Toyota's Image Re-Building: The Start of a Long Haul

The headline from the past two days of Toyota testimony before Congress is clear. Toyota has finally shaped and disseminated a message of corporate contrition: we grew too fast, focused on revenues and profits instead of quality control and the customer, and we forgot what got us to the top in the first place.

But corporate messaging aside, predicting the outcome of the crisis for the world #1 carmaker remains dicey. Here are some thoughts on the Toyota testimony from the past two days:

1. Toyota was well advised that the Members of Congress were the stars. Toyota executives did not attempt to upstage elected officials. They knew this was political theater.

2. The apology from Mr. Toyoda to individual customers and their families appeared sincere, but did not give any additional information or ammunition to the plaintiff attorneys. Apologies are not admissions of facts. Still, for one of the most powerful Japanese executives in the world to apologize to the public in person before another country's governing body is a powerful statement given that country's traditional culture of organizational pride and personal accountability.

3. The pledges to do better also appeared to be sincere but the recent documents praising the victory in dodging U.S. sanctions for minimizing recalls were very scarily damaging.

4. It's unclear what impact the hearings will have on the audiences of existing customers and potential customers. Customer decisions will depend on whether the "fixes" work and when and if the bad news stops.

5. There did not appear to be any "Japan bashing" from the US lawmakers. Reasons: Toyota has worked hard to integrate itself into the U.S. Its American workforce and its impact on domestic suppliers is significant. Furthermore, lawmakers - despite the government ownership of GM and Chrysler - have no inordinate love of U.S. owned auto makers. Toyota played the Congressional game the way any domestic company would. Asking why the early memo and signals of problems weren't communicated to the U.S. subsidiaries was more questioning of corporate communications incredulity than any xenophobia.

For the moment Toyota may be stabilizing its seriously damaged corporate public image. But the automaker still stands on shaky ground. Fixing mechanical problems will only be part of the next challenge. Rebuilding confidence in its products, and regaining the loyalty of customers, dealers and suppliers is going to be a much longer haul. My biggest question: What impact does this continue to have on the next generation of auto buyers? The current ones wouldn't buy their parents Oldsmobiles. Will next gen buy a Camry or a Lexus just because it was in the driveway?

What do you think? Has the corporate image band-aid worked? Will it translate into renewed trust in the Toyota brand and its products?

Why Toyota is Not Tylenol: Victim, Villain or Vindicator?

In 1982, I was privileged to work with Johnson & Johnson during the first Tylenol crisis. I was asked to prepare CEO James Burke for the critical "60 Minutes" interview that was a key component in communicating the comeback strategy for the brand and the company. I also worked with other senior executives who fanned out to local markets throughout the US to create a local presence in key cities. Other than SARS and 9/11, I can't think of another crisis that matches the unique circumstance of Tylenol. This is because J&J and its Tylenol brand did nothing to cause this crisis. In almost all other crises, there is an aspect of what lawyers call contributory negligence to the events. No company or organization willingly causes a crisis.
However, most of the time, there is an event that precipitates the crisis.

Due to the size and scope of its current crisis, some are comparing Toyota to Tylenol. I don't believe there are many comparisons. Please read the analysis of Toyota vs. Tylenol that appeared in PRNews Online. http://bit.ly/dwZ1gv

Tylenol vs. Toyota

Tylenol vs. Toyota

Toyota's January 2010 massive recall and sales stoppage of vehicles has been quickly compared to the recall by Johnson & Johnson of Tylenol in 1982.

Most of the similarities are in the enormity of the recall and the proactive nature of the effort. However, there are more differences in the nature of the problem and the current similarity than there are similarities.

SIMILARITY:
Similar to J&J, Toyota is going beyond what it may legally be required to do in recalling vehicles. J&J went further than what was required by the FBI to pull products from the shelves. Toyota is getting a big splash from total sales and production stoppage.

DIFFERENCES:
Tylenol was a different product, a different situation and a different environment. The difference between Tylenol's facts - and perhaps including SARS and 9/11 as crises - is that there was no "contributory negligence" on the part of the brand or J&J. While no product manufacturer ever wants to have a problem or defect, the fact is that TOYOTA did something that caused the problem. In the case of Tylenol, these were well made tablets that "someone else" tampered with. No one at J&J has ever been accused of doing anything wrong.

And of course, the media world is profoundly different from 1982. While J&J didn't think so at the time, the company had a relatively easy time of controlling the story and the message. The media was print, radio, TV and advertising. Now, it's the kitchen sink, with YouTube, chat rooms, Twitter and blogs the most difficult to control. J&J was hampered by not having a web site to post its information, Toyota is using its http://www.toyota.com/ for releasing information. I'm personally a bit surprised at the relatively small size of the button on the home page.

One more item. During Tylenol, J&J Chairman Jim Burke was the face of the brand and the company. So far, no one from Toyota has emerged to give this terrible event a human dimension. In addition to the web site, I'm surprised that Toyota is not using its YouTube channel with even a brief statement. Now that the crisis has gone global, it would be appropriate to have a faces of the company and post in many languages to reach more customers.

