3 Real Disasters That Teach Critical Project Risk Planning Lessons

By Sprintzeal

Published on Wed, 18 June 2025 11:37

Introduction

Imagine steering a small ship sailing across unpredictable waters. Since you embarked on a clear day, you didn't think of carrying a map, assuming the sea to be calm. Then, a storm hits out of nowhere. You have no idea how to navigate it. As panic sets in, you make poor decisions and run aground (or worse, sink). 

Now, imagine the same voyage with a weather forecast check, a map, extra supplies, and storm preparation. You can keep calm, follow your plan, and stay afloat. That's the beauty of risk planning in action.

It doesn't stop the storm; it surely keeps you from capsizing. The same holds in business, except we'll always have companies that fall into either group. Each has some crucial lessons to teach. 

This article will share three infamous examples of companies that put all their faith in sunny skies. Their tragic falls have critical risk-planning lessons that cannot be overlooked.

#1: The Boeing 737 MAX Crisis: Speed Over Safety 

You may have heard of the Boeing 737 MAX fleet being grounded a few years ago. Who would’ve thought that aviation’s triumph would sink to such lows? 

So, what exactly happened? It all started with two fatal crashes: 

- Lion Air Flight JT610 from Jakarta in October 2018- 189 fatalities
- Ethiopian Airlines Flight ET302 from Addis Ababa in March 2019- 157 fatalities

A software system called the Maneuvering Characteristics Augmentation System, or MCAS, was established as the culprit. Responsible for stabilizing the aircraft by directing its nose downward if the plane climbed too steeply, the system sounds smart, right? Here are the problems: 

- It relied solely on one sensor to make that call.
- When the sensor gave faulty data (which it did), MCAS was triggered, pushing the aircraft’s nose down repeatedly.
- Pilots were never even informed that MCAS existed, which means they had no way of overriding the system. 

Where Risk Planning Completely Failed 

- The company was in a rush to develop the 737 MAX just to keep up with Airbus.
- The new model was marketed ‘just like the older version,’ implying that pilots did not have to retrain.
- As a result, the role of MCAS was downplayed, and it was not even mentioned in the pilot manuals. 

To top it all off, the Federal Aviation Administration (FAA) permitted Boeing to perform some of its own safety certifications. In hindsight, this was a disaster in the making. 

One crucial miss in risk planning cost Boeing billions (in losses and settlements) and its reputation. Even the CEO had to step down. 

Lessons to Remember 

- Never rely on just one sensor or assumption.
- Be transparent, since people can't prepare for what they don't know they're dealing with.
- Rushing to market is not worth it if safety takes the backseat. 

Despite all this, a Boeing 737 MAX 9 passenger jet (Alaska Airlines Flight 1182) lost a rear door plug, causing uncontrolled decompression in January 2024. Traced back to manufacturing defects, the entire fleet sits grounded again. Boeing doesn't seem to have learned its lesson yet, but it's wise to learn from others’ blunders, right? 

#2: Ethylene Oxide Lawsuits: The Cost of Environmental Oversight 

Each year, more C-suite executives and corporate functional leaders realize the role of ESG in gaining a competitive edge. In a 2024 survey, 71% of the respondents shared this sentiment compared to 60% the year prior. 

Environmental risks are huge, and they almost always feel distant until they land on someone’s doorstep. That's exactly the story of several US communities located near industrial plants that used ethylene oxide (EtO). This flammable gas or chemical helped sterilize medical equipment, in particular. 

TorHoerman Law shares how, over time, cases of cancer were being reported. They opened the legal floodgates, alleging that long-term exposure had serious consequences. September 2022 marked the month of the first trial, held against a company called Sterigenics. 

Where Risk Planning Completely Failed 

- Internal documents and expert testimony in the ethylene oxide lawsuit revealed that the company never factored in the long-term repercussions of uncontrolled EtO emissions.
- Outdated regulatory standards were being used for compliance. Risk managers failed to anticipate regulatory shifts and changing public sentiments.
- Companies never engaged with affected communities or treated them as stakeholders in the risk process. This showed a major lack of transparency and accountability.
- There was no scenario planning in case of a reputational or legal fallout. When the lawsuits piled up, many companies were caught flat-footed. 

Lessons to Remember 

- Compliance does not automatically become synonymous with risk planning. Go beyond what's required today and prepare for what may go wrong tomorrow.
- The harm caused by EtO built up slowly and quietly over the years. So, risk planning should look past project timelines and quarterly goals. Think about what might surface long after the project is done.
- Before the lawsuits made headlines, there were warning signs that were ignored. When people raise concerns, especially the internal teams, listen and take action.
- Stakeholder engagement is not just PR; it's a risk shield. Build transparency and feedback into the risk planning process from day one. 

