progressive think tank American Economic Liberties Project and author of the monopolies-focused BIG newsletter, recently made the case that it should, noting that the U.S. government already accounts for much of its revenue and helps sell the its planes abroad.
But Richard Aboulafia, managing director at aerospace consultancy AeroDynamic Advisory, said nationalization would be unlikely. If anything, he said, the administration could impose conditions on Boeing’s management of defense contracts, although there is little precedent for such a move.
“The risk is not bankruptcy. it’s a managerial mistake,” Mr. Abulafia said.
