Boeing was already buried in bad publicity after two of their new 737-MAX airplanes crashed in a six-month span, killing 346 people. The tragedies were exacerbated by the revelation that Boeing dodged Federal Aviation Administration requirements in their rush to get the new planes into service.
When Covid-19 devastated the airline industry, the financial impact of Boeing's mistake became more severe--customers canceled 150 orders of 737-MAX jets in March, the most cancellations Boeing has experienced in decades. There's reason to suspect there are more to come.
Boeing made a bad values decision by rushing the 737-MAX to market and covering up their knowledge of the risks involved. The company failed to notify partners and pilots of significant design changes, all in the name of getting the product to market faster. Now, this error has grown into a crushing problem for the company as customers reject both the plane and the company.
Small values decisions can become existential
Boeing surely didn't expect their decisions during the 737-MAX development to become lethal, organization-altering mistakes. They made the same choice many people and organizations make--take a short-cut to speed things up and assume nobody will ever be affected.
The reality is small choices can turn into definitive moments in our lives or careers--both positive and negative. Here's where the Sunday paper test is a great guide: if your private decision ended up on the cover of the Sunday morning newspaper, would you be able to stand by it?
This is why core values are vital to decision-making. If you have clearly defined core values--both for yourself and your organization--you don't need to wonder if your decision is justifiable. Boeing's choice wasn't rooted in values, it was based on efficiency and speed, and the consequences are tremendous.
Trust collapses quickly
All business relationships are built on trust. Brands spend years building credibility with their partners and customers, but it only takes one breach of that trust to damage those relationships for years, if not permanently.
By selling an airplane they knew had potential flaws--and continuing to sell and operate the 737-MAX for months after the first fatal accident--Boeing put their airline partners at risk. In this case, they burned bridges with two stakeholders: airline customers were afraid to fly on the plane and airlines were forced to cancel thousands of flights when the 737-MAX was abruptly grounded.
Though Boeing was able to sell 737-MAX planes after the accidents, that was purely to meet airline's rising demand. Now that travel is temporarily halted, the gloves are off and customers have no interest in helping Boeing manage with the Covid-19 fallout.
Boeing entered the crisis with a trust deficit and as a result customers felt little remorse in cancelling their orders to protect their own businesses.
Business leaders must remember that trust is neither permanent nor guaranteed. One poorly considered decision can shatter a years-long professional partnership and lead to a rash of unintended consequences.
Values can't be negotiable
Business outcomes are the result of many decisions at all levels of the organization. It can be difficult for companies to ensure that everyone--from entry-level employees to the executives--makes decisions that serve the company's best interests in the long-term.
The best way to safeguard against damaging decisions is to establish clear, consistent core values that employees use to make key decisions across the organization. Values are the way people in your company behave day in and day out., they are not what you write on the wall. It's crucial to remember that core values are far more important to how they direct operations within the business, rather than what they present to the public.
The first three values Boeing features in their branding are Integrity, Quality and Safety--it's entirely clear that those values were ignored during the 737-MAX debacle.
Boeing's careless approach to designing the 737-MAX, in contrast to their values, was exemplified in a leaked email from a Boeing employee: "This airplane is designed by clowns, who are in turn supervised by monkeys."
Boeing also has a value of Trust & Respect, touting a transparent culture. Knowing this, it's especially hypocritical that Boeing silenced multiple whistleblowers who knew the 737-MAX project was being gravely mishandled.
During the Covid-19 crisis--where credibility, trust and cashflow have never been more crucial--the airplane manufacturer has lost all three due to one terrible choice. The massive number of returns leaves Boeing in a grave financial and trust deficit from which it will take years to recover.