How do you think Toyota is doing?

Power of LinkedIn Groups for Entrepreneurs and Communicators

Here's an ongoing case study of a great use of LinkedIn Groups that solves the entrepreneur's issue of where to go for inputs and advice.

I say ongoing because fellow professionals are still chiming in with advice.

Here's the issue: A solo PR practitioner has a delicate and challenging crisis situation. The details are less important than the concern that unless handled well, the situation could get blown out of proportion through media coverage, negative blogging and community activism.The practitioner doesn't have 4 partners down the hall to brainstorm with, so she put out a request on a LinkedIn PR group for help ASAP. Unlike too many LinkedIn postings which are paper-thin marketing pitches, this one was a genuine request.

Over the past 18 hours I've seen 20+ thoughtful responses, with both analysis and practical suggestions. The responses refer to each other and build into real consultative help for the practitioner. Here's a sample of what the requesting PR person wrote to her colleagues: "You are all amazing! I'm sending a few of you private responses to your questions...We now have solid plans in place for just about every situation we can think of. I can't thank you all enough."

Seems to me this is the essence of what social media - especially among professional communities - is supposed to be about: less self-promotion and more genuinely useful conversations that leverage the knowledge and skills of a particular online professional community. As professional communicators, that's something to remind ourselves about the next time no one responds to a LinkedIn posting.

Anyone else with such a good experience with LinkedIn?

Tiger and the White House Party Crashers

Tiger Woods was the best thing that happened this week to the still nearly-famous (will they soon become infamous?) Michaele and Tareq Salahi, the Virginia reality-TV aspiring couple who "crashed" the White House state dinner last week and didn't show up when invited for Congressional testimony.

First Tiger. He didn't know, forgot or wasn't told: Get it over early. The sin is rarely the deed, it's almost always the cover-up. His belated apology and statement took the heat off...temporarily. Next time he tees off at a tournament watch out for a few errant golf shots aimed at the press. Long term damage to Tiger the Golfer and Brand Tiger and is unclear. In a game known to be as much about mental discipline as physical prowess, will Tiger be able to focus as much on the dimpled white ball? For the Tiger Brand, as a private public figure, Tiger's prior great reputation is helping him now.

Second, the Salahi's, who can't seem to retreat from the news. Let's look at the other involved parties (sic). Start with the Secret Service, which has been candid and forthright with owning the problem: "Bottom-line: We're responsible. It could have been very easy to make a phone call or get on a radio and verify if someone was on a list. This is still our responsibility as we've said from the beginning," said Secret Service spokesperson Edwin Donavan.

Note to Tiger: If you make a mistake, direct and rapid acceptance of blame, works. According to media reports, the security breach occurred when Secret Service personnel at a first check point thought that the Salahi names would be checked at a second check point. Playing the game of "Alphonse and Gaston" with security - even with a crush of well dressed party goers - is not acceptable.

Crisis response is also about what did you learn? Assume that there has been analysis among the President's protective detail there will much tighter controls for anyone getting into the White House for any occasion.

The White House Social Office is also in a higher state of Crisis Response. Reportedly, in the Bush administration there would have been a staffer at every entrance with the social list (and perhaps photos of guests) comparing notes with the Secret Service. At the entrance used by the Salahi's, no one from the social office double checked the names on the invite list. Columnists have been having a field day about the social office being more concerned with being scene at the State Dinner than doing the quasi-security job.

As to the Salahi's, aka "Facebraggers" for using Facebook to post their photos, we still don't know where their saga will end. The Washington press has been replete with stories about their personal lives, efforts at social climbing, family feuds and debts. They are vehemently claiming that they were invited to the ball but decided once again not to prove the claim when asked by Congress to tell their saga. And the MO is all about playing the American celebrity game and trying to get paid for their appearances in the news to tell their story. Stay tuned, PT Barnum will probably raise his head and there will be a media sucker who can't resist the habit for the "exclusive". Then we’ll have the crisis of the press that pounds on the media that gets the exclusive (and bemoans the ratings hit).

Arrested for NOT Tweeting?

Will they be flexible?

This week, the U.S. Food and Drug Administration will hold a public hearing on Social Media. The formal name of the hearing is Promotion of Food and Drug Administration-Regulated Medical Products Using the Internet and Social Media Tools (http://edocket.access.gpo.gov/2009/E9-22618.htm).

Catchy name huh? But there's hope in the government speak. We all know how the internet and social media have dramatically changed our lives. They have provided access to information, research and data for patients and caregivers. We can be much better informed on almost all aspects of health and wellness.

Yet this explosion scares regulatory agencies such as the FDA. The Agency has enough on its plate with drug approvals, monitoring what's being used, tainted products like peanuts and spinach, dealing with approved marketing and promotion of products within label.

