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When Unsolved Problems Lead To Even Bigger Problems
Business experts and management pundits are quick to offer a step-by-step process for identifying the root cause of a business problem and fixing it. The gurus at Harvard Business Review offer these clear steps:
1. Identify the “What” and the “Why” of the problem.
2. Gather evidence. Don’t jump to conclusions.
3. Seek multiple perspectives to eliminate any possibility of confirmation bias.
4. Drill down to the root cause, considering all the possibilities (internal and external).
5. Seek outside advice / mentoring from sources (who don’t have a horse in the race) on how best to solve the problem.
6. Prioritize the issues. Validate if it is the root cause.
7. Lay out a plan of action for fixing the problem.
8. Implement the plan, adjusting as needed based on feedback and unforeseen and unintended issues that crop up.
It sounds like a good approach, and it often reaps positive results. In other words, the problem is identified, clear solutions emerge and once implemented, the problem is solved. That happens often but not always. The more complex the business or the more sophisticated / essential the industry, the harder it is to not only spot the true problem but to also effectuate changes that fix the problem.
Boeing’s Turbulence: A Bumpy Ride
To illustrate how hard it can be to fix a major problem in a high stakes industry, consider the troubles Boeing is experiencing. The Boeing Company is a global company that develops, manufactures and services commercial airplanes, defense products and space systems in more than 150 countries. It was founded in 1916 by William E. Boeing, a timber executive. Boeing, already wealthy from his ownership of various lumber companies in the northwestern U.S., grew fascinated with aircraft after viewing one at the Alaska-Yukon-Pacific Exposition in Seattle in 1909. A year later, he bought a wooden boat building plant right on the Duwamish River, which he transformed into an aircraft manufacturing plant initially known as Aero Products Company. He later changed the company name to the Boeing Airplane Company in 1917.
In the 108 years since its founding, Boeing has a long tradition of aerospace leadership and innovation. The company has continually expanded its product line and services to meet emerging customer needs: creating new, more efficient members of its commercial airplane family; designing, building and integrating military platforms and defense systems; creating advanced technology solutions; and arranging innovative financing and service options for customers. With corporate offices now near Washington, D.C., Boeing employs more than 170,000 people across the US and 65 other countries. They also have hundreds of thousands of additional skilled people working for Boeing suppliers worldwide.
Boeing Takes Off
To understand its problems, one must first understand its origin. Boeing has achieved great things in its 100+ years in business. From inception, William Boeing viewed his company as a visionary presence in the aviation market and welcomed input and ideas from all of his employees. With that pioneering mindset, Boeing’s first source of income came from the U.S. military, building various military planes in the 1920s and 1930s. Boeing also began selling aircraft to deliver mail to far-flung American cities and towns. And, in the late 1920s, Boeing further adjusted its business model to encompass aircraft manufacturing and airline flights. In 1928, Boeing famously said, “We are embarked as pioneers upon a new science and industry in which our problems are so new and unusual that it behooves no one to dismiss any novel idea with the statement that ‘it can’t be done!”
By 1931, Boeing morphed into several smaller airlines and spun it off into a single large airline, known as United Airlines. It also bought up various aircraft manufacturing companies, including Avion and Pratt & Whitney. During World War II, it focused on building military aircraft. After the war, it built commercial planes that could fly cross-country, and then across the ocean, in a single flight. Bolstered by a large order from the U.S. Air Force, Boeing spent abundant time and money on its transatlantic airliner, and by 1958, it finally rolled out the 707 plane, which immediately went into service for Pan American Airlines. The 707 was a huge hit with the public, who were amazed to fly from Manhattan to Los Angeles in a few short hours. As a result, orders for Boeing’s new aircraft line skyrocketed during the 1960s. That led to the production of the 737 and 747. By the end of the 20th century, the Boeing 747 — with 400 seats and bigger and faster engines — became the highest-selling commercial airplane of all time. By the start of the 21st century, Boeing was the biggest name in the air travel game. As Boeing put it, “People want to ride on airplanes more and more each day. We are trustees of a veritable revolution.”
But Boeing had even grander plans. It began building both air- and land-craft for NASA. First came the Lunar Roving Vehicle, widely used on the Apollo space flights in the 1960s and 70s. Boeing also built a Lunar Orbiter, which first traveled around the moon in 1966. Boeing then built the Mariner 10 space probe and the initial Saturn V rockets that Apollo used to fly men to the moon in the late 1960s and 1970s. It also began building vehicles for NASA’s space shuttle mission in the 1970s and continued until NASA shuttered the project in 2011.
The company’s focus was to provide aviation that solved America’s transportation problems. With each innovation, the company grew and flourished. So how is it that the greatest aviation company in the world at the turn of the 21st century is now – just a quarter century later — beset by so many problems that it has been put on notice by the FAA to solve its problems within a year? And how does a complex global behemoth like Boeing, that manufactures products where lives hang in the balance, spot and fix these problems?
