Comment by panarky | Hacker News Reader

Comment by panarky | Hacker News Reader

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The NYT story in particular was hard-hitting and well sourced. Gotta wonder if these stories influenced the board to act now.

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?

The Tylenol crisis is basically the case study for how to handle a corporate crisis. If you get an MBA without having come across it, you should ask for your money back.

> 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.

No, it's not simple, and it's not easy. Doing the right thing when it involves immediate cost and disruption takes courage.

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.

> 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".

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.

Many argued at the time that J&J was at fault because their packaging wasn't sealed or tamper-evident.

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.

>Many argued at the time that J&J was at fault because their packaging wasn't sealed or tamper-evident.

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...

>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.

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.

Plenty of engineering graduates can’t engineer, and go into management after a couple of years. Likely he fell into that category.

>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.

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.

Johnson & Johnson has known its baby powder caused cancer since the 70s, so what did they do? Focus on marketing it to minorities.

https://www.cbc.ca/news/business/johnson-johnson-baby-powder...

Because today's leaders are judged only on this quarters returns for shareholders. Companies are seen only as investment vehicles for the most part. This is especially true in companies that have large minority stake holders that like to make noise. Leaders like Musk can still declare that they are going to run at a loss for the next few years as they ramp up but he is in a unique position where he controls the majority of the shares. If Musk was not the majority shareholder at Tesla there is a large chance he could have been asked to step down a while ago. Tesla is doing great now but for a while it was very touch and go. Large investment firms want year over year positive growth, they don't care about mission statements or the fact that the company owes pensions to lifelong employees. Its profits over people now.

How do you know the brand wouldn't have recovered from the 27% loss anyway?

How do you make any judgment about historical events when you can't run concurrent A/B tests?

If America stayed home in World War 2, how do you know the Allies wouldn't have won anyway?

The writing was already on the wall in Europe when the US arrived. There is little chance the allies would have lost, just that all of Europe save probably for the UK, would have come under Soviet rule/influence.

They recovered while acting ethically - I think a better thing to ponder is whether the company would have gained more ground without the initial setback from pulling the product.

Though any speculation we have there is just that - pure speculation.

> "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 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! =)

There are many counter-examples though. BP, Volkswagen, Wells Fargo, Equifax, etc. All doing just fine.

> All doing just fine.

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.

> "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."

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/

Frankly, I'm okay with an uncaring bank. I would give more weight to the bank's accessibility (i.e. locations, ATMs, international charge fees, etc) and consistency/quality of service (app usability/downtime, good 1800 customer service).

you really only need one branch somewhere near you to do the very occasional in-bank stuff. mobile apps can be used for deposits and any atm can be used for cash (use non-big-bank atms to withdraw without fee). the atm network for credit unions is comparable to a big bank.

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.

The short-term view is the Normal throughout history, long term view is the rare, basically only when they just built a nation and were really motivated, rather than "inherited" the nation from their ancestors.

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