Coming Off Paris Air Show High, Here’s What Boeing Must Do to Get the 737 MAX (and Its Business) Back in the Air
Talk about turbulence.
saw a stunning moment of redemption at last week's Paris Air Show; then returned home to FAA reports of yet another potential flaw in the 737 MAX's software. But beyond fixes to the plane itself, the company's larger issue may be much more basic: Nick Hennen.
This media relations advisor from Richland, Washington travels frequently—twice a month over the last year. The big question is whether he'd ever again climb into a MAX. "I’m beyond convincing," he said. "It’s too hard to put trust in something that failed twice in fatal accidents. I don’t see myself ever feeling comfortable flying in a MAX."
It's a trust thing, and if enough passengers don't have it, nothing else ultimately matters.
Investors have felt the hit. After the Lion Air crash in late October 2018, shares dropped from $369.44 on Nov. 5 to $304.55 by Dec. 17. Confidence did return and the stock climbed to reach a closing high of $440.62 on March 1, 2019. The second crash, of an Ethiopian Airlines flight a few days later, sent things into a nose dive to $341.61 on May 27. Again, the stock began to rise and reached $371.84 when the company announced a large sale of the 737 MAX at the Paris Air Show last week, as Fortune previously reported. Then came the FAA finding of the new software problem and Boeing's stock is back to $365.65 by noon on Friday: enough ups and downs for an acrobatic air show.
Fortune spoke with experts from different fields to see what Boeing must do to navigate the turbulence.
Take the necessary time
A potential source of trouble in developing the 737 MAX was a rush to beat competitive pressure from Airbus, as the New York Times has reported. Now there's pressure to fix whatever is wrong. To rectify all issues, Boeing should take the time to regain control over it's processes, thinks Sridhar Tayur, a professor of operations management at Carnegie Mellon University's Tepper School of Business.
"Beoing needs to go back and make sure its processes, quality controls, and feedback from people are working, that it's not another management slipup," Tayur said. "If you're in a rush to get things done, they're not thinking about how things will go wrong."
Realize it’s a technology company
Aerospace makes heavy use of technology, but it's seen as a useful tool when it's become something more.
"We don't typically think of Boeing as a technology company, but they need to take their dependence on technology a lot more seriously now than ever before," said Josh Swartz, a principal at global management consulting firm A.T. Kearney. "This means that they very likely need to invest a lot more heavily in their technology—tools and people—than they historically have. They typically view technology as a cost center rather than a profit & loss (P&L), which is sort of like how we treat accounting or legal, not strategic to the business."
Change the design approach to embrace human operators
Automated systems have been common in planes for decades. But many observers think that balance has swung too far towards automation and being a technology company doesn't eliminate the human factor. If anything, attention to how people use equipment and software becomes even more important.
"Aircraft manufacturers need to stop treating humans as nothing more than sources of error," said Cecilia Aragon, director of the Human-Centered Data Science Lab at the University of Washington and holder of a commercial pilot license for 30 years. "Years of research have demonstrated that the cockpit is safest and most efficient when considered as a socio-technical system with both pilots and automation contributing, each according to their individual strengths, to the safe operation of the airplane. Whenever automated systems have attempted to remove the human from the loop, accidents eventually occur."
Aragon suggests that Boeing and others in "safety-critical environments" hire user more experience specialists who understand the interactions between humans and machines.
Get pilots involved
The story consumers are hearing is a combination of "Boing reporting to us and rumors and speculation," said Thomas Cooke, distinguished teaching professor of business law at Georgetown University's McDonough School of Business. For example, there were "rumors" about wing problems.
"That's a problem with the lack of transparency," Cooke said. "We have become over the years very dependent on the airlines policing themselves. It's incumbent on Boeing, the FAA, and the airline to assemble a team with a broad group of pilots. I think the American consumers have more confidence in what the pilots say than Boeing."
Spotlight regular employees
The usual advice about crisis communications has run out of steam. "They’ve gone through all the usual suspects public relations and credibility building tools," said Scott Sobel, senior vice president in the crisis and litigation communications group of PR firm kglobal. They also face "legal and liability issues … so they can't shoot from the hip."
Sobol says Boeing executives need to get other people out front. "And people who are more credible if you will because they are not top executives in the organization," Sobel said. "There's a perception that someone turning wrenches is going to speak more honestly than someone sitting in a corner office." He suggests a "multi-level media campaign" that could include commercials, pages taken out in large influential newspapers, and "social media interviews with these folks to talk about their commitment to integrity, safety and trust."
It's a bumpy path, but perhaps the only way to get the company back to smoother skies.
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