POISONING THE GIANT

How big can a company be to suffer from repeated management mistakes and not succumb? I don't believe such a big company exists, especially in today's reality.

Take GM for example: from the first or second largest company in the world to an uncertain future. Yes, there were and are so many mistakes that the benchmark company for all others is now struggling to survive.

But that's not the company I'm talking about. I'm talking about Boeing, a company that has always been a model for everyone seeking work done with precision and quality. Growing up near Congonhas Airport, I couldn't help but admire the various aircraft of what was always the largest manufacturer: 707, 727, 737, 747, 757, 767... and then the confusion begins.

In 1996, a seemingly brilliant idea led to the merger of Boeing with McDonnell Douglas. What seemed like the beginning of the largest large aircraft manufacturer of all time turned into the biggest mistake in history. The mistakes made after the merger are still being felt today, and there's no indication they'll end any time soon.

Simply put, the story goes something like this: The management styles of the two manufacturers were very different. While Boeing was recognized for being a precision company, with engineers and the highest quality products, Douglas was the company with a modern approach. In other words, if you simplify, engineering versus marketing. The problem isn't the management style, but the objective. When you're going to fly, you don't care about the color of the uniform or the manufacturer's career plan, but rather the level of demand on the production line. If it's less than the maximum, you'll choose not to fly.

Boeing's reputation was so solid that it helped build a reputation for aircraft safety. Together with a number of airlines with top-notch maintenance, the manufacturer managed to make people forget they were in a thousand-ton object at 10,000 meters.

Douglas never had that reputation, but even so, it was they who took over the new company. Even with the Boeing name on the facade, the most bizarre set of strategies in decades began. The focus shifted from delivering the most reliable aircraft to profitability. Employees were invited to buy stock and "wear the jersey." Cost-cutting became the new craze, and this included eliminating several control steps.

Douglas decided that implementing its profitability-focused management method would be a good thing for an engineering company, where safety is the number one, two, and three concern. And they began cutting process steps, reducing expenses with process redundancy, and simplifying decision-making. Why create a replacement for the 737 if it's much cheaper to upgrade? Why exhaustively test some systems if they seem good right away? The biggest mistake of this strategy was lying about safety tests and, more than that, lying about the new features of the new 737 Max: by omitting that it had a new autonomous piloting system, airlines were misled about the number of hours of this new training, as if it were just an upgrade. For airlines, the highest cost of a new aircraft isn't the acquisition itself, but the training of pilots, who spend hours and hours in simulators instead of actually flying and generating revenue. At a time when pilots are in short supply.

By stating that the new MCAS was merely an upgrade to the autopilot system, Boeing deliberately omitted the fact that it had the autonomy to make decisions without consulting the pilot. Unaware of this "detail," some pilots found themselves fighting with the aircraft until two crashed. That's when the issue came to light, including the internal report that ordered this function omitted from the training manuals.

The result: two years of grounding for nearly 400 new-generation aircraft. The cost of this punishment was far greater than any additional training. But then Boeing learned, right? No. That was just the tip of the iceberg. Throughout the production process of the new 737, the 777, and the all-new, revolutionary 787, countless mistakes were made due to quality control failures. Fortunately, most of them didn't result in fatal accidents, but the costs of these errors are unacceptable. Much worse than the infamous Ford Pinto case in the United States in the 1970s, when the automaker concluded that it was cheaper to compensate the families of victims burned to death in rear-end collisions than to recall the vehicles.

Boeing's magic solution was to hire every consulting firm in the market. Each brought a foolproof methodology for solving management, accounting, expenses, production flow, quality control, and so on. Then began countless hours of training and meetings to discuss how to implement the system, what color the dashboard should be, and who would lead which project. Meanwhile, production errors continued unabated. They are poisoning one of the most iconic and respected companies in the world.