The hearing is the hottest ticket in DC this week. Only 60 speakers allowed, and 800 people asking for seats in an auditorium that only seats 300. From what we've heard, the FDA first wants to listen to different views - ranging from large pharmaceutical and medical device companies and their associations, to Google and Yahoo, to web site and content developers. The first day is more general, the second day is more focused on Adverse Events. After the hearings, the speakers will also add comments for the record. If you can't get there go to http://www.fdalive.com/webcast.cfm for the streaming video.

We believe that if the FDA decides it needs to create rules for social media, they should be as flexible as possible to accommodate technological changes and new applications. For example, if FDA had created rules last year, the Agency would already need to adjust due to the explosive growth of Twitter.

Here are some of the questions that FDA must grapple with:

If the Centers for Disease Control (CDC) can use Twitter, Facebook and other social media to communicate info on public health issues such as H1N1, why can't regulated drug and device companies use the same technology to communicate (perhaps with links to ensure fair balance)?

To what extent are companies responsible for technologies such as Sidewiki which make it look like information next to the company or product site might be viewed as company sponsored information? We doubt the FDA would risk a fight with Google and try to ban such web innovations?

How can Social Media help companies do a better monitoring AE's (adverse events) for their products?

Should companies be required to monitor the entire web for any mentions of their product?

We hope it's an informed and open discussion that helps FDA provide proper control and guidance for regulated products in a Wild West world.

Visit http://bit.ly/MWy5w for our Video blog on this subject.

Separating the CEO from the Brand - Better Luck Separating the Wet from the Water

Whole Foods tries to manage potential fallout from CEO John Mackey's Wall Street Journal OpEd on ObamaCare.

Last week, the often outspoken John Mackey, CEO of Whole Foods, wrote an OpEd piece in the Wall St. Journalopinion criticizing the President's public health initiative. He went as far as to declare that healthcare is not a right any more than food and shelter are rights for Americans.

This week, spokesperson Libba Letton, said the company was responding to emails about Mackey's article. "We're trying to explain that it was intended to be a personal opinion and not on behalf of the company."

Good luck!

The CEO of a company is always inextricably linked to the brand. What ties Mackey even closer (if that's even possible) are two factors: First, he is known for speaking frankly and "from the hip." Second - and specifically in this instance - Mackey sites several Whole Foods examples to prove his points on healthcare reform.

It may be too early to tell the extent of the fallout. Several groups have tried to organize consumer boycotts of the company.Those who follow the company and industry closely also expect these efforts to have some impact. Robert Passikoff, branding expert and founder of Brand Keys Consulting said: "Whole Foods has a particularly large segment of consumers who have a politically liberal tendency. That group looks at Whole Foods as a liberal brand. For them, this is now an issue of brand dissonance."

Michelle Chang, an analyst with investment research firm Morningstar boldly states: "Any concern about its image would damage sales heavily."

The general public may either strongly disagree with or align themselves tightly to Mackey's opinion. Marketing, branding and communications professionals may offer conflicting advice. And some industry analysts may predict deep loss where others say it'll barely impact the company at all. But one thing all will agree on is that what a CEO says reflects directly on his/her company.

We wonder if Mackey will ever learn - or wants to. It is nearly two years now since Mackey was "outed" for anonymously posting disparaging blog and Yahoo bulletin board entries about his competitors, namely, Wild Oats. His own communications team was forced to admit that was a blunder, banned such postings and revised policy. What will they do now?

What is your opinion? Do you believe there is any way for the CEO's opinion to be separated from the brand? What advice would you give Mr. Mackey and what precedents would you site?
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Check out: CNNMoney.com's article: Whole Foods sweats CEO's health care manifesto at: http://tinyurl.com/kpqlv8

Robert McNamara's PR Rule

GM Bankruptcy

If GM could convince drivers to buy cars as well as they communicated this week, the auto maker would come out of bankruptcy quickly.

From CEO Fritz Henderson, to UAW President Ron Gettelfinger, to other executives, to the rank and file, as awful as the bankruptcy filing was this week, GM spokespersons were consistent and united in their statements about a new GM. In full page ads, Henderson asks the public to follow the company http://www.gmreinvention.com/ GM sent letters to customers assuring them about quality and warrantees.

As David Leonhardt pointed out in the NY Times many of these promises of GM rebound have been made before. One of the questions is whether the public believes the company and will actually come back and buy, OR whether the younger generation of buyers - who have yet to be enamored with GM and who don't read the main stream media as much and see the ads - will put the GM vehicles on their desired purchase list.

Yes, the Harbor and JD Power reports do show that initial and long term quality has improved at GM yet, while the factual and statistical gaps between GM and the competition have shrunk, the perception gap has not changed very much.

What do you think? Do you think that GM can close the perception gap so that car buyers will consider Chevy, Cadillac, Buick and GMC in the same way that they think of other cars and trucks? Car buying is both a financial and emotional purchase. Can the turnaround hit us in the hearts and imagination, not just in the pocketbook?

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