Tag Archives: Toyota

Accountability? Media and politicians need to be held accountable.

Chris Gidez, head of crisis comms for Hill & Knowlton raises an excellent question in this post on Bulldog. Where is the accountability?

He provides some excellent examples of the treatment that Toyota chairman Akio Toyoda received at the hands of Congress. Members of Congress had decided on the results of the investigation well before it was completed, apparently accepting the media’s judgment about Toyota’s accelerator problem rather than waiting to find out the truth.

He then raises a similar question about Taco Bell and the recent widespread coverage of an apparently bogus lawsuit about the quantity of meat in their meat.

Toyota, Taco Bell, Enbridge (see previous posts), BP–I would guess Goldman would be part of this list if we had a little more inside information. Politicians and the media form an effective team in either generating reputation crises, or fanning flames of outrage to turn a relatively minor problem into a disaster. I have long seen these battles in terms of white hats and black hats, with the white hats always starting out on the heads of the accusers, and of course, the purely objective, innocent media who are only there to “report the facts.”

The truth is, and these recent events are showing it, that the black hats rightfully belong on the false accusers, be they lawyers, reporters/editors/publishers/producers/ too eager to attract an audience with a juiced-up story, or politicians looking for headlines at the expense of innocent people trying hard to do their jobs.

Not sure how it can be done, and I hate seeing people fall back on the court of law, but somehow there needs to be more accountability in these kinds of situations. The best way it seems is to bring these examples to the public’s attention and let them judge for themselves who can be believed and trusted.

Would major media actually lie just to juice a story?

Trust in the mainstream media continues to decline but recent major crisis events show that it is not learning from the mistrust it has earned. Instead, more and more alarming examples of how intentionally dishonest major media outlets can be in their desperate search for eyes on the screen.

After I blogged about Toyota and the government investigation that exonerated them, I received a very interesting email from a reporter from Michigan. Speaking about the July Enbridge oil spill in Michigan she said:

I caught CBS News lying to Enbridge’s PIO about the contents of a letter that had been sent to the CEO at the company’s headquarters in Canada, but not yet received.  I caught our Congressman (who had been doing some serious grandstanding) who didn’t do his homework on an MSDS which contained impossible data.  Just a couple of days ago, I caught a local online media outlet publishing a story with a sensational headline that was backed by nothing in the article except an unattributed statement, which stirred up a tremendous amount of controversy and was seized on environmental groups in Canada as being true.

Catching CBS lying is a serious accusation. On her blog she provides the relevant details. But there is more. She tells about the brouhaha over an MSDS (Material Safety Data Sheet). Reporters and politicians used an obviously incorrect data sheet to scare the bejesus out of the public saying it called for mandatory evacuation.

She is also provided a very cogent assessment of the problem and the high cost that is paid:

You [the media] are still objective if you produce horribly biased and inaccurate stories as long as they are trashing whomever has been decreed the “bad guy” (big/medium/small/related to oil = fair game) and it’s okay to present the unsubstantiated stories of “victims” as facts.  It doesn’t matter if you destroy the reputation of a good company with a good safety record in the process, as long as they are responsible for a bad thing, they are fair game.  I also learned that all it takes is for one data point to change, and the whole story changes.

That is Enbridge. What about Toyota? I wrote here in my last post suggesting that after the federal investigation exonerated Toyota’s electronics from the acceleration issues, that the media and Sec. LaHood owed Toyota an apology. Yeah, OK, I’ve seen pigs fly over recently, too. But I wasn’t the only one with that reaction.

Bloomberg Business Week journalist Ed Wallace brings this message home, focusing once again on CBS News. The federal findings exonerating Toyota were clearly a huge disappointment to the news media (let alone the plaintiff’s attorneys who sniffed off the results with an attitude that said: federal government, who are they? what do they know?). CBS was not willing to let the story just die, so they trotted out one of the sensational stories that kicked the crisis off, replaying Mark Saylor’s frantic 911 call. But Sandra Hughes, the CBS reporter, neglected to say that the Saylor case had been resolved and it was due to a faulty floor mat installation. This is extreme dishonesty.

Crisis communication expert James Donnelly provides even more examples of how the media completely distorted the Toyota story, and like me, believes some very loud apologies are in order.

