How a communication problem created the biggest blunder in aviation history

August 2011.

Boeing launches 737 Max in response to

the competitive Airbus A320neo.

The aim of the product is simple:

To enhance fuel efficiency and performance.

Within just a month of its announcement,

Boeing secured 700 commitments for the 737 MAX.

By 2018, the company received nearly 5,000 orders.

This made it one of the fastest-selling aircraft in Boeing's history.

Things were going well for Boeing.

However, in 2019, everything changed for the worse.

So much so that the company had to replace its CEO,

face multiple legal trials, lost its reputation,

was blamed for the death of 346 people,

and faced financial losses totaling a whopping amount of

$92 Billion.

What caused this downfall?

What was the reason behind this downfall?

And what can you learn from it?

The answers to all these will be answered in today's edition of

Good Luck and Good Growth.

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Touching the Sky

In August 2011, Boeing introduced the 737 MAX.

The industry experts saw this as an ambitious response.

This came because of the fierce competition from Airbus A320neo.

737 MAX promised fuel efficiency, state-of-the-art features, and cost-effectiveness.

All three are an irresistible proposition for any airline.

By 2017, the MAX had made its first commercial flight.

Quickly it became a darling of the aviation world.

These early successes hinted at a new era for Boeing.

This came with over 5,000 confirmed orders flooding in from eager airlines.

But by the end of 2018, the cracks behind the thinly veiled walls of ambitions

started to appear.

How did the end of good things begin?

Descending into Tragedy

October 29, 2018 started as usual for Boeing.

Business was as usual.

But by the end, things had taken a much darker turn.

On this day, Lion Air Flight 610 plummeted into the Java Sea.

This sadly ended with 189 losing their lives.

Five months later, Ethiopian Airlines Flight 302 met a similar fate.

This claimed 157 lives.

With back-to-back crashes, investigators were quickly hired.

Investigators found a bone-chilling similarity.

Both crashes faulted MCAS.

For those of you who don't know,

MCAS stands for Maneuvering Characteristics Augmentation System.

This is a safety feature designed to stabilize the aircraft.

This raises one question:

Why did a safety system lead to disaster instead?

More importantly,

And why were pilots unaware of how to counteract it?

The Fault in our skies:

The inquiries did not just stop there.

Subsequent inquiries unearthed damning truths.

Within Boeing, a culture of silence was prominent.

Engineers were under immense pressure to match Airbus’s rapid production cycle.

To meet up with this demand,

concerns about safety features, like MCAS, were dismissed or

got downplayed.

As silence was the norm, the upper management and the blue-collar

hard workers had a severe communication gap.

The dire state of internal communications did not just stop there.

Even the pilots too had not been properly trained on MCAS.

The aircraft’s manual provided limited information.

It left crews ill-prepared in critical moments.

The problem did not just stay limited till internal communications.

The same was replicated in external communications too.

Regulators like the FAA had relied heavily on Boeing for self-certifications.

This gap in oversight proved fatal.

What was the aftermath of this finding?

A price too steep for silence

Boeing has faced substantial financial losses

Estimates indicate a total loss of approximately $32 billion since 2019.

This figure encompasses both direct and indirect costs associated with the

aircraft's grounding and subsequent operational challenges.

The following is a breakdown:

• Direct Costs:

Boeing estimated direct losses are related to the groundings at around $20 billion.

This includes fines, compensation to airlines, and legal fees associated with the crashes and grounding of the aircraft

• Indirect Costs:

Indirect losses, which include canceled orders and reputational damage, are estimated to exceed $60 billion.

This comes from over 1,200 canceled orders for the 737 MAX.

• Additional Financial Impact:

Boeing reported significant quarterly losses throughout this period.

This includes a record quarterly loss of $2.9 billion in Q2 2019.

The company also provisioned approximately $4.9 billion for airline compensation during this time

• Overall Financial Performance:

From Q2 2019 through early 2024,

Boeing reported core operating losses totaling about $31.9 billion.

These net losses reach approximately $27 billion during the same timeframe

These figures illustrate the profound impact that the lack of clear communication and safety oversight had on Boeing's financial health, leading to a significant decline in its market value and operational capabilities.

This raises one question:

What could have Boeing done to avert this?

Crises of Communication:

At the heart of this disaster, is one recurring failure:

communication.

Boeing’s management did not:

-- clearly convey the significance of MCAS to their engineers.

-- ensure that pilots were adequately informed.

Internally, engineers reported feeling pressured to prioritize speed over safety.

Externally, the Federal Aviation Administration (FAA) trusted Boeing’s assurances without fully verifying safety claims.

A more transparent dialogue would have averted this disaster.

If we ignore the brand losses, what about the human lives lost?

Their dreams died.

Their families were affected.

No amount of money can ever recover that loss.

And all of this because the management prioritized speed and deadlines,

over transparent and clear communication.

The cascading effect of this tells a vital lesson:

Faulty communication leads to fatal outcomes.

But how can you learn from this?

Final Reflections:

The Boeing 737 MAX saga is not a tale of faulty software or

missed regulatory checks.

It is a human story.

It is a story of how communication missteps can amplify risks.

It erodes trust and transforms triumphs into tragedies.

Sadly, Boeing is not the only company with this problem.

To solve this problem here are 5 steps that every company should follow:

• Establish Clear Communication Channels:

Implement a multi-channel approach.

Various methods such as email, face-to-face meetings, and digital platforms are helpful.

This ensures that information reaches all employees through their preferred mediums.

• Practice Active Listening:

Encourage managers to actively listen to employee feedback and concerns.

This builds trust and respect, leading to more open and honest communication

• Tailor Communication to the Audience:

Recognize that different team members may have

different communication preferences.

Managers should adapt their communication style based

on individual needs to ensure messages are well-received and understood

• Provide Regular Updates:

Keep employees informed with timely and consistent updates.

Don't wait for all the information to be available at once.

Share what you can as often as possible to prevent rumors and maintain transparency

• Empower Middle Managers:

Keep middle managers well-informed.

Provide them with the necessary tools and information to

effectively communicate with their teams.

This ensures consistent messaging across all levels of the organization.

As industries grow more complex, can leaders afford to leave communication as an afterthought?

Absolutely not!

Let this be a clear and powerful reminder

that transparent communication isn’t just desirable.

It’s indispensable.

PS:

If you have read this to the end, then thank you.

This was a case study on how problems in language and communication can spell disaster.

If you are a founder, or CMO who faces communication problems like this, then you should connect with my sponsor

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Until next time, this is Manikk Gupta ,

wishing you good luck and good growth!