Boeing’s Ongoing Corporate Challenges

Boeing’s Solutions Should Extend Well Beyond Process Changes

(Originally appeared in the March 20th, 2024 'Across the Board' digital publication, a Board Director, Board Advisor, C-Level, and Business Leader publication reaching 48,000+ exceptional business leaders in over 70 countries with articles focused on leadership, strategy, and governance topics - sign up here)

Written by guest author Jeffrey Parker, IBDC.D

Boeing, an American multinational aerospace corporation, seems to be making news on a daily basis. The deadly failures of the 737 MAX aircraft were only the tip of the proverbial iceberg, adding now the door blowout, in-flight landing gear wheel departure, 787 Dreamliner incident between Australia and New Zealand, pilot no-confidence articles and a dead whistleblower. Meanwhile, competitor Airbus is gaining market share as numerous airline carriers are put in a “square corner” for lack of aircraft.

Boeing is an American national asset serving the world, and now deserving of correction, but is this the job of a regulatory agency such as the Federal Aviation Administration (FAA) or is it the responsibility of Boeing’s Board?

I’ve never met Mr. Dave Calhoun, Boeing CEO, but he comes from the respected if notorious Jack Welchian GE culture. This isn’t a denigration of that culture, as it has produced some great leaders, but it seems Boeing’s operations combined with mis-prioritization by successive leadership generations indicates a culture that has been derailed.

This culture is what the FAA is up against, and they cannot solve it. They can burden Boeing with the most restrictive and intrusive inspection programs they can come up with and it won’t solve the overriding problem. The problem must be addressed by the Boeing Board, urgently. Culture is often likened to an ocean freighter that’s trying to track on course in a storm: it wants to turn sideways in a flash and once pushed off-course, course correction takes time and a lot of thrust.

In assessing the situation from the Board, Boeing needs to introspectively ask themselves the following questions:

1. What is the connection between all the incidents that have occurred? At the intersection of all that has occurred is clearly Boeing leadership – the C-suite, with Mr. Calhoun at the top.  

2. What has changed in the last 20 years that put Boeing where it now stands? Has their emphasis indeed changed drastically as reported to one of profit-taking vs being a solid partner and leader for the industry, its customers, and the general public? In other words, has Boeing become a company focused on avoiding financial risk at the expense of all else, even Boeing’s culture?  

3. What feedback from employees has been incorporated into decisions by senior leadership? What feedback has been solicited and consumed by senior leadership that has had a positive effect on the operational climate?  

4. What do Boeing employees say about coming to work at Boeing? Do they relish their jobs, are they excited to come to work, and are they proud to wear the Boeing colors?  

5. Finally, how many Boeing employees would lay down on a railroad track for Mr. Calhoun? My guess – C-suite leaders only. 

I won’t pass personal judgement on Mr. Calhoun nor the Board’s decision to put him at the pinnacle of Boeing’s hierarchy. The public can assess for themselves how that decision is working. What I will judge is the commitment by the Board to keep the status quo when all indications are pointing to the need for cultural change, not just procedural fixes. The myopic view that the company can be fixed by a shift in quality control, process development, and a focus on operational safety will only get Boeing to the next crisis. Why? Because Boeing is suffering from a cultural misalignment that is affecting the entire company, and this can only be fixed by a change in the culture that Mr. Calhoun seems unable to address. This is the duty of the Board, and I’m confident that many case studies are already underway at business schools across the country that will not reflect well on the mindset, and possibly the culture, of the Boeing Board itself.

Is your Board actively focused on the health of your organization’s culture?

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About the Guest Author: Jeffrey Parker is an experienced Board Director, CEO, and multi-company Founder with over 25 years of Board and Board-level experience across the private & public sectors, specifically in private and public Aerospace, Defense, Technology and Manufacturing industries. At the Board level, highlights include Chairing multiple Private and Private Equity-founded Boards and working closely with Public Executives and Board Members. He’s served effectively on the Strategy Committee, Finance Committee, Compensation Committee, Executive Committee & Governance Committee and is practiced in difficult decisions for the good of all stakeholders. He is currently the Executive Chairman of Arotech Corporation and CEO & Chairman of Defense Business Strategies with primary responsibilities including the overall strategy and governance of these organizations, as well as the relationship manager between the Private Equity owners and the Arotech Executive Leadership Team. He has succeeded at founding, growing and selling into the public realm, and innovating a $6.4B industry. He is a 1988 Graduate of the US Air Force Academy, has flown as an Adversary fighter pilot against the Nation’s best including 13 TopGun classes, attended the Harvard Business School Owner’s and President’s course, earned an International Board Director Competency Designation (IBDC.D) certification and is an active member of the National Association of Corporate Directors. Connect with Jeffrey Parker on LinkedIn.

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