Can Toyota be successful in brand damage limitation?
Toyota has been hit by a crisis of monumental proportions. Reputation management expert Jonathan Hemus of Insignia considers how the brand has handled the 'sticky accelerator pedal' crisis.
Toyota’s current crisis management challenges say less about the quality of its crisis communication response, and more about the organisation’s culture and ability to identify and manage incidents before they become crises. Nevertheless, it is clear that this particular incident has the power to do enormous damage, not just to the Toyota brand, but also to its business.
Whilst many commentators have been quick to jump on the bandwagon and apply that most perfect of crisis management tools – hindsight – to point out the flaws in Toyota’s response, the truth is that it has done many things very well.
In fact, the content, quantity and channels for crisis communication since the recall was finally announced have matched up well when compared with accepted best practice. Executives around the world have been taking to the airwaves and communicating Toyota’s key messages for all they are worth.
Senior communicators have been Twittering and blogging like crazy to fill the information vacuum and take control of the escalating situation. Websites and call centres have been established with information for worried Toyota customers. And US Chief Operating Officer Jim Lentz talked directly to Toyota drivers in a video posted to YouTube.
The company’s use of social media in this way has enabled it to get its point of view across and reach its customers directly without the filter of the media to editorialise the message. And in its communication, Toyota has not been shy of expressing regret. In his YouTube footage, COO Lentz issues a sincere apology at the start of the clip and reiterates this message at the end. Experience of crisis management shows that this is often the best strategy, but many executives – under pressure from their lawyers – find it hard to allow the word “sorry” to pass their lips.
Evidence of steps to address the problem is always essential in a crisis, and recent announcements have demonstrated that Toyota is now very much in action mode. The fact that some dealers are open 24 hours a day to repair vehicles is especially powerful evidence of this fact. Being seen to take remedial action is essential for any organisation seeking to protect its reputation when under fire. Without evidence of urgent action to put things right, the company will not be perceived to care enough.
So why, when Toyota is ticking many of the crisis communication boxes, is it still struggling to fully protect its reputation?
The key seems to be the perceived delay in identifying and addressing the problem in the first place. Whatever Toyota says now, and however well it acts, there is a sense that it ignored the problem until it was forced to take action. The most effective crisis management takes place before a crisis escalates out of control during what we call the “crisis incubation” phase. This requires an organisational culture which is vigilant for potential crises, has open lines of communication from staff to management, and a willingness to address unpleasant truths.
It’s too early to say, but maybe Toyota had a culture ill-equipped to quickly identify and address flaws. When this happens, potentially minor incidents can gestate and then explode into a major problem: in these circumstances, textbook crisis communication can still reduce the damage, but it may not be able to eradicate it.
The second reason why Toyota has such a major challenge on its hands is that this crisis strikes at the very essence of its reputation. Research from thinktank Oxford Metrica shows that when a crisis strikes at the heart of brand values, it has the ability to do most damage. Toyota has built its reputation on quality and reliability, and anything that calls this into question is especially threatening. As a consequence, this recall tests its reputation to the very core: Toyota needs to act, take control and communicate supremely well to avoid one of its most powerful assets being seriously damaged.
So, Toyota faces the reality that its reputation is now on the line. How it reacts to this crisis will define not just its future reputation, but also its longer term business success.
Jonathan Hemus is director of Insignia (www.insigniacomms.com ), a reputation management and communication consultancy, specialising in crisis, issues and online reputation management . Follow Jonathan’s views on crisis communication on Twitter @jhemusinsignia