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
Assessing Mr. Toyoda's Role Through the Ongoing Recall Crisis at Toyota
As the recall at Toyota turns from a crisis to a long term saga that impacts the company's reputation, the company is finally doing many of the right things and trying to avoid missteps. The full-page advertisements in 20 national newspapers, the helplines and emails, the updates and webpage buttons are all well and good and necessary. While these efforts may be too late to pacify many disgruntled customers, dealers and stakeholders, apologies are finally coming from North America heads (namely North American CEO Jim Lentz) and other company spokespeople. CEO Akio Toyoda was even quoted as recently as this past weekend saying he was "very sorry" to a local Japanese auto trade publication.
But this is a saga, not a flash-in-the-pan crisis, which means that there will be much more to deal with. There will likely be lawsuits and other legal actions, uncountable criticisms, and now there will be a congressional investigation.
Communications professionals and advisors like us are particularly interested to monitor and discuss ways in which Mr. Toyoda should and shouldn't be utilized as the company attempts to weather this storm. The similarities and differences with the Tylenol crisis have been well established. But, how is the Toyota crisis different specifically regarding the CEO's role? How should the CEO be utilized differently than Johnson & Johnson's Jim Burke?
In July of last year, when Akio took over from his father, Shoichiro Toyoda offered some sage advice to his son. The new CEO was taking the wheel at a time of a global retrenchment of the auto industry and significant sales slump, even for this well-esteemed and trustworthy 70+ year-old company. At the same time, critics discussed how there had been a shift in focus from the customer and reliability to increasing volume, market share growth and profits. Shoichiro advised his son that he should consider these great challenges -both external and internal - as opportunities to emerge as an even stronger leader.
Just a few months later, the accelerator pedal problem is now a full blown crisis that threatens to hurt sales by over $1B, and cause immeasurable reputational damage.
So, how does a communicator assess and utilize Mr. Toyoda throughout this crisis? Is it time for Mr. Toyoda himself to speak on the national and local stages in the U.S., or is it better left to Mr. Lentz (http://tinyurl.com/yjkutsz) and others? Is Mr. Toyoda adequately skilled, articulate, and would he be embraced by a U.S. audience? Mr. Lentz has already posted at least two video updates on the Toyota YouTube channel, (http://www.youtube.com/toyotausa). Should that have been done by Mr. Toyoda or should his communication best be limited to a Q&A with a global business publication like the Wall Street Journal? Should he tour the facilities where they are implementing the fix, and visit the factories where there has been a work stoppage to talk to the workers?
If the company is really serious about refocusing on the customer, they should enlist dealers on a grass roots level to reach out to customers and employees. There is evidence that the dealers are doing that already, but how much support are they getting from HQ? Should Toyota consider developing a new "best practices" in assessing defects, faulty parts and testing that go well beyond the current NHTSA guidelines and industry norms? If so, than those efforts should be documented and turned into a communication campaign that Mr. Toyoda can begin to articulate to all audiences. Perhaps therein lies the opportunity Mr. Toyoda's father spoke of.
What are your thoughts about Mr. Toyoda's communication role here? Should it be expanded or curtailed? Should Toyota actively seek to emerge as a leader in safety or just hunker down and get through the crisis and hope that time will heal this wound?
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.
The Rev. Pat Robertson, one of America's best-known evangelist broadcasters, created a firestorm Wednesday night even as he was busy soliciting donations for earthquake-ravaged Haiti on his Christian Broadcasting Network's flagship show, "700 Club." Robertson intimated that Haiti had been cursed by God for making a pact with the Devil to kick out the country's former French colonial masters: http://www.youtube.com/watch?v=oXiyceNZmiU
"You know ... something happened a long time ago in Haiti....They were under the heel of the French...They got together and swore a pact to the Devil. They said, 'We will serve you if you get us free from the French.' And so, the Devil said, 'OK, it's a deal.' And they kicked the French out," Robertson said. "You know, the Haitians revolted and got themselves free. But ever since, they have been cursed by one thing after another."
It didn't take long for the statement to create tremors of its own. Religious leaders such as Franklin Graham (son of evangelist Billy Graham) condemned the comment. "He must have misspoken," Graham said of Robertson. "But we need to get on the path of helping people right now. God loves the people of Haiti. He hasn't turned his back on Haiti." White House spokesman Robert Gibbs said, "At times of great crisis there are always people who say really stupid things." White House advisor Valerie Jarrett said on ABC that she was "speechless at that kind of remark. Our heart goes out to the people of Haiti....That's not the attitude that expresses the spirit of the president or the American people, so I thought it was a pretty stunning comment to make."
