Too Perfect to Fail
When anatomizing the Toyota debacle, the most interesting machinations will not weigh on Toyota's car failure, but its failure to handle crisis; quality issues had been metastasizing long before they accelerated over recent weeks. Toyota's lust for operational excellence and its pursuit of "just in time" delivery was its ultimate undoing and revealed four distinct traits.
Trait 1: Failure to analyze failure
If brands are belied as perfect, their skills to handle crisis atrophy. Since 1996, Toyota has experienced five debates surrounding the safety of their products. Each time Toyota has failed to think ahead and lacked a swift response.
Toyota's protestations of "we care" seem blithe and distrustful, portraying itself as too perfect to fail, and its willingness to avoid anything peremptory to stay aloft. Consequently, trust in Toyota is experiencing blunt impact trauma, which could have been avoided. Not to alter one's faults is desultory, just ask John Edwards.
Trait 2: A derisory crisis plan
Even the best of plans fall apart on impact, but that doesn't mean one shouldn't have one. Responding to the crisis with alacrity would have offered some palpable success for Toyota's woes. Instead, Toyota displayed the dexterity of goop and the personality of ash. The simplest answer is to act, because to the court of public opinion, no answer is an answer. And when you fail to even respond to the US Secretary of Transportation Ray LaHood, you risk harsh brand depredation.
In crisis, necessity saves us the trouble of choosing. It took Toyota's CEO Akio Toyoda too long to move his company beyond its internal sloganeering and denial. The pusillanimous response of Toyota has deracinated its reputation for quality and beckoned the dangers of a reputation for dodgy cars. The gaffes are too many to enumerate. Hide nothing, tell all–just ask Tiger.
Over time, two words have changed least: I and who. These are the cornerstones of what makes a successful brand i.e. creating "I want" from your customer and knowing "who you are" as a brand. In Toyota's pursuit of manufacturing excellence ("Monozukuri"), these two critical brand building blocks have been defenestrated.
Trait 3: Intransigence
Crisis begs bold and virtuous action, not soggy corporatism. Toyota now faces a litany of complaints, a morass of stories, customers, dealerships, and Congress have only just begun to vent their spleen. Prior to the current crisis, Toyota's intransigence has not been imperceptible e.g., making essential design changes without informing customers with existing models of those changes! This potent combination to combat crisis without ossifying their customers and the short-term myopia that has plagued Toyota's recalcitrant board, tainted by the belief that nothing matters more than the next profit announcement or Monday's share price, has opened them to a volley of imprecations. Punch Lehman's ex-CEO, Richard Fuld, and he'll make this crystal clear.
Trait 4: Expect v. Inspect
Execution is essential - you've got to be in it to win it. The unconscionable reaction Toyota demonstrated revealed impotence within their management approach to crisis, along with a lack of effective decentralized decision-making. Lengthy company procedures are less important than the ability to marshal a crisis team and take action to calm people's fear. In a global crisis trust is essential and Toyota's "stop the line" manufacturing philosophy should have been applied immediately to the crisis. After weeks of ruminations and preceding the reluctant CEOs statement on February 9, there was some wisdom from Toyota's spokesman, James Wiseman, on February 7. He said, "we acknowledge that we could have communicated better as a company." Really James.