The Boeing CEO, Dennis Muilenburg, is out. Finally.
Did Boeing's board wait to fire him until near the holidays so as to minimize news coverage? Was the timing related to the recent admission that Boeing is suspending Max 737 production next month? Or was it the aborted Starliner mission that provided an excuse to jettison Muilenburg?
As usual, the decision also involved money. Boeing shares were off 20 percent since the second 737 Max crash, in early March 2019. They rebounded on the Muilenburg news.
On the up side, the ouster provides a semblance of accountability. It's tiny consolation for the families and friends of the 346 people who perished in the two 737 Max crashes. Muilenburg, who made $30 million in 2018 as CEO and board chair, leaves with their blood on his hands.
Culture Clash
That Muilenburg's departure comes so long after countless critics demanded it, diminishes his exit. While families and friends of the victims will never forget, for some, a scintilla of healing has occurred. The wounds likely are re-opened now. Worse, the hurt will continue during this otherwise joyous time of year.
The time for Muilenburg to go was months ago, when it became clear he presided over a toxic culture that valued profits above anything else.
There's a maxim in aviation that safety begins at the top. If so, we asked in July, how did Muilenburg still have a job?
That it took so long to show Muilenburg the door is only a small surprise. Boeing adopted a glacial pace on owning its mistakes. After crash one, in 2018, Boeing's crisis response was non-existent. After all, there was no crisis, right? Pilot error was the narrative. After crash two, also far from U.S. soil, the line was clear. Inadequately experienced foreign pilots. Not Boeing's fault. The 737 Max is safe, Boeing and Muilenburg insisted. There was compassion shown, but doled out with an eyedropper; no culpability, though.
Cracks After Crash One
But even after crash one, there were cracks. Something didn't add up. Several pilot unions complained that members were unaware of the new flight control system's intricacies. That system, dubbed MCAS, was the leading crash culprit, critics said. Boeing said little.
Training hours on MCAS were inadequate, several unions added. Never mind that Boeing marketed Max on the inverse promise; the plane was so similar to previous iterations that extensive pilot training was optional. Needless to say, many airlines read "extensive pilot training" as "costing us a lot of money."
Beyond those cracks, our curiosity was heightened when the first crash sparked a communication issue. Pilots claimed Boeing's training manuals were less than adequate on MCAS information. Boeing denied that, too.
A curiosity. In the wake of the first crash, media reports had Boeing dispatching personnel to the world's airlines to brief them on MCAS. If the manuals were useful and pilots needn't train much on MCAS, then why was Boeing spending money to send personnel to brief airlines?
The Facebook Approach
Like Zuckerberg and Sandberg, Muilenburg and Boeing were cornered before admitting guilt. True, social media and air disasters don't mix. It takes months, sometimes longer, to pinpoint the roots of a crash. Social media wants fast answers. Still, the CEO/chair's attitude (deny, deny, deny) sealed Muilenburg's fate. Had the 737 Max eventually been fixed, can you imagine Muilenburg leading the charge? Could the public ever associate trust with Boeing as long as Muilenburg was at the helm?
'Yes, the plane is safe. I've flown on it myself,' Muilenburg would have said during a re-launch ceremony.
'But, Mr. Muilenburg, didn't you insist the plane was safe after the first crash?'
The Irony
Ironically, a revised 737 Max might have been the safest plane in the sky. Similarly, Chipotle could be the most sanitary fast food outlet in town. Approached correctly, crisis can help remake corporate cultures. To do so takes leadership and, of course, admission that something needs fixing.
While it's far too early to know, replacing Muilenburg with board chair David Calhoun doesn't, on the face of it, signal Boeing's desire for transformation. Calhoun's an experienced corporate leader, but he was a board member during the 737 Max's development. He was on the inside. Was Calhoun not privy to Boeing's denial tactics?
Is Calhoun The Right Choice?
In addition, and more important, the culture at Boeing (profits trump safety) is said to be suspect. Calhoun is part of that culture. In October, Calhoun became non-executive chair, when the board removed Muilenburg from the role of chair. It was a slap on the wrist and small compensation for the 346 who died. If there was a moment to replace Muilenberg with an insider it was months ago, when culpability was becoming clear.
In addition, doesn't Calhoun bear responsibility for the tardy removal of Muilenberg? Now he's running the show. And the board, which moved almost not at all, remains. Where's the accountability?
Crisis=Improvement, Sometimes
As we said above, crisis sometimes results in an improved corporate culture. At the same time, replacing a CEO with an insider can spell failure. Exhibit one is Wells Fargo. The bank replaced disgraced CEO John Stumpf with Tim Sloan, president/COO of the bank, in late 2016. Sloan promised to wipe out the troubled bank's bogus credit card scam. He did, but a slew of other misdeeds surfaced; Sloan's line was weak. He's gone now, too. Early retirement. The bank had trouble finding recruits for its top job.
Essentially, culture at the bank barely changed under Sloan. Again, part of the issue was a failure to admit errors. That was a holdover from Stumpf, who insisted initially Wells' culture was strong.
After the credit card scandal surfaced, Wells' radio and TV ads promised to restore the brand's reputation. The ads, though, failed to say why restoration was needed. It's difficult to own your mistakes when you can't even bare to say what they were.
2020 Hopes
Let's hope that the new year finds communicators more successful when they counsel the C-suite and boardrooms. The message should be that one of the worst ways to deal with a crisis is to pretend it doesn't exist. Another is to insist that your brand made no mistakes, particularly when you're in a trust business.
Zuckerberg and Sandberg have survived. In addition, Nike dodged its misogynistic culture with nary a public word courtesy of Colin Kaepernick. Those are the exceptions. Until today, Dennis Muilenburg was an exception, too.
Seth Arenstein is editor of PR News. Follow him: @skarenstein