The Christian Broadcast Network website today contained an official statement claiming Robertson was speaking objectively about Haiti's history that has led "countless scholars and religious figures over the centuries to believe the country is cursed. Dr. Robertson never stated that the earthquake was God's wrath," the statement reads. "If you watch the entire video segment, Dr. Robertson's compassion for the people of Haiti is clear."
There are times when efforts at "clarification" ring hollow, and this is one of them. At CommCore we advise our crisis communications clients that timing is one crucial factor among many when deciding whether to apologize for a public statement that created controversy, intentional or not, or whether to try to explain it away.
With the very real possibility of tens of thousands of fatalities in Haiti at this very moment, and the prospect of a rebuilding effort that will take years to complete, now is not the time to parse phrases and try to convince an audience of what Robertson may or may not have "meant" to say.
Now would be a time to come right out and apologize immediately for making a statement that regardless of whether it was interpreted correctly, was ill-conceived and inappropriate.
What do you think? Can you come up with other misguided efforts at revisionist history after a controversial public statement created an uproar?
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?
If the Washington Post didn't hear or see the tree fall, it still may have happened.
Remember the riddle: If a tree falls in the woods and no one was there to see or hear it, how do we know it really fell? The new answer is because of cell phone camera and Facebook and Twitter. Take the recent snow storm in Washington, DC was not only big news in the U.S., it made headlines in Europe. So did the Tweet-up Snow Ball fight with the gun toting off-duty officer. http://bit.ly/7Xz6kW
I saw it as a story and photo in a London newspaper. I was first struck by the fact that the Washington snowball fight was a web and Tweet-up public event. And I thought that 20 somethings didn't use Twitter. Not sure how many text messages played a part, but probably not very traditional land line calls were involved.
Fast forward to the snow ball fight and the off-duty officer didn’t like his Hummer being hit by snowballs. It wasn't a reporter from the Washington Post that saw him draw a weapon, it was a snowball revelers with cell phone cameras. http://bit.ly/7yiCSR
The cops issue the usual denials that he drew a gun. Not so, because photos and videos are on YouTube, blogs and pasted on a Facebook page and pretty soon the "traditional media" is picking it up. http://bit.ly/8ccFSh So, a London newspaper writes a story about a tweet-up and Facebook postings and calls it reporting.
Remember the more serious Virginia Tech shootings and the first videos on CNN were from a shakey cell phone. The early videos from demonstrations in Iran were from cell phones. The first information on the point is that in today's world every cell phone is a camera and every tweet could be global news.
Crisis communicators can't relax if an incident doesn't make it to traditional local news. Don't be paranoid, but monitor the news, Facebook, twitter and blogs.
It's probably a first, getting arrested for NOT tweeting. This also falls into the category of: be careful what you wish for, especially if it's on a social network.
Last week Def Jam record label executive James Roppo tweeted that 15-year-old Canadian pop singer sensation Justin Bieber would be signing autographs at a Long Island, NY mall clothing store. Screaming teeny-boppers began lining up as early as 7 hours before the event.
As the day grew longer, the crowd -- mostly pre-teens and teens -- reached an estimated 10,000. A sudden surge forward caused a stampede of youngsters worried they would not get in to see their idol. Police, fearing injuries, asked Roppo to re-tweet that the event was cancelled. He refused. It took tweets by Bieber himself, who was prevented by authorities from entering the Mall, to get word out to social networks for teens stay away from the event. "They are not allowing me to come into the mall," Bieber tweeted. "The event...is cancelled. I don't want anyone hurt."
Only minor injuries were reported. But Roppo was arrested by authorities and faces potential charges of reckless endangerment, criminal nuisance, obstruction of government administration and endangering the welfare of children. Def Jam Records later issued a statement citing the safety concerns of "the police and the Fire Marshal" that "prohibited the event from taking place."
Could it be, however, that the cause for the cancellation was the use of social media in the first place that excited young fans into a frenzy? The instantaneous delivery to thousands of tweeters enamored with the teen heartthrob, and their subsequent real-time re-tweeting of news of the Bieber appearance, might well have been its own firestorm in the making.
Another question -- about both the medium and the communication -- is what responsibility did Roppo or others have to continue communicating?
One of CommCore Consulting Group's first rules of communication is to consider all potential implications before you decide how to reach out. On reflection, might not Roppo and Bieber realized that exciting thousands of impressionable young fans at an instant on their mobile devices and computers could proliferate into a potential crisis? We wonder if Roppo was in essence shouting "fire" in what became a crowded theater, one of the exceptions to First Amendment rights. What do you think?
As I'm writing, the European Health Commissioner has recommended that unless it is "essential," that Europeans should avoid traveling to Mexico or the US.
