In case you missed it, Toyota seems to have developed a little public relations problem. And, like most PR issues, this one ultimately has very little to do with PR. Instead, the company, which was once famed for quality, seems to have fallen into one of the most common traps in the book – it grew too fast. At least, that’s what its president, Akio Toyoda, thinks.
Scheduled to testify before a congressional committee overnight, Toyoda linked his company’s problems to its expansion in the past few years.
“We pursued growth over the speed at which we were able to develop our people and our organisation, and we should sincerely be mindful of that,” he said in a transcript of his testimony. “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.”
When you grow too fast you outrun your expertise. I watched in horror as one of my hometown’s flagship enterprises, Krispy Kreme, went from world-class case study to world-class debacle seemingly overnight for this very reason (well, this plus some competence and ethical issues at the top), and if you’ve ever seen a great local business (restaurant, brewery, you name it) go national, you’ve probably experienced a small-scale version of what Toyota is going through. (Although when Krispy Kreme rolls a bad doughnut off the conveyor belt, nobody dies. Not right away, at least.)
When an organization loses control the way Toyota apparently has, bet the farm that it’s going to be awhile before the revelations finally stop trickling out. And let’s be clear: when the CEO acknowledges that the company has prioritized growth over safety, you have the corporate equivalent of a roofie, Red Bull and Viagra cocktail-addled Tiger Woods hurtling through a lounge crowded with cocktail waitresses. For instance, did the company know about the problems and cover them up? Did they make a cost/benefit decision to ignore customer safety? Who knew what and when did they know it? Congressional minds want to know.
One of the best takes on the Toyota predicament I’ve seen comes from my old friend and colleague John Cavanaugh at his new biz blog, The Tap Tap Tap. John is one of the smartest business guys I’ve ever worked with, and he knows a thing or six about the car business, having grown up as the son of a very successful retailer. He observes that Toyota has finally become an American car company, although I don’t think he means that in a good way.
Cavanaugh thinks Toyota can bounce back, and he offers a brief roadmap for how that might happen (both from an operations and communications perspective). However, their recovery is anything but certain. As he notes in the comment thread:
…yesterday it was leaked that Toyota has been internally critical of the “Democratic administration” since they fear it will be tougher on regulation. If it’s revealed that Toyota sat on incriminating data, they’re in a heap of trouble. And if they sat on it after doing a cost/benefit analysis…well, let’s just say they’d better be ramping up production for China.
If for no other reason than the fact that it would be a tragedy to see all of Toyota’s hard-working people out of jobs, my fingers are crossed. But right now, they’re looking a little too Crouching Tiger to suit me, you know?