I want to know, why does our society permit a system that for the pursuit of profit, one industry can cost another industry billions without penalty?

I will not go into the BP examples–that would take a book in itself. Other than to say that CBS was one of the better reporters of the story according to public information officers working the spill that I talked to. CNN brought coverage to a new low in my mind, and one of the most important reasons was Anderson Cooper’s delight in Billy Nungesser, James Carville plus a few other hotheads who would say the most outrageous things about BP and the responders.

I do think it is important for us as citizens who care about our freedom, democracy and institutions that we start paying more attention to the abuse that is happening. I am preparing a post on an outstanding book I recently read on this topic called “What is Happening to News.” I’ll be providing some relevant quotations from this book by Jack Fuller, former publisher of the Chicago Tribune.

We have lost something very important in this country–real journalism. Yes, there are stellar examples of it still existing. But too much of what parades as real journalism is simply audience seeking at desperation levels–and as we are seeing more and more, with blatant disregard for the truth. We must fight this for the sake of our future, but as crisis communicators, we must understand this situation and drastically decrease our reliance on the mainstream media to communicate key messages.

Trust takes another hit, and Toyota “crisis” shows why

The 2011 Edelman Trust Barometer is out and once again, it doesn’t look so good for public trust. Suffice it to say, public trust is down from last year, and the US is again a third or fourth world country when it comes to public trust.

But I won’t take the time to analyze why. Not when the news today provides such a compelling example of why we have a crisis of trust in this country. To avoid repeating myself, here’s what I posted on Emergency Management:

Toyota must be feeling relieved and exonerated after a month’s long study by the US government including NASA (NASA?–don’t they have other things to do?) showed that the much publicized accelerator problems were not what people (lawyers and the media mostly) said they were.

I have to admit to feeling some exoneration as well. I blogged quite frequently about the Toyota problems which I felt were much over-hyped by the media. The worst in my mind though was the role the US government played in the media attacks–the low point coming with Sec of Transportation LaHood saying that the only place people should drive their Toyotas was to the repair shop–or something  like that.

Now, he is the one announcing the government’s non-findings. I want to know where the apology to Toyota is. His statements were completely out of line and how can one not think they were motivated by the fact that the US taxpayer, under the leadership of LaHood’s boss, had invested heavily in GM, Toyota’s main competition. I for one am grateful that GM is doing great and on the road to health. But I would not feel so great about it if I thought that the bully pulpit of the position of chief regulator of transportation had been abused to protect that investment.

My concern here is not just Toyota, but what has been a clear message of animosity to business and industry in the past few years. The heaping of outrage on BP from the position of the Deepwater Horizon Joint Information Center, a structure supposed to provide pure, non-political response information was one thing. But the ante was upped by EPA’s non-collaboration and treatment of Enbridge in the Michigan spill. Then recent activities by BOEMRE, the replacement to the much-maligned (by the administration) MMS, indicates that it is their policy to be very aggressive in communicating not just a watchdog position against industry, but a junkyard dog position.

This does not bode well for crisis communication for any industry that is regulated. Watch out–the political winds are such that winning politically means throwing you under the bus at any and every opportunity. It is precisely this kind of treatment (of BP in particular) that led the Economist to comment that the administration is striking a very strong anti-business tone. I do believe that the mid-terms have modified that, but the underlying instinct I’m quite certain, remains strong.

But the other important lesson from the Toyota “crisis” is media treatment. I read about the exoneration of Toyota from the LA Times Breaking News email alert. So I went back to the LA Times to see what they said about the accelerator problem. This article, from last November, is exactly the problem.

Note first the headline:”Data Points to Toyota’s Throttles, Not Floor Mats.”

I want to ask what data, whose data? Where are they getting this data? But does the story answer that? But, instead of presenting the hard facts like the headline suggests, the story starts feature-story like with a heart-wrenching victim story. The poor victim removed his mats but the truck still sped up uncontrollably and now the truck is useless to him. Five paragraphs into the story we get to the data:

But accounts from motorists such as Weiss, interviews with auto safety experts and a Times review of thousands of federal traffic safety incident reports all point to another potential cause: the electronic throttles that have replaced mechanical systems in recent years.