Not since SARS have we seen a public health concern and watch that matches the focus on Swine Flu. While the outbreak started in Mexico, confirmed cases have reportedly been seen in the U.S. and in Canada.
I was privileged to be able to help Health Canada and the Canadian Government during the 2003 outbreak. Here are some initial thoughts on what public health officials should do:
Develop a web site as a central place for information. Information should be in English and Spanish. The English site for Mexico we have found is http://www.health.gob.mx/.
Many U.S. news sites have information as does the U.S. Centers for Disease Control. Here are a few recommendations that came out of SARS:
Use the web site and update it often
Health officials in any city, town or national organization should set up a war room
Health officials should hold frequent meeting to decide on messages of the day
Hold briefings and post to the web as necessary
Ask for technical medical and health experts to hold briefings
As bloggers, we know that social media is a fluid environment. When attacked, companies and organizations must decide whether to respond quickly to negative sentiment, or wait to assess their response.
Some argue that the percentage of the overall population actively engaging in social media tools like Twitter, Facebook and Digg - though growing - has not yet reached critical mass. But here's the question: is it already a significant enough number, or a critically important enough audience, to warrant constant serious attention by professional communicators?
Was it worth it for Johnson & Johnson's Motrin to pull its controversial ad because of the uproar it caused on Twitter and blogs? According to Ad Age, citing Lightspeed Research, almost 90% of women never saw the ad. Surveys show that more attention was paid to the surrounding crisis and swift corporate reaction versus the ads themselves.
"Too often, communicators act too soon without listening to who are doing the chatting and what it really means to their brand. Sometimes communicators are completely absent from the conversation," remarks social media expert Howard Greenstein.
In contrast, Amazon is currently in the middle of how to continue to react. They had to act quickly last weekend when angry authors (and supporters) of gay and lesbian books whose works were de-listed from the sales charts launched a Twitter-offensive over the Easter holiday weekend. Tagged #amazonfail, thousands posted angry online sentiments about Amazon. Even people who aren't necessarily fans of the de-listed books or authors joined the fray. So far, Amazon is claiming no policy change and that the de-listing was likely due to an algorithm glitch. Amazon called it "an embarrassing and ham-fisted cataloguing error." (sic) Question: are they communicating enough? How much would be too much? And are they listening enough first?
In crisis communications, we often talk about the "Golden Hour" a period of time in which you can gather information and respond. It is a phrase from emergency medicine which says that you don't have tons of time, but a little more time than you think. The first five minutes of gut instinct panic responses could lead to the wrong actions in medicine. Taking a little bit more time - but not too much - allows for finding out more data and information, and a more informed response. In social media, we're watching to see if the "golden hour" principle is the rule or the exception.
What has your experience been with social media and situations involving businesses and their services or products that may, or may not, be crises? Do you believe that a quick corporate response is essential even if the scope and scale of the social media conversation remains unclear? Is it enough to respond quickly online, or is immediate corporate action essential as well?
Tylenol Back in the news - It was unlike any other crisis
According to recent news reports, FBI investigators have reopened the Tylenol poisonings case from 1982. A couple of fortuitous events coincided: First, the 25th anniversary in 2007 brought new tips to law enforcement. Second, utilizing new forensic techniques the FBI has seized computer files and evidence from the person originally convicted of extortion in the case. (James L. Lewis was not convicted of the poisonings, just trying to make money from Johnson & Johnson.)
The renewed investigation brings back to mind the general conclusion that this was one of the great case studies in how a company should handle a product crisis. Indeed it was. As one of the consultants who advised J&J on how to handle media and customers, I still believe that J&J made all the right moves. The response was led by CEO James Burke, who was as decent in a closed door meeting as he was answering questions from Mike Wallace on "60 Minutes." The company went beyond what regulatory and law enforcement authorities recommended they had to do.
No two crises are ever the same, and we have had many others that dwarf this one in terms of number of fatalities, lives impacted and dollars at stake. Yet Tylenol is still considered THE case study.
The field of crisis communications has countless more examples of poorly and well-handled responses. One point I always make is that unlike almost all other crises, Tylenol was different in that there was no "contributory negligence" on the part of J&J. In almost all other crises, while not intentional, there is some aspect that the parties are responsible for. No company wants an oil or gas spill, no one wants to have an industrial accident, yet these types of operational mishaps do occur. The companies must shoulder part of the responsibility for the operational or security breakdown.
The key lesson from Tylenol : there is no substitute for appropriate transparency and clarity when responding to a crisis. Almost three decades after the first poisoning, and long after the story had faded from the news, a new investigative wrinkle has moved stories of the crisis back into the headlines. But the stories are about the crime, not a rehashing of the product recall. The initial J&J response ensured that the company actions will continue to be portrayed favorably.
