Research Explainer

Regardless of whether Toyota finds and fixes the flaws in their cars that cause uncontrolled acceleration and faulty braking, their mismanagement of communications has been an unmitigated disaster that alone will cost them huge financial losses and a severely damaged reputation. Or, as the old saying goes, “You can’t fix stupid.” Reuters has published one good account of Toyota’s PR problems.

Perhaps the only slightly silver lining in this dark cloud is that Toyota’s blunders offer useful communication lessons for anybody facing a crisis. Some examples:

• Toyota took far too long to respond publicly to the problem. Its CEO did not comment for months after the problem started and has only responded informally. A smart communications plan would have had him speaking on YouTube and at news conferences from the time the crisis first began.
• Toyota should have offered clear steps its customers could take to protect themselves.  In an article in the Fort Myers News Press, public relations expert Tina Matte pointed out that the company didn’t tell consumers what they should do about driving vehicles with the flaws.
• Toyota was far from transparent. The company  only gave the public vague reassurances that it was developing a solution, and it hid the process behind the usual corporate wall of silence. A far more effective, albeit daring, approach would have been to put the company engineers out front, discussing candidly what they knew and didn’t know about the problem as they were working on it. Such candidness would serve  not only to reassure the public, but to portray Toyota sympathetically as an open organization, deeply concerned about the quality of its products. Perhaps public discussion might have even brought useful insights from the vast legions of engineers who would have avidly followed the developments.
• Toyota used 20th-century communication methods. For example, full-page newspaper ads are woefully outdated. And when it did use social media, it did so ineffectively. In the News-Press article, public relations expert Ginny Cooper pointed out that the company’s Facebook page merely redirects readers to the recall Web page on Toyota’s main site. Cooper recommended a separate tab on the Facebook site addressing the recall. And, she said, there should be a separate Web site for the recall.
• Finally, and perhaps most importantly, Toyota should have apologized early and often. Not only were apologies slow to come, but PR consultant Msato Takahashi pointed out in the Reuters article that the first apology by a headquarters executive did not include a deep bow, a standard gesture in Japan when a firm admits responsibility for a mistake. (Update: CEO Akio Toyoda finally issued a formal apology, complete with bow, on February 5, 2010, in his first formal remarks about the problems). Corporate lawyers often advise against such public apologies, arguing that they establish fault and weakens a company’s position in lawsuits. However, lawyers don’t take into account the full business impact of apologies. I suspect that early, frequent, heartfelt apologies would have been far more financially beneficial to Toyota–both in reducing lawsuits and in maintaining reputation.Certainly, the medical profession has found that apologies reduce malpractice suits.

It will be fascinating to watch how Toyota continues to handle their crisis communications, and whether their reputation recovers. For more tips on handling a communication crisis, see this tipsheet on the Explaining Research site.