Dangerous Delivery

January 11, 2020 5:07 pm Published by Comments Off on Dangerous Delivery

How the culture of unchecked speed in product rollout can damage long term profitability and reputation

CREATED BY NIKKITA NGUYEN, SUPREME BUSINESS ANALYSIS, LLC IN PARTNERSHIP WITH LEADADVANTAGE, INC. January 2020

Organizations talk a good game about high-quality delivery of their products through excellent project management. Most importantly, though, everyone talks about “speed to market” (and everyone infers that they will work out the bugs later). There seems to be a formula to this hurried execution. If you’ve been on enough projects, you already know that the 3 of the first things to be reduced in quality when a team is trying to hit a target date are:

1) Documentation: which includes discovery, business and technical requirements (captured in separate documents), traceability, and test plans.

2) Testing: That is, actual testing, which includes quality assurance and end user testing.

3) Training: Ensuring that the end user understands how to use the product, as well as conduct routine troubleshooting.

As a result of the reduction in quality of these very important parts of the process, delivery is often sub-par, risking both revenue and reputation of organizations. A strong partnership AND process developed by business and technical leadership within an organization significantly mitigates such risks, and ensures a more high-quality delivery of products.

The first 3 things to go by the wayside are documentation, testing, and adequate training. Leadership must insist that these parts of the process be done with excellence to ensure delivery of a solid product.

LEADERSHIP MUST INSIST ON DOCUMENTATION, TESTING, AND TRAINING BEING CARRIED OUT ON PRODUCTS

Although many of us may never roll out a product as complex as an airplane, let’s look at some consequences of incomplete documentation, rushed testing, and neglected training has had on Boeing in the past 16 months as a a result of the 2 crashes of their 737 Max planes.

According to reports, “Investigations into the two crashes suggest that MCAS, or the Maneuvering Characteristics Augmentation System, erroneously engaged, forcing the planes’ noses to point down, and that pilots were unable to regain control of the aircraft.” (Business Insider)
We’ll look at 4 issues in this report.

Please note: This story is still unfolding, and this is not an exhaustive review. We will continue to dive deeper into this over the next few reports.

First, let’s look at the financial consequences:

TOP TAKEAWAYS

BOEING’S FATAL process and leadership MISTAKES FOR THE 737 MAX

  1. Offering incentives during the sales process that compromised appropriate training at rollout.
  2. Failure to update documentation around giving MCAS more control over the aircraft.
  3. Trying to beat Airbus so much that they rushed through validation phases for the purpose of “speed(ing) to market”
  4. Lack of testing and governance due to capture of the regulator

1 – Offering incentives during the sales process that compromised appropriate training at rollout.

According to the Wall Street Journal, “The company had promised its biggest customer for the MAX, Southwest Airlines Co. , that it would pay it $1 million per plane ordered if pilots needed to do additional
simulator training,”

These incentives put pressure on the organization to over-rely on pilots former training (and assume that pilots can figure out how to troubleshoot this new software issue based on past experience).
Furthermore, when the decision was made to give the MCAS even more control over the plane, that promise incentivized Boeing to leave those updates out of the documentation so that they would not be addressed and they would not have to pay $1 million to Southwest Airlines per plane.

2 – Failure to update documentation around giving MCAS more control over the aircraft.

“As part of its calculus, Boeing decided it didn’t need to tell cockpit crews about MCAS or how it worked. During early design phases, Boeing referred to the system by name in a draft manual, parts of which were reviewed by the Journal, and explained generally what it was supposed to do.
Those references disappeared before it was issued to airlines. The company reasoned that pilots had trained for years to deal with a problem known as a runaway stabilizer that also can force the nose of the plane to dip. The correct response to an MCAS misfire was identical. “Pilots didn’t need to know why it was happening,” according to the Wall Street Journal.

