Boeing was perhaps the biggest corporate compliance story of 2019, and we see no signs of that changing so far in 2020. This weekend we had another glimpse into the flawed corporate culture there that ultimately caused Boeing’s disaster with the 737 MAX jets. So let’s take another look at the lessons others can learn here.
As usual, the glimpse came from an article in the New York Times sifting through documents Boeing has released since its two 737 MAX crashes. The article was recounting internal memos and messages Boeing employees had generated in the 2010s, while the company was trying to convince the Federal Aviation Administration that the MAX was ready for commercial flight.
One telling exchange happened in 2014. An employee working on the MAX training materials told Boeing’s chief technical pilot, Mark Forkner, that perhaps the training manual should include more material about how to handle certain emergencies.
Forkner didn’t relish that idea, because it might lead the FAA to require more extensive training for MAX pilots — when Boeing was pitching the MAX to its customers as an easy-to-fly 737 that wouldn’t need so much training. The other Boeing employee worried that keeping the training recommendations light was a risk.
Then came this key paragraph in the NYT article:
Ah! There it is again. The most dreaded word in discussion about corporate culture: pressure.
In the world of corporate compliance, pressure is the dark side of the Force. It takes a strong commitment to ethics — which, of course, every company and CEO professes to have — and perverts that commitment into something misshapen, something nobody wants.
What strikes me about Forkner’s statement above is its eerie similarity to what we saw at the other corporate debacle of the 2010s: Wells Fargo. That was another sprawling organization that professed a strong commitment to ethical culture, yet everywhere employees felt a pressure to perform that degrades into misconduct.
Heck, one of my most popular posts from 2016 explored how a high-performance culture can veer into high-pressure, using Wells Fargo as the case-study. That was four years ago, in a radically different industry with radically different ethical failures. Yet the same word describes the same root issue: pressure.
The Origins of Pressure
So where does that pressure come from? How can ethics and compliance functions fight it, if at all? For that, consider the next few lines of the New York Times article (including a quote from Chesly Sullenberger, the hero pilot who safely landed a jet in the Hudson River in 2009).
Pressure from Wall Street, that faceless behemoth constantly seeking to extract more profits from a company’s operations — OK, that’s not news.
I think more about the insidious nature of pressure, Wall Street or otherwise. That is, Wall Street never says, “Gut the R&D budget and put that line item straight into dividends.” It simply states expected earnings goals and mindlessly, collectively punishes firms that fail to meet the numbers.
So the pressure that CEOs feel — and that vice presidents, department managers, and employees feel in consequence — is always a matter of compromising your way forward.
That is, the brass never says, “Eliminate safety requirements so we can put that savings straight into profit.” They just ask, do we really need that extra step? We have so much else built on the assumption that we don’t need it. Isn’t there some way we can keep it out?
It always starts as baby steps. You make one compromise today, sure that you’ll recover that ethical ground next time — and maybe you do, but you also make another compromise next time that’s a bit bigger than the one you just took back, and so on and so forth. Eventually pressure becomes the culture, and everyone is trapped in it even though they all might hate it.
In Boeing’s case, the pressure was to accelerate delivery of the MAX because rival Airbus had already begun delivery of its A-320 jets. From now-fired CEO Dennis Muilenberg down through the ranks, I’m sure many people felt frustrated that they were struggling against forces larger than them. Like Forkner said, it was the culture they were pressured to comply with. I bet many people from Wells Fargo would know the feeling.
Pushing Back Against Pressure
When I wrote that piece about Wells Fargo, I coined what I call the Anti-Fraud Triangle — a system of countervailing forces to push back against pressure. It’s worth conjuring up again:
I expounded on the Anti-Fraud Triangle in another post from 2017, exploring the traits a strong culture should have to push back against pressure. First, a strong culture should send the message that employees must try, but also give them room to fail and then try again. Otherwise they start fearing that any and every failure will be their demise, so they’ll take any and every measure not to fail.
That certainly sounds like the debate Forkner and the other Boeing employee were having. They knew they shouldn’t skimp on training materials for the MAX, but also felt that they couldn’t bring that unwanted fact to management. So they retreated from their first position — and that decision for minimal training now seems a grave miscalculation.
Freedom to speak up is also a crucial ingredient here. And it’s not just feeling comfortable speaking about violations of law or regulation; the culture needs to embrace speaking up when management’s desired outcomes aren’t wise. That’s a much broader concern than reporting compliance violations. It’s about fostering a culture where employees feel like their input is heard and valued, even when their news is not what management wants to hear.
The other important leg of the Anti-Fraud Triangle is values, to push back against rationalization. When people feel pressured to compromise what they know is right, they rationalize. They seek some reason to declare that maybe their compromise isn’t unethical, if you look at the action in just the right frame of mind.
The answer to that is to ingrain a sense of values so strong that the person can’t rationalize his way out of it. You want values so strong that when an employee does contemplate compromise, he tells himself, “That’s something I just won’t do.”
After all, before a person decides to compromise, that’s what the employee is telling himself. And somehow, those values don’t hold. We need to make them hold.