Someday, Boeing’s handling of the trouble with its 737 Max airliner will be a case study in crisis management. It’s too early to tell exactly what happened in two crashes of the same plane model within five months— the investigations could go on for months or years—but Boeing’s initial resistance to grounding the 737 Max has sparked criticism.
In a phone call with President Trump, Boeing CEO Dennis Muilenburg urged Trump to keep the planes in the sky, even as countries around the world were grounding them. The President decided the next day to follow suit, but should the plane’s manufacturer have shown more leadership in the crisis?
“We could have avoided much of the turmoil had the company’s leaders done a better job of framing the situation,” wrote Sandra J. Sucher, a professor of management practice at Harvard Business School, in the Harvard Business Review. “Leaders have one crucial task at the start of a disaster in the making, and that is to use the art of framing to describe the nature of the problem the organization is facing. Frames shape the way we think about problems (and also opportunities). They tell us what category of problem we are dealing with, and because they identify a type of problem, they also contain the seeds of action and response.”
Other management experts tended to agree. Rupert Younger, director of the Oxford University Centre for Corporate Reputation, told the Financial Times that Boeing should have acted faster. “Irrespective of whether it’s their fault, in cases like this it’s almost always the case that organizations that immediately show humanity and empathy and put safety first perform better than those that don’t,” said Younger.
In her piece in the Harvard Business Review, Sucher compared Boeing’s initial reaction to Johnson & Johnson’s response during the Tylenol poisoning crisis in 1982, which is widely regarded as the gold standard for how to handle a corporate crisis. Johnson & Johnson’s CEO at the time, James E. Burke, “famously declared that it was a public health problem,” she wrote. The company’s framing led to its swift and decisive response, which included a recall of all bottles of Tylenol capsules, the design of tamper-resistant packaging, and eventually the end of capsules that could be pulled apart and resealed. Rather than respond with defensiveness or denial, Johnson & Johnson set an example for the industry, and corporations in general.
Properly framing a crisis, Sucher writes, requires hard thinking about what kind of problem the company faces. In the case of Boeing, Sucher argues, a better response might have been: “This is a technical problem that we do not fully understand. In light of that uncertainty, we recommend grounding the 737 Max 8s and 9s until we can be sure we know what is causing these crashes, and can satisfy ourselves and all of the global regulators that the plane is safe to fly again.”
While Sucher focused on crisis management, other case studies of the 737 may explore Boeing’s long-term decisions about the plane. Specifically, was it wise for Boeing to keep modifying a 50-year-old aircraft design rather than starting from scratch, given the dramatic changes in technology over the decades?
In a close look at the plane’s history in the Los Angeles Times, veteran reporter Ralph Vartabedian traces the plane’s low-slung design to the days when passengers had to climb stairs to board the planes and baggage handlers needed direct access to the cargo bays.
“That low-to-the-ground design was a plus in 1968, but it has proved to be a constraint that engineers modernizing the 737 have had to work around ever since,” Vartabedian writes. “The compromises required to push forward a more fuel-efficient version of the plane—with larger engines and altered aerodynamics—led to the complex flight control software system that is now under investigation.”
Boeing’s motivation for continued modification of the 737 was at least partly about cost-saving, since it’s cheaper and simpler to build a derivative plane than a whole new one. Over the years, the 737 has been a best-selling airliner, but now Boeing faces a turning point. With back orders for more than 4,700 of the updated 737 line, Boeing’s next moves have much at stake.
Consumers are showing a growing interest in the background of the products they buy: What’s their environmental impact? Are the ingredients safe? Are the factory workers treated fairly?
Now comes a way to identify products and services from women-owned businesses. Fashion designer Rebecca Minkoff, famed for her handbags and accessories, is planning to launch a “female founder” symbol so shoppers can use their pocketbook to help those businesses succeed.
“First and foremost, we want a symbol that can be recognized on packaging, or websites, or storefronts,” Minkoff told USA Today small-business columnist Rhonda Abrams. “We want to galvanize a community to buy from and support each other… We can educate the consumer in the [same] way that she’s been educated to turn over and see [if a product] is non-GMO or organic.”