If leadership had the engineers’ and pilots’ perspective here, this would have been have identified as a problem early, and the subject matter expert rationale MAY have prevailed. Pilots absolutely needed to be made aware of these changes, but there was an intent to avoid change requests and required documentation updates, which would have started a domino effect of answering more pilot questions and requests for training, which would have undoubtedly pushed back delivery of the planes.

3 – Trying to beat Airbus SO MUCH that they rushed through validation phases for the purpose of “speed(ing) to market”

“Boeing began developing the MAX in 2011 as bitter rival Airbus SE began making inroads with its A320 neo. Boeing, needing a fuel-efficient single-aisle airliner to avoid losing market share, rushed to lock in deals before its
board approved building the jet”

This is where the $1 million sales per plane was made around training.
If there were sufficient SMEs (Subject Matter Experts) heavily involved in this part of the process, the feasibility of this would have been called into question and the sales incentive would likely not have made it out the door.

4 – Lack of testing and governance due to capture of the regulator

“To adjust MCAS for lower speeds, engineers quadrupled the amount the system could repeatedly move the stabilizer, to increments of 2.5 degrees. The changes ended up playing a major role in the Lion Air and Ethiopian crashes.
After increasing the system’s potency, though, Boeing didn’t submit a new safety assessment to the FAA, according to people familiar with the matter. While a top FAA pilot knew about the changes, other officials were in the dark and some now say an updated safety assessment could have provided a chance to find problems.
The system’s evolution and lack of an updated safety assessment were earlier reported by the Seattle Times. The FAA has said Boeing wasn’t required to update the document.”

One can make a very strong case that this was a regulatory capture event.

“Regulatory capture is an economic theory that says regulatory agencies may come to be dominated by the industries or interests they are charged with regulating. The result is that an agency, charged with acting in the public interest, instead acts in ways that benefit the industry it is supposed to be regulating.” (Investopedia)
There were multiple instances throughout the process that indicated that Boeing had captured the FAA, thus making the FAA much more lenient in documentation, simulation testing requirements, and pilot training. These leniencies had fatal results for 346 people.

Had there been strong partnered leadership between business and technical parts of the organization, as well as true process adherence, these tragedies could very well have been avoided.

OUR APPROACH
With the fast-paced corporate culture that we work in, there is ample opportunity to stand out from the competition by taking a customized approach to your organization’s long term strategy and create combination leadership and technical processes across your entire enterprise, especially calibration of documentation, communication, and training flows. Our Critical Success Factors Program can facilitate your company’s execution of and continued adherence to these processes, which will expedite your success.

REFERENCES
Tangel, Andrew, et. al. “The Four-Second Catastrophe: How Boeing Doomed the 737 MAX.” Wall Street Journal. https://www.wsj.com/articles/the-four-second-catastrophe-how-boeing-doomed-the-737-max-11565966629. Published August 16, 2019. Accessed November 12, 2019.

Stigler, George J. “The Theory of Economic Regulation.” The Bell Journal of Economics and Management Science, vol. 2, no. 1, 1971, pp. 3–21. JSTOR, www.jstor.org/stable/3003160. Accessed November 22, 2019.

Investopedia. Regulatory Capture Definition. https://www.investopedia.com/terms/r/regulatory-capture.asp. Updated October 23, 2019. Accessed November 22, 2019.

Slotnick, David. Business Insider. “Boeing’s 737 Max shouldn’t be allowed to fly with a controversial flight-control system, an aviation regulator reportedly said in leaked emails.” https://www.businessinsider.com/boeing-737-max-mcas-canada-aviation-regulator-leaked-email-2019-11. Published November 22, 2019. Accessed November 25, 2019.

Cameron, Doug. Wall Street Journal. “Boeing Details Financial Hit From 737 MAX Grounding” https://www.wsj.com/articles/boeing-forecasts-initial-1-billion-hit-from-737-max-troubles-11556106144?mod=searchresults&page=2&pos=5&mod=article_inline

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