With today’s not-totally-unexpected announcement of Dennis Muilenberg parting ways with Boeing, the question remains whether this is enough to turn Boeing’s fortunes around. The adage that “the buck stops at the head of the organization” having been touted amongst regulators and aviation pundits, many have hailed this event as a turnaround moment for the beleaguered manufacturer. Indeed, investors are rewarding this announcement with an upward bump in Boeing’s stock price. But is this the event that will re-invigorate the company, instill aviation community faith and trust in the company? I believe much more needs to be done to satisfy Boeing aircraft stakeholders that change is underway.
In recent hearings, Mr. Muilenberg was depicted as the architect of the Boeing culture that pervades the Boeing organization. His various leadership roles at Boeing did indeed leave a legacy of getting the job done, managing costs, delivering aircraft and, more importantly, delivering value to Boeing shareholders. And here’s where the legacy that Mr. Muilenberg leaves as he exits the CEO role will be defining. But the Boeing Board of Directors needs to do some soul-searching as they are complicit in Boeing’s cultural paradigm.
Boeing has pursued a product development strategy in recent years that put market share and cost containment in the pilot’s seat. With Airbus’ A320neo series aircraft in the marketplace as both fuel- and performance-leader, Boeing’s board elected to pursue the 737MAX path to quickly bring a competitive aircraft to market rather than design and develop and new aircraft with the needed economics and performance. In hindsight, a strategic error for which Boeing is currently paying the price.
Along with Mr. Muilenberg’s departure, the Boeing Board of Directors needs a membership review. The next generation of Board membership along with the new CEO will need to reinvent the Boeing culture and reshape the aircraft manufacturer into the trustworthy entity it once was.
What do you think will happen next?
John Gradek is Principal with Dergel Executive Search. His practice covers Executive Search for Aviation, Supply Chain and Logistics, Manufacturing, Operations and Technology Leadership.