Dennis Muilenburg’s Moment

CEOs around the world, despite their struggles of the day, wake to the joy that they’re not Boeing CEO Dennis Muilenburg. Muilenburg, a smart, honest, humble, well-regarded engineer, that has been with Boeing for his full 35-year career. He’s been digging Boeing very successfully since assuming the daunting role of following predecessor Jim McNerney’s unparalleled ten-year run as Boeing’s most prosperous CEO ever. Yet he and Boeing are facing intense scrutiny after this week’s grounding from the FAA of the hugely popular 737 Max 8 and Max 9 series planes.

On March 10, an Ethiopian Air Boeing 737 Max crashed killing all 157 people on board only five months after a Lion Air Boeing 737 Max crashed into the Java Sea killing 189 people.  This devastating loss of life on the equipment made by your firm, regardless of the cause or context, is sufficient to put this crisis in a class different from most others CEOs ever confront. However, the cause and context of this tragedy make Muilenburg’s leadership struggles uniquely difficult.

The institution with the human carnage and the suffering of the victim’s families is, of course, the best burden on his shoulders–even if Boeing has done no wrong.  The US authorities ’s diffuse role historically between the FAA’s data collection and the National Transportation Safety Board’s investigations has never been clear.  In cases like this, it was further complicated by conflicting statements from such agencies, their highly respected past leaders, and the White House. A former Boeing official being Acting Secretary of Defense did not help public opinions. The authorities ’s reliance upon Boeing’s unique experience in understating the use of sensors, countless computers, countless lines of code, along with the new MCAS autopilot system complicates things further.

Since Boeing and the US government hesitated decided when analyzing the information, 42 other nations– from China to Canada–acted two weeks earlier, using the identical available satellite tracking of the problematic flight paths of both fallen planes, finding troubling parallels. Whether that was schadenfreude of adversary countries, the resentment of allies to new US jingoistic “America First” proclamations, the lack of trust within the abrogation security treaties and trade alliances, or suspicion over imputed business-government coziness, the US has lost face. Finger-pointing has broken out over the FAA’s advice that added training might not have been needed and now voices are questioning the credentialing of certification of pilots in new technologies.

While US trade unions had been largely supportive of Boeing and the air carriers on safety matters, that unity began to weaken. Reports of pilot complaints regarding the comprehensiveness of these manuals has surfaced.  US air carriers remained supportive of Boeing’s safety record and corporate values but non-US carriers began to rethink their excitement for the 4,500 planes they had on order and whether to demand compensation of for lost revenues from grounded flights.  Meanwhile, unthinkable liability problems have analysts weighing the potential impact of self-insurance versus commercial carrier policy, despite Boeing’s excellent balance sheet.

Over the past 40 years, I have personally studied many brilliantly-handled recoveries from wide-ranging business setbacks, and even tragic losses of life. Jim Burke at Johnson & Johnson; Edward Harness at Proctor & Gamble; Andrew Young and the Atlanta Olympics; Jamie Dimon of JP Morgan; Jimmy Dunne of Sandler O’Neill; Ray Gilmartin of Merck; Dave Neeleman of Jet Blue; Anne Mulcahy of Xerox; Alan Mulally of Ford; Jim Kelly of UPS; Stuart Miller of Lennar; Bob Eckert of Mattel; Tim Sloan of Wells Fargo; Arne Sorenson of Marriott, Mary Barra of GM; to name just a few.

I have also researched the bungled responses Mark Zuckerberg and Sheryl Sandberg at Facebook; Elon Musk of Tesla; Oscar Munuz of United Airlines;  Richard Smith of Equifax; Mickey Arison of Carnival Cruise Lines; Tony Hayward and the BP of the Deepwater Horizon disaster; and Larry Rawls of the Exxon-Valdez disaster.

Those dreadful, but in many ways simpler far situations, speak to what should be on Muilenburg’s daily to-do listing now:

Board Oversight and Partnership — Don’t leave the board in the dark, catching up by reading headlines. Is there an informal expert special committee for brainstorming and backup?

Objective Investigation to Command the Facts — Can we show we’re mastering the facts even as outside experts are sharing information with the media?

Protect Whistleblowers — Don’t shoot messengers if there are those internally who have constructive but critical informal information.

Embrace External Critics & Government Authorities — Recognize the validity of those asking tough questions and stay in constant contact.

Planning for Truthful Public Comment — Be certain of the accuracy of Boeing opinions but don’t be silent if you’re unsure. Just say what is known and what is not, ie: is the software fix enough or how long will the grounding be proper?

Strengthen Media Engagement — Avoid delays and stonewalling and speak with a single unified fast responsive voice.

Fortify Alliances of Shared Fate — Many subcontractors are in trouble, air carriers are worried, and Aribus has parallel interests.

Act Decisively Despite Attorney Handwringing — Public safety and public image must outweigh all short-term commercial impacts, no matter what the lawyers say. A good example is to follow the army, where unexplained failure leads to immediately grounding any similar-series equipment.

Reframe the Situation Showing An Accountable Human Face of Leadership — Do not hide behind bureaucratic procedure or assign bad news to subordinates. Show authentic personal empathy, contrition and atonement when warranted–and avoid being over-lawyered.

My calls to involved parties indicate that Muilenburg is working hard on all these fronts, but it is far simpler for financial analysts, journalists, professors and even other CEOs on the outside to review than it is for management to execute perfectly on all dimensions each hour. I know that Muilenburg, such as McNerney, respected Louis Pasteur’s dictum that “chance favors the mind that is prepared. ” Following that information will serve him well at this time.

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