Minkoff launched the Female Founder Collective last September; it already has 3,000 members. The product symbol is one goal—”an overwhelming majority of women (82%) are more likely to buy from companies owned by other women, if they only knew who they were,” Minkoff’s website says—but another is to create a movement and support network.
“The goal is to have a directory of all these [women-owned] brands,” said Minkoff. “It will be a b2c [business to consumer] directory, and a b2b [business to business] portal for these companies to continue to help one another.”
The designer has also launched a partnership with Visa to help empower and educate female entrepreneurs. Today, which is International Women’s Day—March is also Women’s History Month—the Female Founder Collective and Visa’s She’s Next program, a global initiative, are hosting a series of workshops in New York City to offer women insights on how to grow their businesses. The collective and the She’s Next program plan to offer an array of resources and opportunities, “from streamlining payment methods to linking women small-business owners with like-minded peers and experts,” says Visa.
If you want to persuade management at your company to take action on a social issue, you need to make the business case for it. That’s the current thinking, at least. But you might do just as well—or better—by making the case that it’s the right thing to do, especially for your particular company, a new study has found.
Four management professors interviewed more than 400 U.S. employees across several organizations, asking whether they had ever “spoken up to management about an important ‘social issue’ to try to create a positive change that they thought would benefit others or society.” Of those who did, the researchers asked them about their approach and how successful they were in gaining company support.
The findings were consistent—and against the conventional wisdom. “We found that economic language was never significantly related to effectiveness—managers were no more or less likely to devote time, attention, money, or other resources to address the social issue when the employee made a business case,” the researchers wrote in Harvard Business Review.
Using moral language in general was no more helpful. “However, we found that when employees used moral language and framed the social issue as part of the organization’s values and mission, they were far more successful. By tailoring the moral message to also fit with something perceived as legitimate—what the company stood for—it provided cover, license, and an impetus for the manager to put energy into working on the social problem,” the professors wrote.
In recent years, when companies have addressed a range of social issues, from diversity to sustainability, they’ve made the case to their stakeholders that it’s not just about doing good, but about the bottom line. That may well be true, especially for companies taking the long view. But the new research shows another apparently effective way to persuade managers, and in the HBR piece the researchers offer employees several important takeaways on how to make change happen at their companies.
When the Coca-Cola Co. announced last week that it plans to buy back 150 million of its shares, it joined an epic buying spree by U.S. corporations. In 2018, companies announced plans to buy back more than $1 trillion of their outstanding shares, a record total. And the momentum is continuing this year.
The goal is to boost their share prices by taking some of their stock off the market, which is generally good news for stockholders, including the executives of those companies. In fact, the buybacks are a key driver of the stock market’s current surge. But the buyback binge now faces a backlash from elected officials on both sides of the aisle, who say that the practice rewards asset-rich investors but fails to benefit the vast majority of Americans.
Senators Chuck Schumer, a Democrat from New York, and Bernie Sanders, an independent from Vermont, raised the battle flag earlier this month with an op-ed piece in the New York Times, declaring that in recent decades “corporate boardrooms have become obsessed with maximizing only shareholder earnings to the detriment of workers and the long-term strength of their companies, helping to create the worst level of income inequality in decades.”
Between 2008 and 2017, the senators said, “466 of the S&P 400 companies spent around $4 trillion on buybacks, equal to 53% of profits.” By giving so much to shareholders, the companies failed to reinvest those profits in research and development or better wages and benefits for their workers. In fact, some companies including Walmart and Wells Fargo have announced stock buybacks even while planning to lay off thousands of employees.
As a remedy, the senators said they plan to introduce legislation that will “prohibit a corporation from buying back its own stock unless it invests in workers and communities first, including things like paying all workers at least $15 an hour, providing seven days of paid sick leave, and offering decent pensions and more reliable health benefits.”
