Why Boeing Fired its CEO

What led Boeing Co.’s board to fire CEO Dennis Muilenburg yesterday? The still-grounded fleet of more than 800 Boeing 737 MAX jetliners? The failed maiden flight of its Starliner space capsule last week?

Those led to questions about his leadership, yes. But the deciding factor pertains to an issue that is a ticking time bomb for other CEOs as well: Muilenburg had to go because he didn’t communicate effectively at critically important times.

Sometimes it wasn’t enough. Boeing directors were dissatisfied by delays in receiving updates, and by surprises, according to today’s Wall Street Journal. Other times, what was communicated wasn’t adequate: the FAA says Boeing needs to focus on the quality and timeliness of data and be more transparent with its relationship with the FAA.

But most damaging was that Muilenburg would communicate too early. Last week he tweeted congratulations to the team behind Boeing’s Starliner space capsule before it was disclosed the team botched its job, leading to a failed maiden flight last Friday. This came after he repeatedly assured investors and regulators the company would soon receive approval from the Federal Aviation Administration on a fix needed on its 737 MAX. Two of those planes crashed, killing all aboard, and all others were grounded, awaiting a fix that first needs regulatory approval. The FAA says it has set no timetable for when the MAX will be allowed to resume carrying passengers.

Providing accurate information on a timely basis is a must. This is easy to say, but difficult to when the information you’re working with is still taking shape, and/or your organization isn’t used to having to act in such a manner.

Occasionally a CEO just doesn’t know how to communicate well. But most of the time he or she is only as good at the team around them. And large organizations such as Boeing tend to still operate like large ships, unable to act nimbly enough to gather the information a CEO needs to lead.

Effective corporate communication is strategy—from who’s hired for key roles through how he or she shares information with others by when, knowing who’s accountable for what and ensuring accuracy and timeliness remain constant from the front lines to the board and back.

For some reason at Boeing, this wasn’t happening and hopefully new CEO David Calhoun (and the board) will address this quickly. One sign this may occur is in another Boeing announcement yesterday that received far less media attention. Niel Golightly was named the company’s new senior vice president of communications effective Jan. 1, replacing a person who had held the position for only 10 months.