essays & posts

Boeing – A Microcosm of Our Broken System

Paula Downey, downey youell associates

January 12  ∼ 9 minute read

Attributing individual responsibility to whole system failures like Boeing’s misses the point: our entire economic model is the problem.

Just hours before you and I sat down to celebrate Christmas, the Board of Directors at Boeing unanimously agreed to fire their CEO Dennis Muilenberg in an attempt to pull the company out of its current nose dive. A week earlier, it temporarily shut production of the 737 Max. America’s Federal Aviation Authority (FAA) will be unravelling the detail of its two fatal crashes for years to come but the big picture is clear: Boeing took short cuts and played fast and loose with safety in pursuit of profit.

The decisive and deadly decision was the primary one. Instead of starting from scratch to build a new short haul aircraft to compete with Airbus, Boeing chose the cheaper route and decided to upgrade its existing 737 by adding larger, more efficient engines to the standard chassis. When this caused excessive shift in flight, forcing the nose up and threatening engine-stall, Boeing responded by adding software which would override the pilots and push the nose back down, in the event of an unwanted lift. Unaware of the design flaw and unfamiliar with the compensating software, pilots tried to fly the 737 as they’d always done. The result was catastrophe.

Dennis Muilenburg

The Growth Imperative

Dennis Muilenburg wasn’t a corporate nomad, cruising the market in search of higher stakes and rewards. He was lifer at Boeing and an aeronautical engineer by trade. In theory, he should have known better. But in practice, he’d become a CEO. And he was fired for doing what every CEO operating within the paradigm of mainstream business is required to do: grow their business, build the bottom line and earn their bonus.

In 2018 Dennis Muilenburg took home $20m in bonuses in return for record revenues, record earnings and record margins. The overarching goal he was pursuing is taught on MBAs everywhere and with precious few exceptions, pursued by businesses everywhere: growth. Profit margins, bottom lines, year-end earnings, stock prices, salaries, bonuses. All of it has to grow and keep on growing. And for Boeing, until Lion Air’s Flight 610 plunged into the Java Sea it appeared to be working.

It’s unusual that its CEO was held personally responsible when it all went horribly wrong. Corporate law holds companies to account, but not individuals. And because it’s easy to hide inside the tangled wiring of complex organisations, personal accountability is a rare thing. So on the face of it his fate seems fair. But is it?

Telling Right from Wrong

As a species, sifting right and wrong in search of justice is written into our DNA, bred into our genetic code in a different time when we lived in small groups of two hundred at most, almost all of them near or distant relatives. When you tend the same field, share the bounty of the hunt around the same fire and when your actions have visible consequences, doing unto others as you would have them do unto you is simply common sense.

The move from agrarian communities to more complex social arrangements triggered a flurry of ethical creativity. We now needed formal codes, so we invented them. The Koran, the Torah and the Bible with their common themes of compassion, respect, mutuality, sharing and love, were created by pastoralists confronting new social realities. The ethical mindsets and legal systems that flowed from them focus on the actions and motivations of individuals. People like Dennis Muilenburg.

Unfortunately these codes do not equip us to deal with the world we subsequently created. The world we live in now. The world of gargantuan, complex systems people like Dennis Muilenburg operate within; systems so gargantuan and so complex that they are in every practical, meaningful way, ungovernable. And yet, collectively, we continue to pretend otherwise.

That Dennis Muilenburg was the man in the hot seat when those planes went down is a matter of unfortunate professional timing. But in a complex system, guilt cannot be apportioned so narrowly or precisely. The real culprit is the industrial model we have created, which now has the entire planet in its grip, and for which we have yet to invent appropriate goals, adequate ways of organising, a code of ethics, or effective approaches to jurisprudence.

Attributing individual responsibility to whole system failures like this one is like using a whisk to cut a steak. The wrong tool for the job.

The Illusion of Regulation

When one of these systems fails, as they regularly do, market ideology says: privatise it. Or regulate it. But regulation is an illusion. I speak from personal experience here. When I joined the board of a national regulator my first thought was: this is where I can make a difference. Those five years were hands-down the most powerless I’ve ever felt.

Regulation cannot possibly work because it’s impossible for minimal regulatory resources to oversee large complex systems or even individual institutions. It may shock you to discover that Boeing was certifying its own planes but the FAA has said it would take $1.8 billion and 10,000 new employees for the agency to end its reliance on aircraft manufacturers conducting their own certification tests.

In truth this form of “regulation” is normal. The net result is that under cover of “regulation” almost everything business does goes unregulated. It simply must. In large measure regulation is the business of creating a perfect paper trail of the ultimately trivial. A skilfully managed, perfectly documented waste of time.