“Thousands of incident reports.” What were those NASA scientists doing? Ignoring the data? Who could not conclude reading the LA Times story that Toyota was not completely guilty. Not only of building bad cars with out of control accelerators, but hiding the evidence from the public. That is the story line and who is to doubt the LA Times, New York Times, CNN and all the rest.

Let me be clear. I’m not saying that the recalls that Toyota issued were not valid. I am saying that the news media hyped the problem, came to conclusions, assigned blame and then stood back and looked at the wreckage. I don’t see any mea culpas coming from them based on today’s report.

I’m also saying that Secretary LaHood owes Toyota an apology for the statement he made about driving Toyotas to the repair garage. He not only heaped public scorn and outrage on a company that is looking more and more like the victim, he put at risk the credibility of the federal government as a fair, unbiased and responsible regulator of transportation.

The media’s approach to covering news today has resulted in the lowest trust ratings of any industry–including big oil. Trust in government is at an all time low. Those in media and government need to understand that it is these things that ultimately and unnecessarily end up hurting public trust. Let alone companies like Toyota.

Toyota–reputation disaster or just a blip?

It’s the end of the year and all kinds of PR pundits have been making their list of the worst PR blunders. On the ones I’ve seen Toyota is near the top of the list–BP usually tops them. Which raises the question to me if reputation disasters are what they used to be.

Daily Dog, as I’ve commented before, tends to hype the PR crisis of those covered in its stories. The headline today about Toyota: “As Toyota’s Dark Year Winds Up, Analysts Say Recall Fallout is Likely to Linger: Crisis-Weakened Automaker’s Troubles are “Far From Over” — Even Though New Survey Says Consumers Still Rank Toyota Highest.

To the headline writer’s credit, the positive element of the story is mentioned which is a little unusual. But, the conflict between the oft-repeated story of the the disaster that befell the company this year with the confidence the consumers continue to show in this company raises the question about the nature of today’s reputation disasters. The Dog story says: Despite all that PR trauma, a new survey from Kelley Blue Book ranks Toyota as the most-considered brand among new-car shoppers. A total of 25 percent of those surveyed say the automaker is their top pick when shopping. Coming in a very close second with 24 percent is Ford, followed just behind at 23 percent by Honda.

There is no question that Toyota was significantly impacted by all the negative press, the series of recalls, the Congressional hearings, the suggestions by the Transportation Secretary that no one should buy Toyotas, etc. But, as bad as it looked from the press story and from the analysis of the PR pundits, the question was how could the company even survive. Toyota has not only survived but it has regained its top spot with consumers. That is remarkable.

I will admit to being skeptical of the reality behind Toyota’s problems all along. I felt it was another example of the media overhyping problems, and then, with heightened scrutiny other issues that normally would not come to this level of attention were suddenly big deals. And I was very concerned about the conflict of interest of the administration owning one of  Toyota’s biggest competitors and being both competitor and watchdog. Here’s what I wrote on Feb 22:

Well, I don’t believe the reality is there. I think this is what happens often when things go bad. Additional scrutiny causes additional problems and things pile up. Now the media-shy chairman is preparing to face a highly skeptical and go-for-the-throat Congress. Secretly I wish that Mr. Toyoda would ask the members of Congress this question: How can you be credible as watchdog of the public interest when you have a dog in the hunt? How can the American public take you seriously when your president has more to gain from your problems than anyone else on earth?

I’m not the only crisis consultant who felt there was a substantial amount of media overreaching on this issue. Here is James Donnelly’s post on the topic.

I spoke at the PRSA International Conference on reputation resilience, applying some of the basic ideas about how people and organizations survive disasters to the issues of reputation crises. The goal of resilience is to return to “normal.” Normal is in quotation marks because after a major disaster the new normal is often very different. While there may be a bit of a new normal for Toyota, it looks quite a bit from the outside like the old normal. I suspect inside it is a different story.

But, Toyota in my mind is demonstrating reputation resilience and that I think is the more significant story than how damaging the recall disaster was for them. If there is a case study written on Toyota, it ought to be focused on how a reputation built over many years plus a company culture that has the solid qualities needed to survive enabled a major brand to limit the damage from today’s media and political onslaught.

The truth is our media environment and overheated political discourse makes for a difficult environment for reputation protection. But the other side of it may be that the public instinctively understands it and doesn’t take all the accusations and heightened scrutiny as seriously as we tend to think.

