Tuesday, February 9

Moving Sideways: Toyota

"You're always hearing these very silly PR people when a crisis hits dive in front of the camera and dish out this ridiculous cliche that if you just fessed up, the problem would go away." — Eric Dezenhall, CEO of Dezenhall Resources.

Two days after investing $3 million on a Super Bowl recall advertisement that flatlined with viewers who were using an online dial testing system to determine their level of interest, Toyota announced the recall of 437,000 Prius and other hybrid vehicles worldwide. It is yet another bump in a series of what the company has called a lapse in safety standards.

High Points Of The Toyota Recall

Overall, Toyota has done a fine job managing most elements of its recall communication, including the development of a recall page on its Web site. One of the best elements includes videos that identify three problem areas that led to the recall and a detailed stopping procedure to minimize driver risk while they return their vehicles to the shop.

Another bright spot is the Toyota recall plan. Within days, Toyota introduced a recall plan to notify owners, schedule an appointment with some dealers offering extended hours of operation, and reinforcement that some trained technicians are making repairs.

The recall communication effectively focuses on what is important: identifying the problems, offering immediate solutions, outlining what owners need to do, stopping production until the problem is fixed, and providing updates on the repair status.

This had led Eric Dezenhall, CEO of Dezenhall Resources, to conclude that the situation is manageable, even if the company didn't start well out of the gate. The problem many companies face, in part, he says, is that they communicate too fast.

Low Points of Toyota Recall

In an effort to respond rapidly, Toyota catered to the American appetite for an apology, with Jim Lentz, president and chief operating officer, Toyota Motor Sales, U.S.A., Inc. While there is nothing really wrong with an apology (despite being confusing in exactly what the apology is for), branding the recall a "sticky pedal situation" was probably not the best choice of words. (His appearances on news programs are smart.)

Another low point is the decision to cash in on the reputation of the company too early. Much like the Super Bowl ad, Toyota is delivering a message that claims for more than 50 years safety has been the highest priority. The advertisement then reveals that "in recent days" the company hasn't been living up to those standards.

This recall communication focuses on accepting responsibility, admitting guilt, and promising to never let it happen again. Unfortunately, Toyota had not yet identified the extent of its recall. So as these messages move forward, additional recalls seems to contradict the message. This is the third time in recent months that Toyota has contradicted itself.

This had led Gene Grabowski, chair of crisis and litigation practice at Levick Strategic Communications, to dub this recall as the worst handled in history because consumer anxiety persists and the messages have been mixed. The problem, in part, he says, is that Toyota was too slow in taking action.

Initial Outcomes Of The Recall

Like many recalls, the Toyota crisis plan has been a mixed bag. The truth is somewhere in between the assessments by Grabowski and Dezenhall. Dezenhall is right in that recalls are not all public relations. There are mechanical and operational considerations. Grabowski is right in that Toyota was too slow to take action with what is shaping up to be a slew of problems.

The real damage to Toyota is impossible to assess at the moment. The number of recalls, especially those unrelated to the original problem, further erodes the company's credibility. And with every new apology Toyota issues now, each subsequent apology means less and less.

In this situation, Toyota would have been better served confining its initial communication to the recall at hand before accepting what seemed to be an across-the-board lapse in safety on one issue. Had they delayed an initial apology that isolated the problem to a single flaw, the company may have discovered there were several more recalls ahead and used the initial recall as a catalyst for investigating every detail.

Specifically, Toyota could have used the "sticky pedal situation" as a catalyst for an investigation, and then breaking the news (as the result of that investigation) that safety standards were not being met across the board, including accelerator pedals, brake pedals, steering columns, and who knows what else.

Meanwhile, instead of producing commercials attempting to cash in on the company's credibility bank, the crisis communication team ought to have been investigating exactly who knew what when so new stories do not undermine current efforts. For instance, breaking today, State Farm says it warned Toyota about an accelerator defect in 2007.

We'll provide some crisis communication points as it pertains to this situation in days ahead, including on how this plan would differ from the introduction to crisis communication boiler plate. Otherwise, there seem to be only two factors saving Toyota at the moment.

First, the problems did not result in an epic number of fatalities. Second, all automakers generate some negativity nowadays.

How negative? Of all the manufacturers with ads that aired during the Super Bowl, only two vehicles weren't dialed down when the brand was first revealed in the commercial. Those two brands: Volkswagen and Kia. See for yourself.

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