Well, it looks like Toyota Motor is having great difficulty putting a lid on this stink.
The stink, of course, is Toyota's ongoing problem involving brakes and accelerators. As Jeff Kingston noted recently in the Wall Street Journal, in Japan there is a proverb: "If it stinks, put a lid on it."
But as Toyota has learned, this was exactly the wrong approach here. Toyota, as Kingston writes, initially denied, minimized and mitigated the problems it was facing.
“President Akio Toyoda, grandson of the founder, was MIA for two weeks and the company has appeared less than forthcoming about critical safety issues, risking the trust of its customers world-wide.”
No more. This week Akio Toyoda testified before U.S. lawmakers, specifically referring to the causes of the recall:
“I would like to point out here that Toyota's priority has traditionally been the following: First safety; second, quality; and, third, volume. These priorities became confused, and we were not able to stop, think, and make improvements as much as we were able to before, and our basic stance to listen to customers' voices to make better products has weakened somewhat.
“We pursued growth over the speed at which we were able to develop our people and our organization, and we should sincerely be mindful of that. I regret that this has resulted in the safety issues described in the recalls we face today, and I am deeply sorry for any accidents that Toyota drivers have experienced.”
So by Toyoda's own words, the stink is out there and he, on behalf of the company, is taking full responsibility for the clean-up.
Frankly, it's hard to imagine what else Toyoda could have done this week. The question is, has this public-relations nightmare seriously and permanently sullied a brand that had until recently been synonymous with quality and reliability?
We can't know that for some time. But is obvious that crisis management does not seem to be Toyota's strong suit. This is as much a cultural issue as anything, notes Kingston, director of Asian Studies at Temple University Japan. His book Contemporary Japan: History, Politics and Social Change is due out in September.
“Over the past two decades, I cannot think of one instance where a Japanese company has done a good job managing a crisis. The pattern is all too familiar, typically involving slow initial response, minimizing the problem, foot dragging on the product recall, poor communication with the public about the problem and too little compassion and concern for consumers adversely affected by the product,” he notes.
Japanese companies in Japan don't pay much of a price for negligence and that's part of the problem, he adds. In Japan, compensation for product liability claims is mostly derisory or non-existent. In a nutshell, “producer interests trump consumer safety,” in Japan, he says.
The cultural element here is huge and it impacts on crisis mismanagement.
“The shame and embarrassment of owning up to product defects in a nation obsessed with craftsmanship and quality raises the bar on disclosure and assuming responsibility. And a high-status company like Toyota has much to lose since its corporate face is at stake.
The shame of producing defective cars is supposed to be other firms' problems, not Toyota's, and the ongoing PR disaster reveals just how unprepared the company is for crisis management and how embarrassed it is.
In addition, “employees' identities are closely tied to their company's image, and loyalty to the firm overrides concerns about consumers,” notes Kingston, adding that “a culture of deference inside corporations...makes it hard for those lower in the hierarchy to question their superiors or inform them about problems.”
Kingston says this crisis offers an opportunity to reform Toyota's corporate culture and improve quality assurance.
