As Boeing’s new CEO, Dave Calhoun has more than a few looming questions to answer.
In a call with analysts and investors after the company announced its earnings today, he faced an especially big picture one, asked by analyst Ronald Epstein, from Bank of America. “How do you change the culture as a big organization?” Epstein said. “Particularly when you’ve got a workforce in some places that might be a bit demoralized, given some of the texts and things that went around.” (These were emails and internal messages between Boeing employees that joked about safety, bragged about deceiving safety regulators, and described the flawed 737 Max aircraft as “designed by clowns.”)
Calhoun sighed. “Boy, is that a big question,” he said.
After stressing that the company’s culture was not at the heart of the 737 Max crisis, Calhoun laid out Boeing’s culture problem—that the “horrible instant messages” from a “relatively small group of folks” had gone unchecked. “The system didn’t apparently listen or watch for things like that, and it didn’t react appropriately. And I have to do everything in my power to make sure going forward that it does,” he said. “Listening starts with leadership and it starts with me. And I think we need to do more of it. And then slowly, steadily, you change culture. People want to believe in that, and they will.”
He pointed to the success of the 777X, the latest version of the Boeing 777, which had its first test flight last week, as proof Boeing wasn’t so far off track. “This thing isn’t entirely broken. Leaders have a massive role to play in setting the stage for how to fix culture, and I have to demonstrate that one step at a time every inch of the way.”
How to listen
Calhoun is right on two counts: Change starts at the top, and it involves listening. But there’s more to it than that. If he’s really serious about changing corporate culture, according to researchers from the MIT Sloan School of Management, Calhoun needs to incentivize employees to come forward and be heard, particularly when it comes to concerns about airplane safety and design.
That might involve opening up channels of communication between employees and the C-suite, so that messaging is consistent at every level of the organization. It’s vital that the change comes from him: No attempt to fix company culture can work without buy-in from the chief executive, Neil Hartman, a senior lecturer at the school, told Quartz.
But it isn’t just communication with employees that needs to change—Boeing needs to take a close look at how employees engage with one another, and what may be inappropriate in the workplace. “In an open, honest, and transparent culture, it is likely the emails contained in the released documents would not have happened,” Hartman said on MIT’s website.
Money talks
But it’s not enough to simply make promises—if employees and investors are to believe Calhoun, he has to put his money where his mouth is. Organizations serious about change must establish new systems of hiring, promoting, and paying employees to support it, Amy Wrzesniewski, a management professor at Yale, told Quartz.
By the same token, that may mean say abrupt goodbyes to those who do not fit with the new culture. In 2014, after General Motors had to recall 13.5 million vehicles, Mary Barra, its CEO, fired 15 engineers who bore responsibility. This signaled the start of a new culture at GM, Hartman said—one that consumers could ultimately trust in.
Calhoun should be listening—but he should be doing, too. Resetting corporate culture requires decisive action from the top, rewarding employees who can usher in change, and saying a firm goodbye to those who cannot.