#3: Wells Fargo Account Scandal: Culture As a Hidden Risk 

An incident that came to light in 2016 will likely hold lessons on risk management and leadership accountability for the ages ahead. The Fargo scandal was a financial and ethical controversy as the company’s employees opened millions of fake bank accounts in their customers’ names. 

It unfolded over several years and included nearly 3.5 million accounts, unwanted credit cards, forged signatures, and insurance fraud. All of this was driven by internal performance metrics that emphasized cross-selling at all costs. 

If you're thinking that the root cause was merely ‘bad apples,’ that's not the whole story. A toxic risk culture and a lack of oversight also played crucial roles in this disaster. On one hand, employees struggled to meet unrealistic quotas. On the other hand, whistleblowers were ignored or punished. 

As for the senior executives? They either didn't know or didn't want to know what was happening. Wells Fargo paid the ultimate price, first in $3 billion to regulators. Gradually, all its executives had to resign or were fired. The Federal Reserve even placed a cap on the company’s growth until it cleared its act. 

Where Risk Planning Completely Failed 

Let's look at the critical areas where Wells Fargo’s risk planning collapsed: 

- The cultural risk was ignored as opening fake accounts was simply a survival strategy for burnt-out employees.
- Instead of listening to whistleblowers, the company retaliated against or fired them.
- There was no plan for misaligned KPIs. The company was obsessed with meeting sales targets. 

Lessons to Remember 

- Think beyond technical or financial metrics, and consider ethical and cultural risks.
- Create space for employees to safely report issues. Also, have a clear process to act on the concerns.
- Evaluate how a project may perform in light of media scrutiny, public perception, and social backlash. 

In its 19th Edition of Global Risks Report, the World Economic Forum (WEF) has already blown the trumpet. In the coming years, all manner of risks lurk on the horizon, be it environmental or technological. 

Since economic uncertainty is expected to weigh heavily across all markets, risk planning cannot be an afterthought. Are you ready to hit the ground running? Only companies wise enough to avoid the pitfalls of such poor models will thrive. 

Table of Contents

• Introduction
• #1: The Boeing 737 MAX Crisis: Speed Over Safety
• #2: Ethylene Oxide Lawsuits: The Cost of Environmental Oversight
• #3: Wells Fargo Account Scandal: Culture As a Hidden Risk

Introduction

Imagine steering a small ship sailing across unpredictable waters. Since you embarked on a clear day, you didn't think of carrying a map, assuming the sea to be calm. Then, a storm hits out of nowhere. You have no idea how to navigate it. As panic sets in, you make poor decisions and run aground (or worse, sink). 

Now, imagine the same voyage with a weather forecast check, a map, extra supplies, and storm preparation. You can keep calm, follow your plan, and stay afloat. That's the beauty of risk planning in action.

It doesn't stop the storm; it surely keeps you from capsizing. The same holds in business, except we'll always have companies that fall into either group. Each has some crucial lessons to teach. 

This article will share three infamous examples of companies that put all their faith in sunny skies. Their tragic falls have critical risk-planning lessons that cannot be overlooked.

#1: The Boeing 737 MAX Crisis: Speed Over Safety

You may have heard of the Boeing 737 MAX fleet being grounded a few years ago. Who would’ve thought that aviation’s triumph would sink to such lows? 

So, what exactly happened? It all started with two fatal crashes: 

- Lion Air Flight JT610 from Jakarta in October 2018- 189 fatalities
- Ethiopian Airlines Flight ET302 from Addis Ababa in March 2019- 157 fatalities

A software system called the Maneuvering Characteristics Augmentation System, or MCAS, was established as the culprit. Responsible for stabilizing the aircraft by directing its nose downward if the plane climbed too steeply, the system sounds smart, right? Here are the problems: 

- It relied solely on one sensor to make that call.
- When the sensor gave faulty data (which it did), MCAS was triggered, pushing the aircraft’s nose down repeatedly.
- Pilots were never even informed that MCAS existed, which means they had no way of overriding the system. 

Where Risk Planning Completely Failed 

- The company was in a rush to develop the 737 MAX just to keep up with Airbus.
- The new model was marketed ‘just like the older version,’ implying that pilots did not have to retrain.
- As a result, the role of MCAS was downplayed, and it was not even mentioned in the pilot manuals. 