An online message only 140 characters long can create a world of trouble. That's what Ketchum PR's VP and Director of its Interactive Services Division James Andrews found out while in Memphis last week after he typed the following message onto social media website Twitter: 'True confession but I'm in one of those towns where I scratch my head and say, 'I would die if I had to live here.' "
That he was on his way to meet with Ketchum client FedEx which is headquartered in Memphis seems to have been the catalyst for what followed.
Typically, I first found out about it via a tweet from Tweeter @davidhenderson. Andrews found out much more quickly than that. First, some Tweeters posted objections on Twitter, forcing Andrews to respond in typical (and in this case unclear) Twitter short-hand: "My commentary on my arrival was based on encountering ppl who didn't want me at hotel vs the city. Sorry."
Then came the big one: a fellow Tweeter and FedEx employee who earlier had attended a presentation by Andrews to FedEx, wrote an e-mail to Andrews that he also copied to the entire senior management of both FedEx and Ketchum.
He wrote in part: "We do not know the total millions of dollars FedEx Corporation pays Ketchum annually for the valuable and important work your company does for us around the globe. We're confident however, it is enough to expect a greater level of respect and awareness form someone in your position as vice president at a major global player in your industry. A hazard of social networking is that people read what you write."
He went on to write: "James, everyone at today's event, including those in the auditorium with you this morning, just received their first paycheck of 2009 containing a 5% pay cut which we wholeheartedly support because it continues the tradition established by [FedEx Founder Fred Smith] of doing whatever it takes to protect jobs. [M]any of us question the expense of paying Ketchum to produce the video open for today's event, work that could have been achieved by internal, award-winning professionals."
In a subsequent blog posting, Andrews apologized: "Two days ago I made a comment on Twitter that was an emotional response to a run-in I had with an intolerant individual. The tweet was aimed at the individual, not the city of Memphis. If I offended the residents of Memphis, TN, I'm sorry. That was not my intention. I understand that people have enormous pride in their hometown."
He then tried to spin the incident into an example of the constructive function of social media: "While some would say this is the evil side of social media, I would say its pure intention is to foster a back and forth dialogue between people rather than a shield to hide behind and replace human contact."
I imagine that in the emotional aftermath of an unpleasant incident he broke a cardinal rule of blogging: he transmitted his Tweet while still upset. While hardly an indictment of social media, it is a stark reminder of the importance of the evolving new social media communications rules and protocols that must be adhered to; ignore or forget them at your peril.
In truth, the rule that we at CommCore insist on for our clients applies to ALL communications: think before you speak. Remember Secretary of State Al Haig's "I'm in control here" gaffe when President Reagan was shot?
From what we can tell FedEx is keeping Ketchum on as its agency, and Andrews still has his job.
What's your take? What does this incident say to you about the risks and benefits of social media in general, and the short-hand micro-blogging of Twitter?
I guess if you haven't heard by now from your mutual funds, 401K or pension plans if your money was invested with Bernie Madoff, you're either in the clear or the fund communications department still has its head in the sand.
I've been looking for letters one way or another from different places where I invest. I'm attaching an email my wife received from her alma mater, Tufts University. It was direct , candid and straightforward. It reflects some of what we at CommCore Consulting Group cite as the best principles of crisis communications. Be direct, say what you can and then figure out a way to move on. This letter is consistent with other messages that Tufts has sent out regarding the financial crisis. Good work on their part:
"Dear Friends: I have promised to keep you informed when the economic news of these extraordinary times has special significance for Tufts. The news this past week has been dominated by a financial scandal of unprecedented scale and scope. I am sorry to report that Tufts is one of a growing number of victims of the crimes allegedly committed by Bernard Madoff.
In 2005, the university's Investment Committee authorized an investment with Ascot Partners, which in turn invested the entire sum with Madoff Securities. We have written off the value of this investment, which totaled $20 million, or slightly less than 2 percent of our endowment. This write-off will not significantly affect our operations. We will cooperate with any investigations of this fraud and will work to recoup as much of our investment as possible. It is personally painful for me to communicate this information to you. We deeply appreciate the trust and confidence that each donor places in the university. We also have an obligation to our students and faculty to manage these resources wisely for their benefit. You have my word that we will look closely at our experience in this case so that we can strengthen our investment process for the future.
I will continue to keep you informed as we work our way through these difficult times. For now, I send all the members of the Tufts community my very best wishes for the holiday season ahead.
Sincerely, Lawrence S. Bacow President"
What have you come across, or what have you as a communications professional done, about communicating news on the impact of the Madoff scheme?
MEDIAtor Blog
