How companies like Boeing can win trust

Kenya, Ethiopia, and the world watched in horror as Ethiopian Airlines flight 302 fell off radar last week. Our worst fears then were realised as the full scale of the tragedy came to light and families and friends of those on the fateful plane began to question, contemplate, and grieve.

The journey of truth to understand the causes of the catastrophe and how to prevent future disasters will be long and painful.

Since the calamity, much attention now focuses on the Boeing 737 Max 8 and 9 aircraft and whether the airplane’s sophisticated anti-stalling system actually caused a system failure.

Sometimes a company’s good intentions yield horrible unintended results. Painful questions have emerged and will continue to arise including: What did Boeing know and when? What did global regulators know? Why did no regulator act sooner? Could quicker action and earlier delivery of the long-awaited software fix following the Indonesia Lion Air flight 610 tragedy have prevented the Ethiopian Airlines flight 302 disaster? Why did Boeing wait until after regulators to ground its entire Boeing 737 Max 8 and 9 fleet?

Generations of MBA students will study Boeing and how they handled the response to the two tragedies. Will Boeing be able to regain the aviation world’s trust?

Social scientists Graham Dietz and Nicole Gillespie provide guidance for how companies, such as Boeing, should react following an organisation-level failure in order to rebuild trust.

Organisation-level failures come in several different forms. Boeing’s perceived likely failure hinges on a fatal yet avoidable accident due to a safety flaw in its key product. Other organisation-level failures can include accounting frauds, deceit, incompetence, exploitation of vulnerable people, massive compulsory job losses, bankruptcies, and catastrophic collapses in organisational finances. When an organisation undergoes an entity-wide failure, customers reduce demand for their products or services. But what about employees of the firm? Staff too lose trust in their employer following an organisation-level failure.

In speaking to Kenyan friends and former colleagues in the Chicago area, Boeing’s headquarters, and Seattle, Boeing’s manufacturing hub, the mood among Boeing employees seems dismal. They appear to exhibit the demotivation and gloominess of working for an organisation with a massive failure.

Boeing and other organisations with entity-wide failures can expect mass employee turnover, low staff motivation, increased employee sick leave, slow employee completion of tasks, decreased innovation, and slumping sales.

How can organisations like Boeing and others repair employee trust under such scenarios?

The scientists provide a well-researched four-stage process that must be followed. First, the company must do an immediate response that verbally and quickly acknowledges that an incident took place, expresses regret, announces a full investigation, and commits resources to prevent a re-occurrence.

Interventions

Then simultaneously the firm must take action in the form of interventions against known causes of the incident. Second, the business must conduct a diagnosis. The investigation must prove accurate, systemic, multi-level, timely, and transparent. Many companies fail in this stage due to a lack of transparency in the diagnosis.

Third, the organisation must undertake reforming interventions. The firm must verbally apologise subject to culpability and make reparations where appropriate. Then it must simultaneously take action as derived from the diagnosis investigation, fully implement corrective action, and prioritise mechanisms to fix faults according to the failure type.

Fourth, the company should conduct an evaluation of their response and actions that also proves accurate, systemic, multilevel, and timely.

Only after the above four trust repair techniques take place following an organisation-level failure can a company fix the negative perceptions of its employees and start to turnaround the firm on the path to recovery.