Replying to William’s question–Goodwill and Reputation Management

Frequent Crisisblogger commenter William Cummings (vacation lane blog) asked about the relationship between the accounting of “Goodwill” and “reputation management.” I started to answer but decided to make it a post. Here’s to you William:

Not  being anything resembling an accountant my understanding that “Goodwill” is sometimes shown as an asset on a financial statement as a way of capturing the intangible but very real value related to the company’s image, brand value and/or reputation. The reality is that a business is or should be made up of much more than its physical assets. In fact, I argued in a much earlier book, that the real value of a business ought to be measured by its relationships–the number, quality, and potential revenue and profits they and those they connect with represent. There are a number of companies today that measure “brand value” by looking at these things and making some financial determination of what the company is worth based on its position in the market.

Reputation management can be seen as those things that management does to protect and enhance its brand value. Company executives do lots of things to protect and enhance their revenues and profits and these are traditionally seen as the primary and appropriate focus of management. But brand value goes beyond sales, costs and margin. While you may be able to increase net margin by sourcing a better supplier, or increase sales by a more effective marketing strategy, enhancing and protecting brand value is a little more complex.

Interbrand does a good job of analyzing brand value. But one of the most useful stories and analysis I’ve seen of this is from 24/7 Wallstreet where they present the 15 most hated companies in America.

One thing that will become clear from looking at these ways of measuring brand value is that it does not equate sales and profitability. In fact, it is quite possible to be ungodly successful in sales and profits and have a really bad public reputation. The two often go together as I’ve commented here several times–look at what happened to Microsoft when they became totally dominant in the software business. They had a terrible time until Google showed up and started competing–now Google faces some of the same problems because of their dominance in their sphere. When Toyota approached and then passed GM as the biggest carmaker in the world I warned (in 2007) that they should watch out because they were susceptible to reputation attacks based on their leading role. Success can really hurt.

William, I’ve gone far beyond your question–but reputation management obviously is a big deal. As the article that prompted your question points out, it is now CEO’s biggest concern. Ultimately, however, the solution is simple. Be trustworthy yourself, and make certain every day that your organization does all it can to earn trust from those people on whom you depend for your future.

Toyota's crisis–just how real is it?

Tell you the truth, I have a hard time evaluating the Toyota crisis. Certainly it is one of the biggest corporate reputation crisis of all times. One of the truly global brands, one of the most admired companies in the world, the world’s leading auto maker, the undisputed kingpin of manufacturing efficiencies or “lean manufacturing” is now wallowing in the dirt in agony with some PR pundits asking out loud if the brand (like Firestone) needs to be killed.

I really don’t get it. So I went back to see if I could find just how serious the safety issues are. What I found was some pretty bad accidents attributed to accelerator issues. Admittedly, I haven’t dug deep to see the statistics. But what I saw was a lot of very typical fear-motivated reports such as these they carry dramatic lines and dramatic photos but seem remarkably short on facts. Here’s the blotter from ABC News and in my view only helps cement Brian Ross’s reputation for dramatic story telling–perhaps at the expense of the truth.

I very much respect Jim Lukaszewski (luke-a-shevski Ithink) and Jon Harmon and here is their take on the subject. Crisisblogger readers will recognize Jon because I recently hosted a webinar with him talking about his great book on the Ford Firestone crisis called Feeding Frenzy. There is no doubt that this is a corporate reputation crisis of almost unmatched dimensions. But what I can’t really tell why. Possible reasons:

1) The safety problems with Toyotas are every bit as serious as the huge coverage and government focus warrant.

2) Safety problems are real but overblown and Toyota’s lackluster response contributed to the current crisis.

3) Safety problems are way overhyped but its too good a story to miss for the media who was tiring of Haiti, and great news for the Obama administration (Mr. LaHood being on point) because the worse Toyota does, the better GM does and that will make the president’s investment in GM look brilliant.

Number 3 would make me a conspiracy theorist and a cynic ( I lean more toward cynicism than conspiracy theories) so I’m going to with a combination of number 2 and number 3. Maybe some reader will point me to overwhelming factual evidence that the 9 million or so cars that have been recalled have safety problems far beyond any other vehicle on the road. If so, I will readily grant that perhaps Toyota deserves the treatment it is getting and maybe even deserves the corporate reputation death it is being threatened with.