Within days, Republican Senator Marco Rubio launched his own plan to curb stock buybacks. His legislation would end the preferential tax treatment given to stock buybacks, in which profits are taxed as capital gains rather than as dividends. “We have too often failed to make the well-being of working Americans the terms for market success,” Rubio wrote in a report from the Senate Small Business Committee, which he chairs.
One reason corporations are pouring money into stock buybacks is that afters years of strong economic growth, they’re awash in profits. “Companies often don’t know what to do with their excess cash,” wrote David Kelly, chief global strategist for JPMorgan Funds, in his weekly report for investors. But, as CNN reported, he thinks a clampdown would be a mistake. “It is far more efficient to let companies distribute the cash rather than encourage them to invest in areas that seem less profitable,” he wrote, adding that “it is unnerving to see politicians from the left and right once again attack corporate greed as the source of all the nation’s problems.”
Proposals to clamp down on the buybacks fail to appreciate a key economic function they provide, wrote Shawn Tully in Fortune. “Repurchases channel corporate earnings from old-economy stalwarts lacking profitable places to reinvest the cash to the industries of the future,” he argued. “It’s the cash distributed by a P&G or GM that, through this fluid ecosystem, funds expansion in fast-growers hungry for capital, in areas from cloud-based services to e-commerce distribution centers to electric cars.”
No less a sage than Warren Buffett came out in defense of stock buybacks last week in his widely followed annual letter, saying that his company Berkshire Hathaway plans a significant buyback. But he cautioned that such repurchases have to be done in a disciplined way. “Obviously, repurchases should be price-sensitive: Blindly buying an overpriced stock is value-destructive, a fact lost on many promotional or ever-optimistic CEOs,” he wrote.
How will the political debate shake out? In an editorial, the Washington Post proposed that “government should intervene subtly, if at all, and certainly not with the regulatory sledgehammer” proposed by Schumer, Sanders and other legislators. “Critics of stock buybacks are saying, in effect, that elected officials or regulators may know better than companies themselves what should be done with extra cash. It is far from clear that this is true, given that we have just gone through a long period in which both stock buybacks and job creation grew,” the Post‘s editors wrote. “Best for Congress to make sure there really is a serious problem before trying to legislate a solution.”
On the surface, many millennial workers seem to be all hustle and bustle, a generation of strivers, with work as the center of their belief systems. But underneath, are they actually leading lives of quiet desperation?
That question is the focus of two influential stories this month that have pulled back the curtain on workaholism as an aspirational lifestyle. In her story, “Why Are Young People Pretending to Love Work?,” New York Times tech writer Erin Griffith identifies the chief glorifiers of toil culture, including the co-working juggernaut WeWork. From their point of view, she writes, “not only does one never stop hustling—one never exits a kind of work rapture, in which the chief purpose of exercising or attending a concert is to get inspiration that leads back to the desk.”
Griffith portrays hustle culture as kind of a swindle, in which the folks at the top of the pyramid exploit the general hunger for meaning in our society to create a cult around the workplace. “In San Francisco, where I live, I’ve noticed that the concept of productivity has taken on almost a spiritual dimension. Techies here have internalized the idea—rooted in the Protestant work ethic—that work is not something you do to get what you want; the work itself is all.”
Why are millennials particularly vulnerable? Griffith cites a recent piece by BuzzFeed News Reporter Anne Helen Petersen, “How Millennials Became the Burnout Generation,” in which Petersen asserts that millennials have been running scared practically their whole lives, driven by their own high expectations and those of their parents.
As students, they “were convinced that their first job out of college would not only determine their career trajectory, but also their intrinsic value for the rest of their lives,” she writes. Later in the workforce, they struggle to prove that it was all worth it by working ever more strenuously and efficiently, but they never arrive at a finish line. “Exhaustion means going to the point where you can’t go any further; burnout means reaching that point and pushing yourself to keep going, whether for days or weeks or years,” Petersen writes.
Petersen offers no dramatic plan of action to fix the problem, but sees it as a partial explanation for why “so many millennials increasingly identify with democratic socialism and are embracing unions: We are beginning to understand what ails us, and it’s not something an oxygen facial or a treadmill desk can fix.”