Did you read the recent story of a Boeing 737 Max whose window and fuselage blew out mid-flight? Thank goodness everyone is safe, unlike last time. The exact cause is unknown as of this writing. But, will you now feel safe flying in a 737 Max after its troubled history? Will you trust the company and the regulators to do what is right, remembering that in 2019, Boeing refused to disclose the MCAS until pushed by pilots, and the FAA refused to ground the 737 Max 8 even after 2 fatal crashes, and after 51 other global aviation agencies had already grounded the aircraft?
Just out of a sense of déjà vu, I revisited 2 excellent histories of how Boeing’s engineering culture was destroyed by the “leaders” from McDonnell-Douglas. One is a Quartz article summarizing the key historical facts at Boeing; another is “Flying Blind”, a detailed dive into the direct decisions made by individuals that took that great culture down. Along the same lines, you should also check out the books “Lights Out”, a brilliant recap of GE’s demise, and “The Man who Broke Capitalism, about Jack Welch, the man who turned GE into “ground zero” for some of the worst leadership ideas that are curently causing outsized harm to our society.
About Boeing culture, one mis-step from the early 2000’s that keeps coming to mind, is how its leaders took engineering for granted in their pursuit of profits. When you begin to slowly starve the goose, and take its production of golden eggs for granted… you may not notice it at first, but you are en route to eventual disaster. From the Quartz article:
Many employees struggled to adjust, or resented what they saw as a changing of the guard, where investors took priority over passengers. “Many of the engineers happened to be the guys who pioneered the 707, and so took the company into the jet age and there was a kind of esprit de corps among them and an integrity of purpose among them,” says Irving. “And they had a collective sense of what the company was meant to do and what its responsibilities were.” Now, a passion for great planes was replaced with “a passion for affordability.” Stonecipher seems to have agreed with this assessment. “When people say I changed the culture of Boeing, that was the intent, so it’s run like a business rather than a great engineering firm,” he told the Chicago Tribune in 2004. “It is a great engineering firm, but people invest in a company because they want to make money.”
Unfortunately there’s a long lag between actions and consequences in such complex systems. It’s not easy to catch a bad actor and prevent/punish their actions in the moment. As a result, they keep getting away with it. Jack Welch died at 84 still spouting the uber-capitalist BS that made him rich and famous. The war criminal Henry Kissinger died recently at 100, in his own bed instead of in the Hague. Many executives use this latency to “pump and dump” their company - i.e. increase the stock price using cost-cutting measures (killing long-term viability); then exit with their golden parachute before the downslide begins. It’s the standard playbook of execs from McKinsey, VC firms, and the like - satirized brilliantly by the Jack Barker character on Silicon Valley.
At Amazon, the idea of staving off decline is embodied in the phrase “Day 1”. As Bezos put it in 2016’s shareholder letter: “Day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always Day 1.*” The last bit is jingoistic, to my mind; a throwaway line for a hyped crowd to get a big round of applause. No great institution is immune from the risk of decline. Bezos probably realized that, because his letter goes on to share some advice on how to avoid that decline. It’s a good list. Perhaps I would add to that list, the lessons from Boeing and GE: in tough times, don’t take the source of your greatness (i.e. people) for granted.