Dorothy Crenshaw May 15, 2019 | 12:07:12

Why Boeing’s Reputation Radar Failed

Boeing’s PR crisis deepened this week as a fuller picture emerged of its handling of serious problems surrounding the 737 Max. With the release of audio from a tense November 2018 meeting between the American Airlines pilots’ union and Boeing executives – after the Lion Air crash but before the Ethiopian Airlines accident – the scope of the company’s miscalculation is apparent. The narrative has moved from tragedy to scandal.

It didn’t have to be this way. And, sure, it’s easy to second-guess Boeing’s decisions, especially in the aftermath of the first accident last October.

In hindsight, it should have grounded the 737 Max until any and all problems were explored and fixed. Instead, Boeing CEO Dennis Muilenberg resisted action to curb use of the aircraft, insisting that the problem could be corrected by a software fix and better pilot training. Even weeks after the second fatal accident, as other countries grounded the 737 Max and global attention focused on a possible connection between the crashes, it defended the inherent safety of its aircraft.

A narrow framing for a crisis

I tend to agree with Harvard Business School professor Sandra Sucher, who describes the ill-advised way Muilenberg framed the situation after the second accident. Faced with two fatal crashes only five months apart  – a highly unusual occurrence and one that raised huge red flags – he viewed the situation very narrowly. In his mind it was that pesky software flaw that could be fixed and handled with pilot education. That was his story, and he was sticking to it, both in public statements and in discussions with regulators and pilot groups.

Boeing clung to that view even after the aircraft was grounded, even after two major U.S. carriers canceled flights through August of this year. As lawsuits piled up, it rejected calls for a larger investigation. Professor Sucher argues that, had Muilenberg framed the accidents more broadly by acknowledging uncertainty and pledging to investigate a possible connection between the two crashes, he might have limited the damage to Boeing’s reputation. She contrasts his decision-making to legendary Johnson & Johnson CEO James Burke’s framing of the Tylenol tampering. For Burke, the fatal product tampering wasn’t an assault on the company or a supply chain issue; rather, it was a public health emergency. All subsequent actions flowed from that broad framing of the deadly event.

Of course, an executive’s framing of a situation is naturally colored by his own interests, and those of the organization. It’s not unusual that Boeing CEO Muilenberg viewed his crisis in the context of his short-term responsibility to employees and shareholders. One could argue that a leader in his position is conditioned to frame the accidents as he did, given Boeing’s prior safety record, its business clout, and its relatively cozy relationship with regulators. Why expand the problem if it’s not necessary?

A B2B company’s faulty radar

Yet industries where large numbers of operator and/or customer lives are at risk, like the automotive, aircraft and pharma categories, to name a few – should strive for the broadest possible framing when it comes to safety matters. And I believe one key to Boeing’s missteps, and a factor behind Muilenberg’s myopic framing of the situation, was its history as a B2B company. Had Muilenberg and his communications team been more accustomed to handling consumer pushback, more sensitive to the impact of anonymous (pilot) comments in news reports and to the social media furor, it might have framed its situation differently.

In some ways it’s analogous to the 2017 data privacy scandal experienced by Equifax. Equifax was slow, even clumsy, in responding to the scope of the breach and the impact on those affected, in part because it lacked those early-warning systems that signal a major public backlash. A consumer-products company, on the other hand, typically has a fine-tuned sense for a reputation threat. A B2C chief communications officer will function both as a mouthpiece for the company and an ear to the ground. When the social media chatter takes a turn, or the same rumor comes up in journalist inquiries, the PR media will consider a course-correction. It’s in the DNA.

Today’s news ratchets up the pressure on Boeing. It seems that the 737 Max had greater problems than previously known, and that at least some pilots were unhappy with the situation. Any early-warning system that could have helped safeguard Boeing’s reputation and guide its public response failed, or maybe it was on auto-pilot, thinking it could frame even a fatal air crash as a one-in-a-million catastrophe. There was no “reputation radar” here, and for Boeing, the brand damage will be worse because of it.

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