Toyota: Gold Standard in Crisis Mis-Management

Posted on February 3, 2010 by 6 Comments

It’s no secret to anyone at this point that Toyota has made a mess of the reputational management issues stemming from their gas pedal problem. (Fun Fact: Toyota CEO Toyota Akio Toyoda drove away from his brief media encounter last week in a big black Audi).

And Tuesday their problems seemed only to get worse.

The morning started with a full page open letter to customers in the New York Times, stating that the company is “truly sorry for the concern our recalls have caused.”

Note to management (and the attorneys who worked over your ad copy): People are not concerned about your recall. They are, however, worried about their families dying in a flaming car wreck because the gas pedal was stuck to the floor.

The day went sharply downhill from there, when Jim Lentz, CEO of Toyota Motor Sales USA makes his first public appearance opposite Matt Lauer on the Today show this morning. It’s hard to do this interview justice; you really need to watch it for yourself to see one misstep unfolding after another.

Here are some things that might have helped you:

  1. Splitting hairs between the sticky-pedal problem and the pedal-stuck-under-floor-mat problem is really not the way to answer the what-did-you-know-and-when-did-you-know-it question. Really.
  2. Do not under any circumstances repeatedly refer to the floor mat issue as the “entrapment” problem. This is not effective framing when crushed metal and fire are foremost in customers’ minds.
  3. Do not say that “the number of deaths, the number of accidents, whether it is one or two thousand doesn’t really make a difference.” (This may have started as a talking point about how much the company cares about each one of its customers, but it didn’t end that way.)
  4. Do not present a timeline that has already been contradicted not only by federal regulators, but also by the company’s own previous public statements. People will notice.
  5. When asked if it might be an electrical rather than mechanical problem (as many fear), do not simply assert without any explanation that you are absolutely “convinced” and “confident” that it isn’t. Even your body language is cocky here. And that’s just what you said about the floormats.
  6. Do not wait until three quarters of the way into your interview to deliver what should have been the very first words out of your mouth: “I drive a Toyota. My family drives Toyotas,” and that you are just as concerned about this as anyone.
  7. Do not expect a softball interview just because you’re being interviewed by Mr.  Nice Guy. Sarah Palin learned this from Katie Couric. And when moms and kids are involved, morning TV will go rougher on you than Mike Wallace ever did. Be ready for it.
  8. Do not keep answering the questions about how this impacts your reputation. Ignore the Wall Street Journal chattering about your stock price and marketshare. Right now, your only concern is the millions of families out there worried about how they’re going to get to work tomorrow.
  9. Finally, think about whether you’ve got the right talker, one who might convey at least a whiff of compassion. Neither the corporate structure nor the culture at Toyota lends itself to charismatic American-style executive leadership. But you need somebody who can be the confidently contrite face of this crisis going forward. Start asking around; she’s around there somewhere.

Here’s how the message might have gone:

  • “My own children ride in Toyota vehicles every single day. Believe me when I say I am just as concerned about safety as any other parent.”
  • “In retrospect, it is clear our testing did not find the right problem in time.” [This will not come as a surprise to anyone at this point, including your lawyers.]
  • “Toyota has always stood for quality. In this case, we had too much confidence in our systems.
  • “Even our engineers did not understand the full scope of the problem until too late.” [This is your attempt to escape endless back and forth on timelines. It may or may not work.]
  • “That is something we deeply regret. We do understand the frustration and the serious concern that people have, and we are doing everything we can to make sure that it never happens again.”
  • “We have also invited Independent Experts in to help us make absolutely certain this is a mechanical problem, not an issue with the electronics. These Experts and our own engineers have tested it and retested and retested it again. Just to make sure, we will also be checking and upgrading software on every car.”
  • “As for the families all over America wondering what to do now, we are providing vouchers you can use at your local car rental agency to get you the transportation you need until we can fix your car.”

And while you’re at it, make a deal with NBC to bring a crew out to your safety lab to show them what you’re doing — and to meet the capable, talented people doing it.

Of course, all of this might or might not have prevented a disgruntled customer from accidentally accelerating his Toyota Tundra right through the showroom windows of a Louisiana dealership yesterday after the manager explained they could not give him a refund on the truck (police reportedly “found no evidence the incident was intentional”).

