No question at this point that he needed to be replaced. The question is - why didn't the board act sooner?
[1] https://www.economist.com/leaders/2019/12/18/boeings-misplac...
[2] https://www.nytimes.com/2019/12/22/business/boeing-dennis-mu...
It's a bad look, because Boeing is consistently way too late to recognize what is obvious to those of us watching from home.
I continue to be astounded that our most senior leaders will not act in the long-term best interest of the organizations they lead.
It's been 37 years since the Tylenol crisis, where seven people in Chicago died after someone tampered with the pain reliever and contaminated it with potassium cyanide.
Way back then, Johnson & Johnson did far more than they were required to do. They pulled all Tylenol from all store shelves everywhere, and kept it off the market until they completely redesigned the packaging. They took complete responsibility. They over-communicated with regulators and with the public. Their market share plunged from 35% to 8% and they took a huge financial hit.
But what was bad for J&J in the short term was fantastically positive in the long term. Their brand recovered, stronger than ever, and they regained their dominant market share.
But today, leaders across the public and private sectors rarely act with this kind of understanding and foresight. Muilenburg downplayed the catastrophes, blamed the pilots, pressured regulators, tried to find cheap shortcuts to fix the problem, and made promises to suppliers and customers he couldn't keep.
So often what's best in the immediate term is worst for the long term. Why can't today's leaders think a little bigger, and optimize for the long term even if that has an immediate cost?
> Why can't today's leaders think a little bigger, and optimize for the long term even if that has an immediate cost?
I'm not sure it's so simple. At the head of the Boeing bureaucracy, Dennis Muilenberg likely was being fed a diet of wrong and horrible information from lower executives keen on deflecting blame so that they could keep their jobs. He was ineffective because he accepted it and pushed it outward - to the board and the wider public - rather than challenging it and getting to the bottom of the crisis. Internally challenging the members of your organization during a crisis is incredibly politically difficult to pull off and has little to do with short-term vs. long-term perspectives. Of course, someone with his experience and compensation, working at his level, should be able to pull it off. He didn't.
I'm sure in 1982, the Johnson & Johnson CEO was also "being fed a diet of wrong and horrible information from lower executives keen on deflecting blame so that they could keep their jobs".
That's how big organizations work.
But in 1982, J&J leadership could see beyond that, cut through the noise, push back on short-sighted recommendations, and do the right thing for the company in the long term.
My question is why we rarely see "enlightened self-interest" like this today.
From Boeing to Facebook, Wells Fargo to Uber, it's hard to think of companies that do the right thing in difficult situations, even when that would be in the company's own long-term best interest.
This is not necessarily a given. In the Tylenol case an external saboteur was to blame, so little or no internal CYA was necessary. Easy and correct for everyone to just blame it on the saboteur and then do the right thing to fix the problem.
In the Boeing case the culprit was internal, which likely resulted in a tangled web of CYA, leading to a diet of wrong and horrible information.
Not excusing Boeing, they acted wrongly. But it’s clear how and why the odds of bad corporate behavior were much higher in Boeing’s case than in J&J’s case.
If J&J had behaved like Boeing, they would have blamed the saboteur, blamed law enforcement, and blamed retailers while gradually and secretly fixing the packaging problem before regulators could force them to do it.
If Boeing had behaved like J&J, they would have taken immediate responsibility, voluntarily grounded the entire fleet even before all the causes were known, and put passenger safety first.
Do you have a citation for that? I don't doubt it's possible but I've never heard it. As far as I know no major pain medications had tamper resistant seals at that point in history.
I've read a lot about this (being from Chicago myself) and do not believe you're representing it correctly. J&J took responsibility insomuch as they pioneered tamper resistant packaging, but they very clearly blamed a saboteur. The initial allegation was that Tylenol was unsafe. J&J successfully re-spun it, correctly, as an external terrorist poisoning their medication. And, to their credit, they did a great job making future Tylenol very safe.
But the bottom line is that these two incidents are very different. In J&J's case they were not at fault. In Boeing's case they were.
Info taken from https://www.ou.edu/deptcomm/dodjcc/groups/02C2/Johnson%20&%2...
Your job as CEO, or any leader of a large organization civilian or military, is to ferret out when you're being fed loads of BS. It's frustrating because Muilenberg was a engineer and started there as an intern in the 80s, so he at least should have some domain expertise in what the problems were. Perhaps him being a "company man" in this case was a hindrance, or conflicted with the new culture at Boeing that is, apparently, run by MBAs concerned with quarterly profits. In either case, he needed to go as this failure happened on his watch.
I get where you are coming from, but I would reframe it as "Your job as a CEO is to create a culture with integrity and transparency"
It is also pretty clear that a time of crisis is the time that your true corporate culture manifests, it seems that the culture at Boeing is not long on integrity or transparency.
https://www.cbc.ca/news/business/johnson-johnson-baby-powder...
If America stayed home in World War 2, how do you know the Allies wouldn't have won anyway?
Though any speculation we have there is just that - pure speculation.
it's disappointing and frustrating, but not all that surprising, given the decades of eroding honor, responsibility, and governance (both corporate and political) of large companies and their senior managers.
i'm more appalled that we tolerate obviously poor incentive structures that implicitly endorse such behavior.
compensation for senior managers should be better tied to long-term results, and punishments should more easily pierce the corporate veil.
(and whew, glad i covered that tylenol case in my mba program... would not have looked forward to asking for a refund! =)
I think it may be too early to claim this. I think we can only judge these companies' well-being (especially with respect to their recent controversies) on a medium- to long-term scale.
I've banked at Wells Fargo since 2013, and I intend to close my 2 WF accounts and open up new ones at Chase soon. If I could remove my information from Equifax or another credit bureau, I would. By all standards, these companies are "doing just fine" at present. But what about 5 years from now, 15 years from now? The damage to a companies' reputation and the impact it has on consumer decision-making can be slow-moving and hard to notice/quantify.
you're just moving from one crappy, uncaring bank to another (i've banked at both in the past). a credit union or local/regional bank will treat you like a real human rather than a necessary inconvenience: https://www.bankrate.com/banking/reviews/
you don't get good customer service (via phone or otherwise) at a big bank, as they see it as a cost center to be minimized. smaller banks use good service as a differentiator/product enhancement.
but yes, international charges can vary a bit.
They sure look being a 'reliable' and 'competent' gang now.
Most likely some PR firm working for Boeing fed some hints to the the Times.
Boeing then waited until it was released to have a coordinated PR push and put as much blame as possible on Muilenburg.
And the board looks horrible, slow to act, behind the curve, reacting to external pressure instead of leading. So it would not be in the board's interest to do a "coordinated PR push" and fire Muilenburg after the stories were published.
I’m no fan of Boeing but the truth is, betting your entire business requires a much higher burden of proof than journalism does.
This is totally wrong. The New York Times depends on its reputation for accuracy.
Which, to me at least, is a perfectly legitimate thing for a newspaper to do. Yes, they should check facts and vet sources, but their primary responsibility is to do the best they can and get the information out there for the public.
Their record of accuracy has suffered quite a bit in the past few years.
That's not reflecting reality at all. In a big enough company you don't really decide, you do both. Alternatively, you choose all three of the options. There's often no reason to fully go for one thing. This as in a big enough company there's enough resources that someone somewhere else does something else, likely the opposite of some other decision.
Eventually something will fail, or it'll succeed. The things which succeed will hopefully be implemented everywhere.