The Boeing 737 MAX Crisis: Is the future certain?

The unforgiving nature of crises and the volatility of business operating environments in the modern era leaves corporations and executives fallible to reputational damaging effect of event of crisis proportion. 

Within a space of nearly 5 years, Boeing has suffered yet another blow to its reputation following another of its 737 MAX model failures.

On Friday, 5 January, a Boeing 737 MAX 9 Flight 1282, operated by Alaska Airlines was reported to have had a cabin panel blown off the plane’s fuselage, leaving a gaping hole in the plane, and depressurising the plane's cabin. Luckily enough, there was no loss of life in this incident - all 174 passengers and 6 crew members landed safely. The incident was shared on social media several times, emphasising the power and Influence of Social Media in Crisis Management.

Already grappling with financial repairs from the incidents involving a Lion Air Flight 610 in October 2018, and another involving an Ethiopian Airline Flight 302 in March 2019, alongside the grounding of the plane model for long periods – the woes brought about on Boeing by 737 MAX could be the very beginning of the crumble of the corporation's competitiveness for decades.  We covered Boeing’s crisis response and approcah to crises, and how it could salvage its reputation outside the quality control, safety concerns, and technical difficulties of the plane model in our previous article Boeing 737 MAX: Navigating Its Future following the fatal incidents in 2018 and 2019.

Crises facilitate for big market share loss for brands and products. Boeing will continue to lose its market to competitors as investigations continue to occur, every now and then. Already, the US Federal Aviation Administration (FAA) has ruled that the 737 MAX operated by any USA airliner or flying into the USA by a foreign operator should be, and must remain grounded. This would look like a ‘sequel’ to an 18 month grounding of the MAX plane model following the catastrophic incidents in 2018 and 2019 - once again offering competitor's confidence to engage market negotiations whilst there is a vacuum forming.

For a model that suffered massive market setbacks soon after its introduction on the market, the Boeing 737 MAX still remains a product of concern following revelations that an inspection of the model by another operator, United Airline, found that the opratator's fleet of the MAX had loose bolts. It is yet to be seen how much confidence airline operators will still have in the MAX model.

Crises not only affects reputation, financial bottom line, and market share - they also disrupt corporations operating environment, business model, and can cost corporations hefty lawsuits, and careers for its executives. For example, following the 737 MAX incident in 2019, Boeing separated the roles of Chairman and CEO, introducing David L Calhoun as non executive chairman while Dennis Muilenburg continued as CEO, and President. Muilenburg was later fired based on his perceived management of the 2018 and 2019 accidents. In addition, Boeing set up funds to pay victims' families and also made payments in related lawsuits.

Organisational reconfigurations are implemented to improve organisational performance and propel it’s competitiveness in an industry. With the recent incident demonstrates that despite management changes, there has not been significant progress at Boeing, as far as the 737 MAX model and quality control is concerned. We are yet to see if there will be any heads rolling off the chopping board. The ramification and how current CEO David L Calhoun handles the prevailing crisis may be the life saver for both Boeing as well as his own career. It is also a litmus test if he is indeed up to the task as a leader conversant in Leadership and Crises Management.

#crisiscommunication #ceo #boeing #crisismanagement #reputationmanagement #737max #crisis #publicrelations #crisis-communication #crisisready #max

Boeing 737 MAX: Navigating its future.

In the period between October 2018 and March 2019, The Boeing Company found its reputation at risk of suffering a crisis following two tragic accidents involving its plane brand – the Boeing 737 MAX.

The two accidents – one involving a Lion Air Flight 610 in October 2018, and another involving an Ethiopian Airline Flight 302 in March 2019 – precisely occurred 5 months apart. Initially, the accidents were attributed to human mistakes on the plane – pointing towards potential error by pilots navigating the birds. In a media interview in April 2019, the Chairman, President, and Chief Executive Officer (CEO) for Boeing, Dennis Muilenburg made it clear that,

‘I can tell you with confidence that we understand our planes, we understand how the design was accomplished, how the certification was accomplished and we remain fully confident in the product that we put in the field.’

Following more information coming out, as well as expert analyses of the two accidents, Boeing started shifting its narrative to accepting that the accidents were resultant of an error on its software system known as the Manoeuvring Characteristics Augmentation System (MCAS), installed on the 737 MAX, as part of the plane’s automated functions.

The 737 MAX became one of the sought after brand by renowned airlines in the world. However, the crashing down of Ethiopian Airline Flight 302 was the last straw for Boeing and several airlines to revisit the brand’s suitability for the market. In the following weeks, airlines across the world grounded the 737 MAX brand. Many others that placed orders of the plane’s brand eventually put their orders on hold - affecting the production line and the corporation’s financial revenue. Crises cost corporations financially much as it affects corporation’s reputation and clients’ emotions. These two accidents left Boeing with a US$1 billion damage to its bottom line, and 346 lives lost – delivering sad news to families of those who died, as well as shocking the world over.

Could it be that the plane was rushed into air to counter the Airbus, and keep Boeing competitive on the market?

Much as the corporate brand may not have suffered significant reputational damage, it can be contended that, at this moment, the world is holding its breath as to how Boeing will navigate around the future of the 737 MAX.

How has and how will Boeing move with the 737 MAX brand crisis? The grounding of the planes and shifting the official statement from the initial positioning showed that Boeing is embracing a more empathetic approach. Boeing further set aside funds to support victims of the two accidents. In July 2019, the Chairman, President and CEO said,

‘..the tragic loss of life in both accidents continue to weigh on all of us at Boeing, and we have the utmost sympathy for the loved ones of those on board.’

Boeing has assured the market that the MCAS is now fixed - and is assuring its customers of the safety of the plane. Regardless, it can be vied that Boeing will have trust issues with the 737 MAX brand. Consumer perception of the brand performance, now, is in bad taste. Once the MAX 737 is back in the skies, passengers will surely be curious to know what plane they have been booked on for their trip. Boeing needs to do a lot more than just assuring the market that the software system is fixed.

An organisational leader's demeanour during crises sets a tone on how the entire organisation responds in crisis moments. Would, having the Boeing CEO, flying intercontinental on the 737 MAX recoup the market and passenger trust in the plane brand (once reintroduced)?

Perhaps Boeing need to psychologically phase out the 737 MAX by upgrading and promoting a brand close to it - just may be that could erase the negative perceptions associated with the MAX 737 brand failure. Could a 737 MAX Plus be an ideal reincarnation?

#ReputationManagement #Boeing #BrandReputation #737MAX