There can be no greater threat to a brand than the possible chipping of the foundations upon which it has built its reputation.
In the case of Toyota, the quality of its product, the honesty of its claims, and continuous improvement are at its core, and the recent recalls could shake the bedrock of the brand.
The five principles upon which the brand has been built –
o Kaizen (improvement)
o Genchi Genbutsu (go and see)
- are well known and have been the basis of the brand for sometime. There is no doubt that some damage has been done, but it is now, in the way in which it handles this crisis, the openness of its communications and effectiveness of its solutions that will determine whether it comes out a stronger brand for the future or a name surrounded by doubt and distrust.
A brand is never separate from the product, policies and processes it practices and it is interesting that the efficiency that has made Toyota the world’s largest car maker may also be partly to blame for its problems.
The use of common parts across many models will mean that what might have been an incident isolated in one product line could end with the massive recall and reputation damage.
It has been reported that the accelerator pedal issue could affect over seven million vehicles worldwide – a tribute to its effective processes, but also an indication of the potential risk of its policies.
If handled correctly, I think it will take a bit more than this to seriously dent the reputation of the company that has a global reputation for producing what are regarded the most reliable and dependable vehicles available; typified by Top Gear’s indestructible old HiLux and the new model recently driven to the North Pole.
But the company must be open, must reach out to its customers and it must do it more quickly and fully than it has in the last month. The fact that the media was able to get hold of this and force Toyota into a defensive position suggests that the company did not understand the scale of the problem or the potential size of the risk.
And that is the risk to reputation and erosion of brand value.
I am sure the products can be recalled and fixed and I am sure that the ‘Toyota Way’ of constant improvement will lead to an improved product, but the real need is to ensure that we all still believe in the brand, are proud (as well as confident) to drive its cars and do not feel either let down or foolish for our alignment with this brand.
The fact that this seems set to spread to some of its Lexus brand models is extremely important as it is here that the company really shifted brand reputation and delivered a new sense of pride.
The key is for Toyota to hold its course, continue to be true to its brand promise, especially respect, improvement and teamwork.
Though perhaps a bit late, I have to applaud Toyota’s ‘Open Letter‘ ads, versions of which have run across the media in all its key markets.
These were completely true to brand and seem to be genuinely transparent.
This is a strong move and shows a commitment to its brand positioning values and promise.
The fact that the company is also using more democratic channels (e.g. Twitter) to maintain a dialogue with its customer base reinforces its intent to ‘make good’: it is addressing associated concerns and keeping its customers updated and engaged in dialogue rather than the more traditional use of ‘one-way’ statements to the press.
There may be a case for broadening this transparency to include practical advice delivered through channels such as YouTube where the reported problem could be shown, or shown how to identify and guidance on how to deal with it or what steps to take.
Toyota is an organisation striving to be true to its brand in the face of a problem and media backlash. It needs solve the problems, but also to understand and manage the public and media concerns with openness, integrity and perspective.