There is nothing worse for the leadership of a business than finding out one of your products may be responsible for someone’s death. For Boeing, multiply that by 346, the number of lives lost in two recent crashes involving the company’s 737 MAX 8 passenger airplane, and you’ve got a major crisis that could shake any company to its core. Except it didn’t seem to at Boeing.
Following the crash of Lion Air flight 610 in October 2018, questions quickly arose about a new safety system Boeing had developed for the 737 MAX and whether pilots were adequately trained on the system’s operation. Instead of immediately pledging to investigate potential problems, Boeing quickly went on the defensive, maintaining the system was “certified,” and questioned the training of the pilots involved. Critics, many of them pilots, were outraged. But the buzz died down and Boeing continued taking orders of its quickest-ever selling plane.
Then came the second crash, just five months later, under similar circumstances with the loss of control of the Ethiopian Airlines 737 MAX 8. Even as countries around the world began grounding similar models, Boeing held a firm line, “Airplane accident investigations are a tragic, horrific and sad undertaking, but they must be underpinned by facts and data,” Boeing spokesman Gordon Johndroe said. Spoken like an engineer. No empathy. No remorse for the victims. No admission of a problem. From the outside, it appeared the company was in no uncertain terms prioritizing profits instead of pursuing accountability.
It wasn’t until weeks later, with evidence and public horror mounting, that Boeing finally accepted its fate. Twenty-six days after the second crash, Boeing’s CEO issued a video apology, finally admitting “we own it” while expressing sympathy to the victims. A message missed for nearly six months is proving to be costly, indeed. Following the Lion Air crash, Boeing’s stock price dropped from a high of $440 on March 1 to $362 just three weeks later, a 17% drop.
At some point, every company, large or small, will face a crisis. No matter how successful the track record, there are times when your reputation will take a hit. For some companies, it can literally be a make-or-break moment. It took Boeing much too long to finally tackle their crisis responsibly, but it should provide an important lesson to others. Be prepared to “own it” or pay the price.