Boeing heard the warnings. It just didn't listen

The strange thing about Boeing Co.'s crisis is that so many people saw it coming — and tried to stop it.

The planemaker's safety problems have been obvious since two 737 Max jets crashed in late 2018 and early 2019, killing 346 people. Boeing's engineers were warning managers of potential quality problems as far back as 2001. But Boeing executives must not have listened and the 737 Max crashes apparently weren't a sufficiently loud wake-up call.

So far this year, a panel has blown off a Boeing plane in dramatic fashion, both the chairman and chief executive officer said they are stepping down and the company's share price has tumbled 27%. So why haven't those occupying the C-Suite heeded the engineers flagging safety issues? Why did they — according to whistleblowers — silence and ignore those employees? These are the most pressing questions for Boeing's incoming leadership team. Without clear answers, the new executives will be doomed to repeat the mistakes of their predecessors.

Most leaders of manufacturing companies live in fear of being blindsided by a serious safety issue. Perhaps that's why business schools have devoted so much time worrying about how leaders can encourage employees to speak up about problems.

But Boeing's problem isn't one of speaking up. It's one of listening up. That puts the onus squarely on senior leaders. Amy Edmondson, a professor at Harvard Business School and author of Right Kind of Wrong: The Science of Failing Well, says hearing employees requires two things. First, interpersonal skills — "listening to learn, asking follow-up questions, walking down the ladder of inference so that ultimately both members of the conversation have learned something." And second, systems that force those conversations to happen on a regular basis.

Those systems could take a number of forms, says James Detert, a professor at the University of Virginia's Darden School of Business and the author of Choosing Courage: The Everyday Guide to Being Brave at Work. At the extreme end are whistleblower hotlines, anonymous complaint processes and organizational ombudsmen. More routine measures include skip-level meetings and lunch chats with management.

Boeing could also take a page from the playbook of rival Airbus SE and adopt works councils, which are where shop-floor employees meet regularly with senior leaders to ensure safety complaints are heard. At the very least, Boeing should follow my Bloomberg Opinion colleague Beth Kowitt's suggestion and put a union representative on its board.

There's no shortage of ways for senior executives to listen; leaders just need to be proactive about doing it. Sitting back and saying "My door's always open" isn't nearly enough, as Megan Reitz of Oxford University's Saïd Business School, author of Speak Out, Listen Up, has argued.

That's especially important in the face of what Columbia University sociologist Diane Vaughan has called "the normalization of deviance." Vaughan developed her theory by studying the Challenger explosion, in which managers overruled engineers' dire warnings and proceeded with the launch. It's not that the managers were malicious people; they just thought the engineers were being overly cautious. Space launches had happened in chilly weather before, but never as cold as that day in 1986. And there had been problems with the O-rings on previous launches and things had turned out fine.

Such thinking seems to have infected Boeing. Over time, when planes are held together by chewing gum — literally a problem with the botched 787 Dreamliner — but don't fall out of the sky, the organization becomes convinced that chewing gum is a viable option.

Reversing any decades-long erosion in corporate culture requires bold gestures. Executives not only need to listen better, they need to dramatically demonstrate they are doing so. One way to do that — the equivalent of showing up outside your crush's window blaring a boombox — would be to relocate the company's corporate headquarters back closer to its main manufacturing centres in Washington state. This was actually actually proposed by a shareholder earlier this year but shot down by Boeing's board. That's a mistake.

The 2001 decision to move its headquarters from Seattle to Chicago — and then to Arlington, Virginia, in 2022 — has gone down in corporate lore as a disaster. The initial relocation was justified by then-CEO Phil Condit saying it would prevent the "corporate centre" from getting "drawn into day-to-day business operations." But it's clear that's exactly where the corporate centre needs to be.

Another bold move: Make sure the next CEO has a strong engineering background. After decades of hiring accountants to run the company, Boeing's board should know that its problems are not ones of arithmetic.

To be sure, "listen better" isn't the only thing Boeing needs to do. But it's the table stakes that will facilitate the required corporate transformation. The first step is cleaning the wax from the ears of senior leaders.

Sarah Green Carmichael. Sketch: TBS

Sarah Green Carmichael is an editor with Bloomberg Opinion. She was previously managing editor of ideas and commentary at Barron's, and an executive editor at Harvard Business Review, where she hosted the HBR Ideacast.

Disclaimer: This article first appeared on Bloomberg, and is published by a special syndication arrangement.