In an age of mistrust, even the smallest slipup can destroy a well-cultivated corporate image. So it’s no wonder that Toyota is scrambling to control the fallout from their latest recalls. The acceleration problems that have led to a recall of more than two million cars aren’t simply a quality-control issue – they strike at the heart of the company’s value proposition: reliable cars that keep your family safe.
Much has already been written about Toyota’s response to this corporate crisis, and especially their failure to act more quickly. I want to focus on a specific event, Akio Toyoda’s February 9 Op-Ed in the Washington Post. The point is not to assess Toyota’s overall approach to this crisis or to predict its effectiveness. Instead, it is to simply look at this document and what it shows about this company’s approach to apologizing for a corporate crisis.
The Open: Our heritage.
“More than 70 years ago, Toyota entered the auto business based on a simple, but powerful, principle: that Toyota would build the highest-quality, safest and most reliable automobiles in the world. The company has always put the needs of our customers first and made the constant improvement of our vehicles a top priority. That is why 80 percent of all Toyotas sold in the United States over the past 20 years are still on the road today.”
Not a bad open, even for a car company under extreme stress. The goal: remind readers why Toyota has had such a great reputation for so long. Toyota can still pull this off. For most Americans, this is Toyota’s first offense, and Toyoda can effectively tap into that old, positive reputation to head off the most severe criticism.
Many other companies and industries try this to less success. Ford and GM, for example, can’t effectively tap into their 100 year heritage because numerous problems in the last few decades have hurt Detroit’s reputation. The same holds for industries like pharma and health insurance or the oil and gas industry. The point here: if you have had a good reputation before a crisis, use it. If your reputation wasn’t great leading up to the crisis, don’t think you can go back to your origin story to find a repository of goodwill.
The one criticism I have of this intro is the line that “The company has always put the needs of our customers first.” Really? The American people aren’t going to buy this – especially in today’s atmosphere of corporate mistrust. A better approach would have acknowledged simply that safety and reliability are the hallmarks of Toyota’s rise and reputation.
Part 1. The Apology
“When consumers purchase a Toyota, they are not simply purchasing a car, truck or van. They are placing their trust in our company. The past few weeks, however, have made clear that Toyota has not lived up to the high standards we set for ourselves. More important, we have not lived up to the high standards you have come to expect from us. I am deeply disappointed by that and apologize. As the president of Toyota, I take personal responsibility. That is why I am personally leading the effort to restore trust in our word and in our products.”
As far as apologies go, this is pretty strong. Though he doesn’t ever say “I’m sorry,” choosing to “apologize” instead, the language does sound genuine. More important, he is unequivocal about taking responsibility for both the problem and the solution.
In between the lines however, it is clear that the lawyers have had a strong role in this message. Rather than apologizing for the actual problem – the sticking accelerators and the injuries associated with them – he is only apologizing for failing to meet consumer expectations.
In fact, there is no place in here or in any of Toyota’s response to date where the company or its CEO takes any responsibility for the actual damage done. Now it is easy to argue that this is a legal necessity – but it is also critical to making this communication effective. The challenge is to find a way to acknowledge the feelings of people who directly or indirectly experienced this problem without accepting legal responsibility.
Part 2. Actions Taken.
“For much of Toyota’s history, we have ensured the quality and reliability of our vehicles by placing a device called an andon cord on every production line — and empowering any team member to halt production if there’s an assembly problem. Only when the problem is resolved does the line begin to move again.
Two weeks ago, I pulled the andon cord for our company. I ordered production of eight models in five plants across North America temporarily stopped so that we could focus on fixing our customers’ vehicles that might be affected by sticking accelerator pedals. Today, Toyota team members and dealers across North America are working around the clock to repair all recalled vehicles.”
This section cleverly reinforces Toyota’s tradition of quality and safety by using the andon cord analogy that has long been part of the Toyota mythology. The language is strong and the actions taken definitive. The big missing piece: Toyota and Toyoda are being criticized for failing to act swiftly enough to respond to the problem. So while it is great that he pulled the andon cord, it would have been better for him to address the question of why he didn’t pull it much much earlier.
This is a serious problem that we often see in corporate crises. Instead of pro-actively addressing the problem as it occurs, companies wait for it to blow over. They only go into damage-control mode after the pundits and watchdogs begin denouncing them. This is the flip side of having a sterling reputation – if you expect past performance to help cover up current mistakes, you’re in for a very rude surprise.
Part 3. More is needed.
