The purpose of an organisation can hugely impact the way it behaves. Listen to hear how a monetary focus made Boeing responsible for the deaths of hundreds of people.
This week on Anecdotally Speaking, Mark has a story from the aircraft industry, which one of our partners shared in our last monthly partner meeting. Shawn rated this story an 8/10, while Mark gave it a 9/10. We hope you also find it useful!
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For your story bank
Tags: money, purpose, safety, transparency
This story starts at 01:23
Boeing has a long history of safety innovation and of being engineering-led. Things changed when, in 1997, the company merged with McDonnell Douglas.
Boeing’s purpose became creating value on Wall Street, and market forces started to lead decision-making. The company even introduced a program requiring everyone in Boeing to think about its share price. Engineering meetings commenced with a discussion about it.
Companywide, the focus was on cost-cutting and output. There were numerous redundancies and a decreased influence of the quality-control function.
Boeing was competing with Airbus, and in the mid-2000s, Airbus’ sales overtook Boeing’s. Airbus’ sales impacted Boeing’s share price, but it was still doing well.
Then, in 2009, Boeing announced that they would respond to the needs of the airline industry for fuel efficiency by creating a new variant of the 737, the 737 Max. The 737 Max would be bigger and more powerful and have more fuel-efficient engines. Further, there was no significant difference between the 737 Max and other 737 variants, so they went to market saying the aircraft wouldn’t require any new pilot training.
The Boeing share price took off. The company sold some 5,000 737 Max planes, which it introduced in 2016.
Everything was fine until October 2018, when a 737 Max crashed shortly after takeoff from Jakarta, killing 189 people. Pilot error was suspected, but a new system had been installed in the plane and caused the crash.
Boeing hadn’t told anyone about the system. The pilots weren’t aware of its installation. Authorities recovered the plane’s black box a few weeks later, and all was revealed.
Boeing came under great scrutiny. They sent a memo to pilots telling them what to do if the system, which took over the aircraft, was activated.
Five months later, another 737 Max crashed. The pilots did what Boeing had told them to do.
As an investigation was underway, Boeing continued to try to hide the new system, a significant variation on the 737 requiring pilot training. But requiring pilot training would compromise their market strategy.
Boeing was charged with criminal intent to defraud and paid over $2.5 billion in compensation and fines to avoid criminal prosecution. And their share price plummeted.
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Anecdote International is a global training and consulting company, specialising in utilising storytelling to bring humanity back to the workforce. Anecdote is now unique in having a global network of over 60 partners in 28 countries, with their learning programs translated into 11 languages, and customers who incorporate these programs into their leadership and sales enablement activities.