It probably does not help you with the fact that no less a viral subject than Steve Wozniak himself complained that he has been able to replicate the *electronic* acceleration problem in his Prius (which was not on the recall list), and that it has been impossible to get anyone at Toyota or in Washington to respond.

The irony is all this is that back home in Japan, the company is starting to be getting it right. But it’s happening eleven time zones away, and in Japanese. From the Wall Street Journal online Tuesday afternoon:

“In the first detailed comments by a Japanese headquarters executive since the recall and sales and production halt were announced last month, Toyota Executive Vice President Shinichi Sasaki told reporters in Nagoya, Japan, that the company may not have done enough to look at how parts interact with each other, and how that could cause system failures.

It was a remarkable admission after a remarkable week for a company that has long prided itself as setting the global design and manufacturing standard for quality control.

Mr. Sasaki began the press conference bowing deeply and offering an apology to Toyota’s customers. Appearing alone before a crowded room of reporters, he repeated over and over throughout the press conference the phrase “okyakusama dai ichi” — “customer first” — a concept that Toyota has widely been accused of forgetting as it pursued rapid global expansion.”

It should not have taken a month from when the story broke for this to happen. As we have seen time and again, communications crises like this do not ever end until the company or individual at the center of the storm begins to own the responsibility.

Toyota should also understand that every plaintiff’s lawyer in America is already coming after them on this. How badly it ultimately hurts from a legal standpoint is going to be decided over a very long time based far more on whatever turns up in discovery than anything said now. And somebody from Toyota  is likely to wind up sitting in front of a congressional committee.

But the damage they are doing to their reputation by appearing to bob and weave is instantaneous, irrefutable, and very long lasting.

Tiger Woods and Image Reputation

Posted on December 3, 2009 by Comments Off

Tiger Woods and Image Reputation

Torod Neptune & Michael Lock

Once considered the world’s most marketable athlete, can Tiger Woods’ seemingly invincible reputation survive a media onslaught over his recent “accident” debacle? Woods, who has built up a strong reputation of being a clean-cut, all-around generous athlete, is learning quickly that his image and reputation alone do not automatically exempt him from media scrutiny.

Since Woods used media to build and leverage his clean image, he cannot expect to receive any preferential treatment without first addressing the controversy head-on. By not addressing the issue immediately and frankly, the media has no other option but to pry, inquire, and speculate on the reasons as to why Woods is dithering.

Had Woods come clean right from the beginning, given his seemingly invincible image, he would have been able to dictate the media coverage and control the conversation of the story. From skipping numerous interviews with authorities to cancelling all his appearances at his namesake tournament, Woods is backing himself and his once untouchable reputation into a very tight corner.

Jon Friedman sums the public’s discontent with Woods’ reluctance to come clean; “What we detest, more than anything in the world, is the appearance of a cover-up. When people try to cover things up, we feel duped. We feel snookered. We feel betrayed. And we don’t like it — and we invariably have the last word.”

The lessons from Woods’ situation are the cornerstones of any successful and well-executed image reputation strategy.

  • Don’t hesitate to act – There is a small window of opportunity where admitting fault or guilt will do the least damage. By not acting immediately and by withholding details, you allow the media to speculate and spread false rumors that only resonate louder with each passing second.
  • Dictate the conversation – By choosing to address a situation directly and personably (in Woods’ case, a direct statement from himself), you can dictate the conversation in the media coverage and control wild speculations or conspiracies.
  • Be honest – Choosing not to disclose certain information is a right of privacy, but leaving out certain information or not disclosing certain events, however, only fuels controversy. Coming clean about a situation, no matter how damaging, can be better in the long run than trying to cover-up facts and being exposed later.

While Woods has since released a personal statement, could this be too little too late? The media is already saturated with salacious rumors and claims of wild affairs involving Woods. The statement did come from Woods himself, but the lack of details and disclosure is doing little to combat media speculation.

Woods has a right to privacy when it comes to his family and marriage, but as a public figure he cannot expect the media, which he leveraged to build his grand reputation, to simply take a mulligan.

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