It looks like the crisis is managing Toyota rather than vice versa. The fact that Toyota has had to announce a second recall only days after the first one indicates an organisation that is responding to events rather than setting the agenda.
Compare this with Mattel, which managed a crisis of a similar magnitude, in , when faced with safety concerns about its toys. It announced an immediate recall and its chief executive Robert Eckert devoted weeks to communicating the steps the company was taking to address the issue. As a consequence, its brand remains strong. The issue of the company spokesperson is an interesting one.
Conventional wisdom dictates that the chief executive should be the face of the organisation in a major crisis. I would endorse this view, so long as the chief executive has the requisite skills to perform this role. No chief executive can be absent from the public eye when the business is in the middle of a crisis but this does not mean that the chief executive must be the main spokesperson. Watching Eurostar's chief executive, Richard Brown, fumble his way through media interviews when its trains broke down in the Channel tunnel over Christmas will have done nothing to protect the reputation of the organisation.
In neither case was it the right decision to field the top man. It is not necessarily the reality of how a business manages a crisis that will determine its fate. It's how the organisation is perceived to have managed the crisis: in many ways a crisis turns into a very public, very high stakes audit of management's competence.
Get it right and the organisation's reputation and value can be enhanced; get it wrong and serious — sometimes terminal damage — can result. Within this context, the role of the media spokesperson is pivotal, even in this age of social media. Observers draw conclusions based not just on what the spokesperson says, but also their body language, demeanour and tone of voice.
Many senior, successful businesspeople turn a whiter shade of pale when a camera or microphone appears under their nose: executives like these are unlikely to represent their organisation well in a crisis.
Even more importantly, they will be ill-equipped to communicate information clearly and simply to members of the public affected by the crisis. You are reading your last free article for this month. Subscribe for unlimited access. Create an account to read 2 more. Crisis management. Do you have the right processes in place to recognize and react to a crisis? Heineman, Jr. Read more on Crisis management or related topic Business communication.
There is no doubt that the media, especially with its focus on electronic problems as a possible cause of unintended acceleration, fueled public concerns about Toyota's quality problems and helped confirm in the minds of many, that Toyota has serious quality problems, With quality, consumer perception is all that matters and it means that Toyota has a huge challenge going forward.
Finally, what about the charge that overzealous regulators lie behind Toyota's problems? Others, like many in the Japanese media, lean towards conspiracy theory with the claim that the purpose of the recalls was to help "Government Motors," at the expense of Toyota. Even the venerable Asahi News , in a recent editorial, hints at this explanation. These critiques gained further currency with the publication of the January findings of NASA that they found no evidence that Toyota's electronic throttle control systems were at fault for unintended acceleration.
Moreover, NHTSA confirmed only two deadly crashes, the Saylor crash and one more, as a result of pedal entrapment and none for the sticky gas pedal problem. This being the case, the critics argue, there was no justification for the recalls.
Hindsight, indeed, provides incredible clarity of thought. In the period from October through February , there was utter confusion. Jeremy Awl, Chief Executive of Edmonds. At the same time, he stated that Toyota's recall might "not totally" solve the problem of sudden unintended acceleration in some of its vehicles.
This hardly inspired confidence. Toyota first claimed that pedal entrapment was the cause of unintended acceleration, then, more than three months later, added sticky gas pedals which "in rare instances mechanically stick in a partially depressed position or return slowly to the idle position. Clearly, they were still in a problem solving phase and couldn't entirely clarify matters.
During the period from October through March , many Toyota owners were at a loss of what to do or think. NHTSA seemed convinced that pedal entrapment was the primary cause and this explanation initially received play in San Diego newspapers. The Times discussed the details supporting pedal entrapment as the cause on Oct.
Lawyers for plaintiffs charging faults in Toyota electronic controls fueled the speculation. Most of the national press ignored or treated lightly the pedal entrapment explanation of the Saylor accident, so fixed were they on the possible electronic causes. Widespread diffusion of the NHTSA reason for the October recalls might have quieted a great deal of the public hysteria.
Ray Lahood, the secretary of transportation, added to public concerns with his statement on February 3, that Toyota owners should stop driving their cars and take them into dealerships. Despite his almost immediate clarification, damage was done. There is no evidence that this statement, however, was anything more than an ill-advised offhand remark.
For those critics who see it as a smoking gun proving government conspiracy , their standard of evidence is low indeed. All this was occurring at a time when every day seemed to bring another report of a driver with a terrifying runaway experience. This publicity spurred a flood of further complaints of unintended acceleration. NHTSA received some 9, customer complaints regarding unintended acceleration for vehicle model years: to Toyota accounted for some 3, of them well above what would be expected by their market share.
But at the time, it is easy to see how NHTSA officials concluded that waiting for more data would be an irresponsible decision, possibly endangering more lives.
The number of deaths caused by a safety problem is only one of the criteria NHTSA uses for pursuing a recall. In the end, given the confusion and uncertainty that prevailed, the recalls can be seen as a prudent decision.
It wasn't until the publication of the NASA report in early that the mystery was considered solved. What's being learned from this experience? Toyota is finding that the costs of losing their focus on quality are very high indeed and to their credit, they are implementing serious countermeasures. It is not clear the media have learned anything. Leading with unsubstantiated victim stories, and ignoring that driver error was a known important factor in unintended acceleration, was simply irresponsible.
Where was the due diligence of TV reporters and print journalists? No doubt, the hour news cycle, the rush to release tidbits of information and the pressure to make judgments based on those tidbits, facilitated sloppy reporting. Perhaps this is an example of what James Fallows referred to in the April issue of The Atlantic , as giving the public what they want and not what they need. A caveat not mentioned by Toyota defenders is that driver error can be enhanced by poor design.
As with many consumer products, it is increasingly expected of manufacturers that they design their products to minimize the probability of failure when consumers use those products in ways not intended by manufacturers. This is the new reality for all automakers, not just Toyota.
Yet, they have had years to study unintended acceleration; they should have learned something more useful in handling the recent events. They certainly should have had the courage to publicize the issue of driver error as a possible explanation much earlier than they did. They need a better understanding of how to release higher quality information in a way that insures public dissemination and inhibits public hysteria. If they could recall 3. NHTSA officials did testify to Congress to this effect but they could have done much more to reach out to the public.
This would allow comparisons across automakers and the matching of crashes on a database to identify common causes. A recorder which documented events at least 10 seconds prior to the crash would enable safety experts to move from a passive safety approach based on crash data to an active safety approach focused on prevention.
There are all sorts of political obstacles to achieving this objective but it is a worthy one. Finally, why is it so hard to get across the message to the public that people freeze up in crisis situations and can't remember what they did at such times?
What can be done to better educate the public on this reality? There is a study worth doing.
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