Freefalling

I just finished watching the documentary Freefall:  A Reckoning for Boeing, which is available on Netflix.  I highly recommend watching it, but only during the day. Watch it at night, and it may keep you up. It’s a film designed to make you angry (rightly) and to wonder seriously about the safety of your next flight on Boeing equipment.

For anyone who has followed the story of the Boeing scandals, it’s not full of surprises when it comes to the facts of the case. Peter Robison’s excellent book, Flying Blind:  The 737 Max Tragedy and the Fall of Boeing, to my mind, lays out the facts better. It shares more of the roots of the crisis, including the multiple failures of regulators who had abdicated much of their oversight to Boeing. The wolves were guarding the henhouse.

Where the movie succeeds is in sharing the stories of the numerous safety inspectors and investigators at Boeing who raised issues, availed themselves of helplines and claim they were ignored at best, and retaliated against at worst. 

The film provides a vivid portrait of how difficult it is to blow the whistle, and how raising concerns, even about potentially life-threatening defects, can be ill-received by managers charged with meeting business goals.

There is some hope, though.  Remarkably, some of those whistleblowers continue to work at the company. 

The whole film, and indeed the whole long, convoluted crisis at Boeing, is an indictment of what happens when business goals come before all other concerns. Lives, in this case, were lost, and, the film implies, even more deaths may yet come.

It’s a chilling message since it demonstrates how even a company that for decades was driven by excellence and quality above all else can be corrupted by managers more concerned with the bottom line and share price.

The film is especially troubling now with private equity (PE) controlling so much of the economy. According to a widely-quoted statistic, 21,000 firms are backed by private equity. Estimates are that works out to 15-20% of the US economy and that number is growing at a compound rate.

Typically, PE firms hold an investment for 3-5 years, during which they seek to maximize the organization’s value before having a liquidity event. With such a short horizon, there is little incentive to invest in values such as quality since any problems are likely to occur down the road, long after the PE firm has sold the company to someone else.

I am not suggesting that all PE firms would behave so callously, but we in compliance need to always be mindful of what the incentives are.

We also need to be mindful of the fact that culture, as the film shows, is very complex. We tend to focus on the importance of tone at the top.  In Freefall, it seems as if there were multiple cultures at Boeing. Management had a bottom-line driven culture. The long-time Seattle employees had a quality driven one, and the newer employees in South Carolina had a third one that, at least as portrayed in the film, was indifferent.

So what should a compliance officer do in a situation like that In Boeing? I’m really not sure. On the one hand, it is the job of the compliance officer, especially one with ethics in their title, to fight to ensure that the company does the right thing. On the other hand, without management support, it would be pointless. And, on yet another hand, the option of simply walking away is morally fraught since lives are at stake.

What would you do if you were there? And will you be sticking to Airbus after watching the film?