August 9, 2020
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Business Damage Control: What we can learn from Boeing Plane Crash and Lexus’ Recalls

Today’s HexavianTips is a Business Case study on the Boeing 737 Max Plane Crash. At that moment, the Boeing brand was undergoing some serious damages.

The 737 Max plane crash crisis wiped more than $25 billion off Boeing’s market value in just a few days. And they seemed to be doing poorly at closing out loopholes fast.

As business owners and CEOs, if you were in charge of Boeing when this happened, how would you have improved Boeing’s brand reputation?

There was a time we discussed one of our HexavianTips on Excellence and we talked about the very few firms in the world who have reached Six Sigma certifications. In management, the highest level of excellence is measured mathematically through Six Sigma. Boeing was one of them.  It’s the closest any firm can get to excellence. We owe most of the most powerful breakthrough in aviation and aeronautics to them actually. But excellence is just not perfection.

Perfection
Perfection.

Perfection is an infinite chase but excellence can be reached. But the trick is to aim for perfection and if you fail, you’d at least land on excellence. For times when we fail temporarily which is part of life, it’s important to develop a template for damage control. Toyota and Lexus definitely have this. During the classic Lexus recall of the 90s, their corrective steps were legendary. Most recalls are handled by making an announcement to the press and mailing a notification letter to owners. Lexus, instead, called each owner individually on the telephone the day the recall was announced. When the owners picked up their cars at the dealership after the work was completed, each car had been washed and the tank filled with gas. If an owner lived more than a hundred miles from a dealership, the dealer sent a mechanic to his or her home. In one instance, a technician flew from Los Angeles to Anchorage to make the necessary repairs.

Lexus
Lexus

Was it necessary to go to such lengths? You could argue that Lexus overreacted. The problems with the car were relatively minor. And the number of cars involved in the recall – so soon after Lexus had entered the marketplace- was small. Lexus would seem to have had many opportunities to correct the damage. The key fact, though, was not the number of people affected by the recall but the kind of people affected by the recall. Who, after all, are the people willing to take a chance and buy a brand-new luxury model

From Boeing to Lexus to our small businesses we all should too.

Boeing has been amazing prior to the plane crash actually. But after the crash, it was imperative for them to communicate that now than ever. At that very sensitive phase, I believe their PR shouldn’t be driven directly through them but indirectly through industry key stakeholders that they may sponsor.  I referred on my BusinessDay column article I shared here sometimes ago as the triads of influence, namely mavens, sneezers, and connectors. In retrospect,  at times like this, reminding your customers that you sincerely care and you are on top of their matter is a winning strategy.

Boeing 737 MAX
Boeing 737 MAX

Boeing is a great brand that cares and is known for excellence and it’s key for them to remind us all  (there are only a few companies in the world with the ISO certification ratings and high level of Six Sigma excellence, the few being Bank of America, Amazon, Nestle, Boeing).  Take for example, If you draw a scatter diagram. In relations to correlations and comparative analysis between airplanes like Boeing and products like Volvo and Rolls Royce ( two of the safest cars), did you know that the mathematical odds of dying in a car crash is one in 5,000 trips? But for a plane crash, it is one for every 1.2 million flights, with odds of dying to be 1 in 11 million. Safety has to be re-guaranteed.

Clearly, the plane crashes were more technical than human. However, not to sound judgmental, but it was not long after the first Max plane dropped that there was another report showing engine complains for a very new plane model is abnormal. But because strangely as a B2B as against a B2C modeled business people are facing their brand and not the airline.

Boeing’s statements and actions after the crash did not sufficiently provide confidence to the consumers and as a result airlines upon airlines banned their planes.

Solution
Solution

With these said, it is clear that being defensive is not the solution and it would only make things worse. As a market leader, being defensive is not the same thing as defensive marketing ( which is the right thing to do when you have a number one spot market leadership and a star product heading for a dog in the BCG matrix. Perhaps they could have tried the following:

Imagine if the Boeing CEO  or very top members of the management call members of the family of the deceased. This could been done to let families of victims know that Boeing cares about people that actually fly their planes. This would have been great but then, they are in the  B2B  and not B2C market place. But Lexus called all the people with the malfunctioned car one after the other. It’s easier because of the kind of people involved.  Who, in the year where that happened, after all, are the people willing to take a chance and buy a brand-new luxury model.

However, they could have started a foundation and then on behalf of the airlines pay all necessary compensation, in any case this does not concern Boeing directly they could have at least provided some compensation for the family of victims, could be in other forms aside monetary payments, like scholarships.

Also, they could have offered to pay for pilot retraining on the Boeing Max. This would have been key for Boeing to redeem its image quickly, as the said error which led to the accident was due to lack of training.

For people that bought or already ordered the plane, a heartfelt press statement could be issued for the family of the pilots who died in conjunction with Ethiopian Airlines, visit countries who have had the Boeing 737 banned, speak with their government officials to give them reassurance of your commitment to the safety of your planes in general.

Generally, it’s important for businesses to react fast and well in relation to damage control.

Eizu Uwaoma
Eizu Uwaoma

 

Eizu, ©Hexavia!

Strategy. Business StartUps and Corporate Restructuring Consulting

T: 08035202891

Uwaoma Eizu is the lead strategist at Hexavia! He is a graduate of Mathematics with two MBAs and over a decade of experience working with startups and big businesses. His core is in building startups and in corporate restructuring. He is also a certified member of the Nigerian Institute of Management, Institute of Strategic Management of Nigeria and the Project Management Institute, USA. By the side, he writes weekly for the BusinessDay newspaper.

https://hbc.org.ng/shop/laws-of-business/

 

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