While it may be some time before we know the answers to who knew what and when in the case of the sticky Toyota accelerator pedals, the company clearly understands that its brand’s reputation has taken a hit and is doing a lot to communicate that it cares about its customers. National TV and print advertising as well as news conferences and press availabilities with spokespersons have all been employed. The chairman of Toyota has testified before the U.S Congress in response to subpoenas.
In an unprecedented recall situation that now includes more than 8 million vehicles including the latest generation of Prius hybrids for faulty brakes, how does a brand survive when there are so many American-made quality autos to chose from. Yes, that’s right America has quality autos. That comes from someone who swore he would never own an American car again after one of the worst car experiences of my life – a 1988 Chevy Corsica. The antidote was a 1992 Honda Accord, which turned me into a believer of Japanese quality. Yet, nearly 20 years later, I have owned two American vehicles and have been pleased – one a GMC Canyon pick up and the other a Ford Taurus X crossover. We still have a 2003 Honda Accord but when it comes time to replace it, we have some great American options. U.S. auto buyers are finding out what I found out years ago – we do not have to accept inferior products and we will reward companies who give us what we want and treat us well. Competition is good. It certainly was good for Ford and GM, which are making cars that are competitive on quality, safety and gas mileage. These companies are reaping the benefits from the competition they had after they became complacent and took their preeminence (and consumers) for granted.
Is Toyota on the verge of being in the place GM and Ford were 20 years ago? February’s auto sales figures suggest Toyota has a problem. Ford’s sales were up 43 percent, GM’s up 12.7 percent (the same as Honda), Nissan up 29.4 percent and Hyundai was up 11 percent, while Toyota fell 8.7 percent. And the longer there are questions about whether Toyota found a real fix, the trend will continue.
Although hailed as a quality leader for decades and admired for the Lean production processes that were put into place after WWII, Toyota needs to remember the basic tenets of continuous quality improvement and stay vigilant. It is easy to be come complacent when you think you do not have any competition.
Toyota had the enviable reputation as the quality auto leader of the world. However, the company’s reputation has been slipping in recent years and Consumer Reports, which historically gave Toyota’s cars high marks, stopped giving what seemed like a an automatic seal of approval. It is going to be a long time before Toyota gets through this crisis. The company’s reputation will take years to rebuild. If the company’s leaders make a determined effort, stop taking the consumer for granted, and assume that whatever they make is the best – they can compete again. However, the market landscape will have changed dramatically.
So what are some of the lessons for Toyota and for professional communicators:
1. “Quality is Job #1.” That was Ford Motor Company’s tagline from a few years ago and it became a mantra. Toyota needs to make quality and transparency the core of everything it does and every relationship it has with customers, employees, dealers, regulators – everyone. Ultimately, if our clients and the companies we represent, what to be market leaders, they have to have the goods.
2. Take complaints seriously before there is a problem. In the case of Toyota, if State Farm insurance makes a complaint to the National Highway Safety and Transportation Administration three years before the recall, it is probably an important symptom ofa problem that needs to be checked out – rigorously. So, that means don’t deny and delay. Fix it and move on. How a company responds reflects on its character and demonstrates its priorities.
3. Be clear about your business objectives. Rapid growth often leads to poor quality. Toyota, in its quest to unseat GM as the largest auto manufacturer lost sight of its main differentiating point – it produced the best quality cars in the world. And now it does not.
4. when something goes wrong, say you are sorry. Then back it up with actions. Toyota appears to be doing that but the enormity of the problem will make it difficult for the company to put this situation behind them quickly. First they need to make sure they understand the problem and have a real fix. In the last few days, news reports have come out that there are new complaints that the fix did not work. Hard for consumers to believe in your company when that happens.
We have all heard that it takes a lifetime to build a reputation and seconds to damage it. While no truer words were spoken, Abraham Lincoln had one of the best insights on reputation, “Character is like a tree and reputation like a shadow. The shadow is what we think of it; the tree is the real thing.”
We are known for what we do. We, and our clients and companies, need to do the right thing.
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