“But to regain the trust of American drivers and their families, more is needed. We are taking responsibility for our mistakes, learning from them and acting immediately to address the concerns of consumers and independent government regulators.
First, I have launched a top-to-bottom review of our global operations to ensure that problems of this magnitude do not happen again and that we not only meet but exceed the high safety standards that have defined our long history. As part of this, we will establish an Automotive Center of Quality Excellence in the United States, where a team of our top engineers will focus on strengthening our quality management and quality control across North America.
Second, to ensure that our quality-control operations are in line with best industry practices, we will ask a blue-ribbon safety advisory group composed of respected outside experts in quality management to independently review our operations and make sure that we have eliminated any deficiencies in our processes. The findings of these experts will be made available to the public, as will Toyota’s responses to these findings.
Toyoda seems to recognize that to restore trust, it’s not good enough simply to fix the problem. He must ensure that nothing like it ever happens again. The key word in this section is “independent.” Toyota’s reputation has taken a blow not because millions – or even hundreds – of cars are speeding out of control, but because the company failed to address concerns from outside regulators and safety experts.
The same day that this Op-Ed ran in the Washington Post, there was a front-page article stating that the nation’s largest auto insurer, State Farm, had reported problems as early as 2007. The failure to do something then is why most consumers and pundits are faulting Toyota. The company’s willingness to create more robust internal safety measures, as well as submit to independent review, will be essential to restoring its reputation.
“Third, we fully understand that we need to more aggressively investigate complaints we hear directly from consumers and move more quickly to address any safety issues we identify. That is what we are doing by addressing customer concerns about the Prius and Lexus HS250h anti-lock brake systems.
We also are putting in place steps to do a better job within Toyota of sharing important quality and safety information across our global operations. This shortcoming contributed to the current situation. With respect to sticking accelerator pedals, we failed to connect the dots between problems in Europe and problems in the United States because the European situation related primarily to right-hand-drive vehicles.
Toyota will increase its outreach to government agencies charged with protecting the safety of motorists and passengers. I have spoken with U.S. Transportation Secretary Ray LaHood and given him my personal assurance that lines of communications with safety agencies and regulators will be kept open, that we will communicate more frequently and that we will be more vigilant in responding to those officials on all matters.”
Internal communication is something many of our clients struggle with. Breaking down the silos that separate one department from another can be a challenge, but in today’s interconnected world you simply can’t afford not to do it. In this section, Toyoda acknowledges that lack of communication – with consumers, between different areas of the company, and with regulators – was not adequate, but he doesn’t go far enough in explaining how Toyota will ensure that more voices are heard.
In the previous section, Toyoda forcefully tells us exactly how the company will improve its safety measures – an “Automotive Center of Quality Excellence” and a “blue ribbon safety advisory group composed of outside experts.” But here, we only get “putting in place steps to do a better job” and a promise to be “more vigilant.” Simply put, this isn’t good enough. Toyoda needs to tell us what those steps are, and how that vigilance will translate into action.
Part 4: The Close
“In recent years, much has been written about what we call “the Toyota Way” — the values and principles at the heart of our company. Chief among these is our unwavering commitment to continuous improvement: going to the source of a problem and fixing it. While problems with our cars have been rare over the years, the issues that Toyota is addressing today are by far the most serious we have ever faced.
But great companies learn from their mistakes, and we know that we have to win back the trust of our customers by adhering to the very values on which that trust was first built. The hundreds of thousands of men and women at Toyota operations worldwide — including the 172,000 team members and dealers in North America — are among the best in the auto industry. Whatever problems have occurred within our company, the strength and commitment to fix them resides within our company as well.
You have my commitment that Toyota will revitalize the simple but powerful principle that has guided us for 50 years: Toyota will build the highest-quality, safest and most reliable automobiles in the world.”
This is a powerful conclusion. Toyoda acknowledges the seriousness of the problem, but he’s careful to praise his employees as “among the best.” He promises to learn from mistakes and, more importantly, to fix them. And he proves that he recognizes trust in his company has eroded, and it must be won back.
What Toyoda doesn’t do, however, is take full responsibility. The American people need to know that someone is accountable for the crisis, and for the solution, and that person should be Toyoda himself. A full apology should have expressed his personal disappointment and failure, and then pledged to rebuild trust from the ground up.
I thought last year was the Year of the Apology. It may be more appropriate to say that the challenges facing corporate America today, together with the huge media spotlight on celebrities and athletes means that we are really in the midst of the Era of the Apology.
