Tuesday, 16 February 2010

Culture factor incubated Toyota crisis

The PR industry has leapt into action to tell anyone who will listen how they would have handled the Toyota recall crisis. The considered opinion of the great and the good of my profession is that Toyota has handled this badly, which may well be true, but I think there is a wider issue here which no amount of media training, Q&As, holding statements and twitter monitoring will deal with.

Many years ago I followed a Toyota procurement manager as he inspected a UK car component manufacturer, which at the time was a FTSE 100. To know power is to follow such an individual around a customer’s facility. Red carpet was rolled out, senior managers quaked in his presence, production line operatives were told in advance to be clean shaven, lunch was bused in from a Michelin star restaurant. Each operational efficiency improvement identified since his last visit was met with a terse question, “How much are you saving?” with the unvoiced question being “How much are you giving to us?”

What Toyota wants, Toyota gets. When one of the UK’s largest vehicle retailers wanted to appoint a new CEO many years ago, Toyota made it known that they would appreciate it if the outgoing CEO became Non-executive Chairman, despite this being in direct violation of the recently published Higgs Report which forbade direct moves from executive to non-executive positions on a listed company’s Board.

Time Magazine at the weekend did a very good job at explaining how Toyota’s corporate culture incubated this crisis starting around 2002 when the first problems with accelerators became apparent. Unfortunately, a culture of fear on the part of employees, who were unwilling to bring problems to the attention of senior management, allied to extreme hubris (this couldn’t possibly happen to us!) led the company to ignore all the warning signs.

Only one PR professional, that I’ve read, has spent any time analysing this aspect of the story. Well done Jonathan.


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