Image: Julie Clarke/Pixabay

Large Scale Evil

Proponents of self-regulation claim that it works, that ‘disasters’ like Boeing’s are outlier events. But the evidence to the contrary couldn’t be clearer. The industrial system we’ve created is now in failure mode, having brought an entire planet to its knees in what we now almost casually refer to as the Sixth Mass Extinction of life on Earth. This is shorthand for the catastrophic decline in the biodiversity of the natural world, the collapse of our climate system and the radical and increasing inequality that is the emergent outcome of our economic model of choice. It’s a model which, as I write, has torched five million hectares in Australia – an area larger than Denmark – along with one billion animals. It also forced Russians to bring fake snow to Moscow to ring in the new year.

This model, which served as a platform for the rise and fall of Dennis Muilenburg, is a platform for large-scale evil that is the inevitable outcome of a system pursuing narrow self-interest at the expense of the common good. The logic of undifferentiated growth overrides every good intention as surely as the 737 Max software overrode the attempts of those pilots to keep two planes in the air. And it is leading to whole-system collapse as surely as those airliners ploughed headlong into the earth taking 364 people to their deaths.

I’m pretty sure no one working on the Boeing 737 Max project intentionally colluded in manslaughter. But together that’s precisely what they stand accused of, with Boeing already defending itself against lawsuits by families of passengers killed in the crashes.Yet how different are these people from the folks in Volkswagen? Or Monsanto? Or Union Carbide? Or Shell? Or BP? The rap sheet of serious corporate malfeasance and criminality is simply too extensive to be enumerated here.

And these crimes are not being committed by somebody else, somewhere else. You don’t have to be a sociopath or a profit-monger for your professional life to have deathly impacts. All you need to do is go to work every day to earn a living. Because the collapse we are now witnessing is simply the inevitable consequence of our industrial system, until we consciously and deliberately design it otherwise.

It’s the System Stupid!

Firing Dennis Muilenburg is one response to the call for a clear out at Boeing, not just of its personnel but its culture. Will it work? In short, no. This manoeuvre succeeds in meeting our genetic need for good to triumph over evil and forms the centre-piece of the PR platter known as the Crisis Management Playbook; all part of creating the illusion that all will be well, order is being restored.

But nothing fundamental has changed. Indeed the incoming CEO is leaving his position as a director of Blackstone, the mammoth private equity firm which, as a direct result of the way governments the world over dealt with the financial crisis, is now the largest owner of low-income housing on the planet, and an intrinsic part of the system that has created a global homelessness epidemic.

Business-as-usual rhetoric likes to flaunt the heroics of individual leaders. We do love a hero and saviours make good copy. But in truth, not even Pope Francis could transform the culture at Boeing. The belief that any organisation’s culture is in the gift of one man speaks loudly of our systemic illiteracy – our widespread misunderstanding of what culture is, how complex systems actually work and the systemic role of those in leadership positions.

Our commonplace notions of organisations and organising and the countless routines that flow from them are dangerously outdated and if there’s any hope of transforming the culture of our organisations and our entire industrial system, this is where we must begin.

Image: Arek Socha/Pixabay

Rethinking Organisation

The notion that organisations are top-down hierarchies, isolated machines with parts (like CEOs) that can be swiftly replaced or repaired, and levers that can be pushed, pulled, commanded and controlled according to preset plans and timetables, doggedly persists.

But organisations are not machines, they’re living systems; not separate at all but embedded in larger living systems upon which they absolutely depend; and like all living systems, they’re self-organising, and will never be controlled from above or outside, despite the best attempts.

In the complex self-organising reality of organisational life, leadership does matter but not in conventional ways. Leaders set tone. Create conditions. Open up space and make things possible. But they do not make systems work and they cannot make them change, no matter how much they’re paid because their levers of power are not attached to anything.

The renowned quality pioneer and management thinker W Edwards Deming, whose ideas are credited with Japan’s rise from the ashes of the second World War, devoted his life to the study and improvement of organisations – working well into his nineties – and he concluded that the system as a whole, is primary. Western culture deifies the individual leader but performance, he discovered, is not personal. It’s more than ninety per cent governed by the system itself. The system as a whole. What matters most is how it’s organised. How it works. Why it’s here. And what it’s for.

What’s broken is not individuals or even individual organisations but our entire industrial system. Armed with powerful technologies, flawed mechanistic assumptions, and a blinkered focus on the financial bottom-line, we mobilised a perverse industrial model that has torn asunder the subtle workings of our planet home. Business-as-usual is in dire need of deep change and we’re in the eleventh hour. This is a crunch decade.

Image: Alexas Fotos/Pixabay

Rethinking Leadership

We cannot legislate or regulate our way out of our wicked problems. And we cannot work at the speed and scale now necessary if we remain isolated inside our siloed status quo. Only whole systems can change whole systems.

This work calls for an entirely new way of thinking about leadership and organising and new ways of collaborating that reconnect the pieces of the puzzle.

We must learn together how to restore the systems we broke by redesigning them so the greatest rewards go to those who cultivate life, not compromise it; replenish the seas, not plunder them; renew the soil, not diminish it; strengthen health, not erode it; clean the air, not pollute it; and prioritise precaution and safety, not sacrifice it.

Now and then we observe the world through the lens of living systems and our CultureWork perspective.

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