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Will Brands Learn from Boeing's Muilenburg Ouster?

Last updated: 12-27-2019

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Will Brands Learn from Boeing's Muilenburg Ouster?

The Boeing CEO, Dennis Muilenburg, is out. Finally.

Did Boeing's board wait until near the holidays to minimize news coverage? Was the time related to the recent admission that Boeing was suspending Max 737 production next month? Or was it the weekend's aborted Starliner mission that provided an excuse to jettison Muilenburg, who made $30 million in 2018?

As we noted in late July, there's a maxim in aviation that safety begins at the top. If so, we asked then, how did Muilenburg still have a job?

On the up side, his ouster provides a semblance of accountability. It's small consolation for the families and friends of the 346 people who perished in the two 737 Max crashes. That Muilenburg's departure comes so long after countless critics demanded it, also diminishes his exit for the survivors. While they will never forget those lives lost, for some, a scintilla of healing has occurred. The wounds likely are re-opened tonight. Worse, the hurt will continue during this otherwise joyous time of year.

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, Boeing's crisis response was non-existent. After all, there was no crisis, right? Pilot error was the story. Crashes far from U.S. soil. Inadequately trained foreign pilots, that's right. Not Boeing's fault. The 737 Max is safe, Boeing and Muilenburg insisted after the first crash, in 2018. There was compassion, yes, but doled out with an eyedropper; no culpability, though.

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.

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 that, our curiosity was heightened when the first crash sparked a communication issue. Pilots claimed Boeing's training manuals were less than adequate when it came to MCAS information. Boeing denied that too.

More 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?

Like Zuckerberg and Sandberg, Muilenburg and Boeing were cornered before admitting guilt. True, air disasters were not made for social media. It takes months, sometimes longer, to pinpoint the roots of a crash. Social media wants fast answers. Still, the CEO's attitude (deny, deny, deny) sealed Muilenburg's fate. Had the 737 Max been fixed in 2020, or later, can you imagine Muilenburg selling the plane? Trusting anything he said?

'Yes, the plane is safe,' he'd have vowed.

'But Mr. Muilenburg, didn't you say the plane was safe after the first crash?'

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. 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 a need for transformation. Calhoun's an experienced corporate leader, but he was a board member during the Max's development. Was he not privy to Boeing's denial tactics? In addition, and more important, the culture at Boeing (profits trump safety) is said to be suspect. Calhoun and the board are part of that culture. The time to replace Muilenberg with an insider was months ago. On the other hand, Wall Street disagrees.

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 gone now, too. Early retirement.

Essentially, the 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.

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.

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