Crisis Communications: Is Toyota Smarter Than It Looks?

UPDATE (Wednesday, February 10, 2010): Akio Toyoda (apologies for the earlier typo) has spoken, but Jim Lentz continues to be the front man. New recalls mount, but the U.S. arm of the company appears to be working its way out in front of the company's myriad communications challenges. See Digg Dialogg interview with Jim Lentz yesterday.

No way around it: Crisis communications is just plain hard. 

Toyota is finding that out. It’s uncomfortable, embarrassing and can have serious legal implications. It’s also critical, if you want to maintain a relationship with your customers, suppliers, channels, employees and regulators. After all, the goal of successfully managing a crisis is to still have a business when the dust settles. Communicate poorly, and you’re likely to have a big challenge rebuilding confidence afterwards.

Corporate history is rich with case studies of companies who’ve done well communicating during a crisis and those that have not. Tylenol, Wendy’s, Pepsi, David Letterman and (in my opinion) TVA are positive examples. Union Carbide, Exxon and Firestone are examples of those who dropped the ball. Toyota is sliding dangerously close to the “poor” list.

Toyota has by no means dropped the ball – yet. They’ve responded seriously and quickly. They’ve mobilized their extensive supplier relationships to find engineering and manufacturing solutions. Fixes are in the works. Toyota has, however, made one monumental mistake: they’ve not put their most senior official, Aiko Toyoda, on the front line.

A fundamental crisis communications rule is, generally speaking, “the bigger the crisis, the bigger the spokesperson.” I cannot think of a bigger crisis than a life-safety recall potentially impacting millions of customers in your company’s largest market. 

People want to drink from the head of the stream during a crisis. Example: This morning, Transportation Secretary Ray LaHood made the unprecedented statement that he is going to call Aiko Toyoda and demand his personal response on the company’s recall efforts. (seeBloomberg and others). The Wall Street Journal reports this morning that LaHood said, "This is very serious. After I talk with him [Toyoda], they'll get it.” Christian Science Monitor carried the story as well.

Being called out by the Secretary of Transportation is not good. Toyoda’s decision to send U.S. Sales president Jim Lentz to testify before Congress made the company look detached and unemotional about the situation. Not the message Toyota intended to send, and LaHood made it clear that Lentz’s presence was insufficient.

Momentum is building. BusinessWeek reports that about 100 Prius owners are starting to reporting brake problems. Normally, 100 customer complaints might garner note in social networks and possibly industry trade publications or a wire service. In Toyota's current environment, such reports are amplified, perhaps beyond their real significance. 

The point is this: Whether your company is multinational or regional in market scope, you have to engage a crisis on both a business level and a sociological level. Solving the actual problem only addresses half of the issue. Customers, channels, regulators and others need to know that you are aware of the human impact of the crisis, even while you’re not admitting responsibility or culpability. And, they need to see leadership from the appropriate level. (In case you’re wondering, yes, lawyers and PR professionals are used to working together in a crisis.)

Toyota is an exceptional company. They have made great products for a long time, and that did not happen by accident. My guess is that in the next 48 hours, we’ll see a different face for the company step forward.

tags: crisis communications, Toyota, media relations, public relations

Comments

[Jennifer Holder]

Excellent post, Robert, but I would expect no less :)