To top it all off, the Federal Aviation Administration (FAA) permitted Boeing to perform some of its own safety certifications. In hindsight, this was a disaster in the making. 

One crucial miss in risk planning cost Boeing billions (in losses and settlements) and its reputation. Even the CEO had to step down. 

Lessons to Remember 

- Never rely on just one sensor or assumption.
- Be transparent, since people can't prepare for what they don't know they're dealing with.
- Rushing to market is not worth it if safety takes the backseat. 

Despite all this, a Boeing 737 MAX 9 passenger jet (Alaska Airlines Flight 1182) lost a rear door plug, causing uncontrolled decompression in January 2024. Traced back to manufacturing defects, the entire fleet sits grounded again. Boeing doesn't seem to have learned its lesson yet, but it's wise to learn from others’ blunders, right? 

#2: Ethylene Oxide Lawsuits: The Cost of Environmental Oversight

Each year, more C-suite executives and corporate functional leaders realize the role of ESG in gaining a competitive edge. In a 2024 survey, 71% of the respondents shared this sentiment compared to 60% the year prior. 

Environmental risks are huge, and they almost always feel distant until they land on someone’s doorstep. That's exactly the story of several US communities located near industrial plants that used ethylene oxide (EtO). This flammable gas or chemical helped sterilize medical equipment, in particular. 

TorHoerman Law shares how, over time, cases of cancer were being reported. They opened the legal floodgates, alleging that long-term exposure had serious consequences. September 2022 marked the month of the first trial, held against a company called Sterigenics. 

Where Risk Planning Completely Failed 

- Internal documents and expert testimony in the ethylene oxide lawsuit revealed that the company never factored in the long-term repercussions of uncontrolled EtO emissions.
- Outdated regulatory standards were being used for compliance. Risk managers failed to anticipate regulatory shifts and changing public sentiments.
- Companies never engaged with affected communities or treated them as stakeholders in the risk process. This showed a major lack of transparency and accountability.
- There was no scenario planning in case of a reputational or legal fallout. When the lawsuits piled up, many companies were caught flat-footed. 

Lessons to Remember 

- Compliance does not automatically become synonymous with risk planning. Go beyond what's required today and prepare for what may go wrong tomorrow.
- The harm caused by EtO built up slowly and quietly over the years. So, risk planning should look past project timelines and quarterly goals. Think about what might surface long after the project is done.
- Before the lawsuits made headlines, there were warning signs that were ignored. When people raise concerns, especially the internal teams, listen and take action.
- Stakeholder engagement is not just PR; it's a risk shield. Build transparency and feedback into the risk planning process from day one. 

#3: Wells Fargo Account Scandal: Culture As a Hidden Risk

An incident that came to light in 2016 will likely hold lessons on risk management and leadership accountability for the ages ahead. The Fargo scandal was a financial and ethical controversy as the company’s employees opened millions of fake bank accounts in their customers’ names. 

It unfolded over several years and included nearly 3.5 million accounts, unwanted credit cards, forged signatures, and insurance fraud. All of this was driven by internal performance metrics that emphasized cross-selling at all costs. 

If you're thinking that the root cause was merely ‘bad apples,’ that's not the whole story. A toxic risk culture and a lack of oversight also played crucial roles in this disaster. On one hand, employees struggled to meet unrealistic quotas. On the other hand, whistleblowers were ignored or punished. 

As for the senior executives? They either didn't know or didn't want to know what was happening. Wells Fargo paid the ultimate price, first in $3 billion to regulators. Gradually, all its executives had to resign or were fired. The Federal Reserve even placed a cap on the company’s growth until it cleared its act. 

Where Risk Planning Completely Failed 

Let's look at the critical areas where Wells Fargo’s risk planning collapsed: 

- The cultural risk was ignored as opening fake accounts was simply a survival strategy for burnt-out employees.
- Instead of listening to whistleblowers, the company retaliated against or fired them.
- There was no plan for misaligned KPIs. The company was obsessed with meeting sales targets. 

Lessons to Remember 

- Think beyond technical or financial metrics, and consider ethical and cultural risks.
- Create space for employees to safely report issues. Also, have a clear process to act on the concerns.
- Evaluate how a project may perform in light of media scrutiny, public perception, and social backlash. 

In its 19th Edition of Global Risks Report, the World Economic Forum (WEF) has already blown the trumpet. In the coming years, all manner of risks lurk on the horizon, be it environmental or technological. 

Since economic uncertainty is expected to weigh heavily across all markets, risk planning cannot be an afterthought. Are you ready to hit the ground running? Only companies wise enough to avoid the pitfalls of such poor models will thrive.