From Toyota’s perspective, none of this really matters. The public believes right or wrong that their vehicles are dangerous. So dangerous that our transportation secretary doesn’t seem certain if they should even drive them to the dealership or junkyard. Perception, as they say in this business, is reality. (That was one of the biggest public misstatements I’ve even seen and why he has not been excoriated for that I don’t understand.)

Some of you might think I’m a Toyota lover–actually I drive a Honda and my wife drives a Mercedes. I don’t work for Toyota and never have. But as a commenter on reputation crises, this one has me befuddled. The outrage seems to go far beyond anything rational. The recalls, apologies, more recalls, production halts, emergency fixes–albeit just a step behind the ideal–are all right out of the crisis management playbook. But still, the doo doo seems deeper and deeper for this company.

My advice to Toyota–keep doing what you are doing. Try to keep thinking ahead. Imagine, as it hard as it may be, the worst case scenarios that may still lie ahead. Try to get ahead of any bad news. Report all the bad stuff yourself. Keep apologizing and keep up the messaging you have in place. Get back to making great cars because you got to be number one for a good reason. Don’t lose heart. This storm will take a long long time to pass–just think of all those hungry trial attorneys now advertising to all your good customers–but it will pass. And how you conduct yourself now will impact your share value and your brand value for many years to come. Hang in there.

Others are waking up to the US gov conflict of interest re Toyota

The US has big stake in GM. Toyota is GM’s big rival. Toyota has a product problem. The US government is the safety regulator and watchdog. The US government piles on Toyota–makes big news, sales crash and GM profits. Everyone’s happy. Not me. I complained about this stinky mess–an unintended consequence of Obama’s decision to bailout the company–in my last post. I have been stunned, absolutely stunned that there is no media coverage of this very clear and potential credibility busting conflict. But, now it appears that is starting to come.

Here’s one example. Note that this article starts putting the Toyota problems in context–something the headline crazed media refuse to do and can’t be expected to do. But the more the US government piles on Toyota, against this context, the more unfair it will be and appear and the more backlash there will be on the US ownership of GM. My advice to President Obama: decide what is a better and more appropriate role for the US government–watchdog and protector of the citizens or owner of a company in a highly competitive market. You can’t be both!

Is Toyota going the way of GM?

I was intrigued by a couple of major media stories about Toyota. Today there is this story from US Today saying that Toyota’s reputation may need an overhaul following the latest hit–a major safety recall. It identifies a string of problems that the world’s largest automaker has experienced in the recent past. This follows last week’s cover story in the Economist in which the major challenges Toyota faces are examined in some detail. The story starts with the chairman and grandson of the founder revealing that he has been reading Jm Collins’ book “How The Mighty Fall.”

No doubt Chairman Toyoda has plenty to worry about. But, as I commented here a long time ago, his biggest worry from a reputation standpoint comes from his success. Strange thing about this time and culture–we like winners, but we don’t really like big, gigantic winners who keep on winning. Certainly part of that is our media pattern of following the rise of someone or some organization as they battle the giants, but as soon as they get to the top and topple the giants, the deconstruction begins. In some cases, like Tiger, the deconstruction is aided mightily by their own misdeeds. It is not just media, however. Our cultural values tend to distrust and dislike anything too big and powerful. We don’t like monop0lies or anyone that smells like one. We don’t like teams or companies or celebrities who simply dominate. I said here before that Microsoft finally emerged from under the cloud of its success when it became clear that its dominance was no longer assured with Google coming on strong. Now Google faces the very real problem of their famous corporate slogan turning on them and biting them on the backside. As they get increasingly powerful, more and more will see evil in every move they make.

Toyota has its problems, no doubt. They’ve made mistakes. But having a big safety recall over floormats that slip over accelerators and having the media conclude that this is a sign they need a reputation makeover identifies their real problem. They are the big dog. They’ve got a target on their back. They have tens of thousands of journalists, bloggers, and others beside competitors, who would love to help lower them a notch or two.

Communicators and executives at Toyota have a tough challenge. Above all they need to “walk humbly” while the company continues to innovate, put their kaizen strategies to work, and strive harder than ever to lead.