Chasing the Competition
To start, Boeing had been trying to keep up with its main rival, Airbus, for decades. But, in December 2010, Airbus released the A320neo family of aircraft. The A320neo, which stands for “new engine option”, was a revamped version of the A320 that featured more fuel-efficient engines and other technological upgrades. The A320neo’s large winglets and new engines helped reduce fuel burn by up to a fifth compared to previous models, making it quieter and cheaper for airlines to operate. The A320neo was a popular choice for airlines and won 667 orders worth $60 billion at the 2011 Paris Air Show.
In response to the A320neo’s success, Boeing pushed to roll out the 737 MAX, the fourth generation of its narrow-body jet, as a cost-efficient way to compete. Boeing chose to use the 737’s existing fuselage and add new engines and other enhancements to create a faster solution. But quality suffered. Current and former Boeing employees said that for years – since its acquisition of archrival McDonnell Douglas in 1997 — it felt as if quality took a back seat to keeping planes moving through its factories. McDonnell Douglas’ entire culture revolved around cost-cutting while upgrading older airplane models at the expense of all-new aircraft. Former and current Boeing employees described worrying practices, including attempts to circumvent quality procedures. One was “inspector shopping,” in which workers would seek out inspectors willing to sign off on work with little pushback.
Then the real trouble began. There were two fatal Max 737 plane crashes in which 346 people were killed in a span of almost five months in 2018 and 2019. The first crash happened in October 2018 when Lion Air Flight 610 crashed 13 minutes after takeoff. Then, in March 2019, Ethiopian Airlines Flight 302 crashed. Three days after the second crash, the United States government grounded all Boeing 737 Max airplanes from March 2019 until December 2020. An investigation found that commercial pressures, flawed design and failed oversight contributed to those devastating tragedies. Not surprising, after the crashes, Airbus gained even more ground, putting even more pressure on Boeing to catch up once again.
Crashes and Covid Collide
Unfortunately, Boeing’s crashes preceded the Covid pandemic. Boeing’s work force went through a major turnover because of the pandemic. The company lost thousands of experienced employees to layoffs, buyouts, retirements and resignations. Even though Boeing slowly replenished its ranks, current and former employees say a lot of institutional knowledge was lost, and its new workers were far less experienced than before. Boeing’s suppliers, facing similar problems, have also had trouble producing parts at the rate that Boeing wanted them.
So Boeing continued to play catch up in 2021-2023. It continued production of its 737 Max 9, which was supposed to be one of the most highly scrutinized planes in the world. But, in January 2024, a door-like panel on a Boeing 737 Max 9 operated by Alaska Airlines blew off just a few minutes after takeoff. Though no one died, it was another incident risking passengers’ lives. After that, Boeing has faced wave after wave of negative publicity.
Then Boeing’s big problems, left unsolved, created even bigger problems. The Federal Aviation Administration increased inspections at the company’s factories. A six-week FAA Audit of Boeing’s 737 Max production documented dozens of lapses in quality-control practices. FAA gave Boeing until late May to address quality-control issues. The Justice Department has also started a criminal investigation of the company.
Boeing’s Core Problems
Let’s start by identifying the core problem. What problems was Boeing facing? There are several major problems: quality control issues, safety concerns, and cultural changes.
- Quality control – The FAA has cited issues with manufacturing, parts handling, and storage. For example, a door plug that flew off a 737 Max 9 appeared to be missing four bolts. Other issues include mis-drilled holes in parts and improperly mounted brackets.
- Safety – An expert review panel found a disconnect between Boeing’s senior management and other employees on safety culture. Some employees have said they don’t believe the company’s systems can ensure open communication and non-retaliation.
- Cultural changes – Some say Boeing has abandoned its commitment to engineering excellence and replaced it with a focus on Return on Net Assets. Others say leadership is more concerned with getting planes out the door than quality.
Other factors that may have contributed to Boeing’s problems include inadequate internal regulation, strained resources, and cost-cutting measures. All these areas of concern boil down to one thing: the company is criticized for putting profits over safety and quality. So, how does a company – a for-profit business that answers to shareholders – deal with problems resulting from efforts to be effective, efficient and profitable?
Next week, we’ll look at what Boeing has done to try to rectify its problems. We’ll examine what has worked, what hasn’t and how a behemoth goes about fixing big challenges. There’s a lot to learn. Stay tuned.
Quote of the Week
“The measure of success is not whether you have a tough problem to deal with, but whether it is the same problem you had last year.” John Foster Dulles
© 2024, Keren Peters-Atkinson. All rights reserved.
