BLOGS: Wag The Dog

Monday, February 15, 2010, 9:29 AM

Monday's quick reads: Toyota, Tiger, and evolution of corporate citizenship

1.) Toyota and Tiger Woods: Kindred spirits? (Fortune Magazine) -- The question is being raised more and more: Can Toyota recover its reputation? There is no simple answer. The writer explores Toyota's chances by comparing the automaker's plight with that of Tiger Woods.

2.) How Whole Foods reaches millions with Twitter (Social Media Examiner) -- Have you ever wondered how a business handles more than a million Twitter fans? Want the inside scoop from the largest retailer on Twitter? Whole Foods Market is a leading example of Twitter’s power to build millions of relationships a single customer at a time. Here are key excerpts from the writer's interview with the Whole Foods team.

3.) Survey: Most marketers shifting portion of their budget to social media (Social Media Business Council) -- Alterian’s 2009 Annual Survey Results shows 84% of marketers plan to shift at least a portion of their traditional marketing budgets to digital/interactive/social media channels in 2010. The survey involved more than 1,000 marketers from around the world and was conducted between October 1st through December 3rd of 2009.

4.) Corporate citizenship for the 21st century (Boston College Center for Corporate Citizenship) -- Do you know what it takes to lead in the ever-changing field of corporate citizenship? The Boston College Center for Corporate Citizenship has just released two reports that help answer that question and that create unique competency models for today practitioners and tomorrow’s aspiring leaders.

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Friday, February 12, 2010, 11:09 AM

Toyota’s crisis response is a two part story

(Image credit: Junko Kimura/Getty Images)
Like most riveting stories, the current recall crisis that has beset Toyota can be divided into multiple parts.

In Part One, which is still unfolding, the company is responding aggressively to a crisis. In Part Two, which will unfold in the coming months, Toyota will have to respond to the inevitable question from policy makers: “What did you know and when did you know it?”

Let’s look at Part One.

In the last few months, Toyota has recalled a staggering 8 million vehicles and halted production on 11 different models due to a plague of sudden accelerations in its cars. The crisis has rocked an auto company that for a half century had been synonymous with safety and reliability.

After a slow start, Toyota is responding the way any company should that is serious about rebuilding its reputation. Here are five key components to Toyota’s crisis communications strategy.

Be honest about your situation. Toyota recognized it was in a hole and stopped digging. It halted production on nearly a dozen different models, pledging to fix cars currently on the road before pushing new ones off the manufacturing line. The move is bold and not without serious financial repercussions, but it sends an unmistakable message that the company will bear any burden to keep its customers safe.

Say “I’m Sorry.” Toyota President Akio Toyoda (pictured) apologized to customers and took personal responsibility for the recall, as did the chief of Toyota’s U.S. operations. Sound easy? Ask ACORN and Tiger Woods what happens when you respond to a public crisis with defiance or indifference.

Fix the problem. Toyota quickly found a structural fix to the sticky accelerator pedals plaguing its vehicles. This may seem obvious, but too many companies believe that crisis response begins and ends with a good public message. They ignore the underlying problem that led to the crisis, whether it’s a sticky brake pedal or, as we recently saw in the financial industry, a huge appetite for bad debt. Toyota found a solution and dispatched thousands of employees to work 24/7 to repair vehicles currently on the road.

Start talking. Toyota’s public outreach has been relentless. Here’s a quick count of media channels they’ve used to touch consumers, opinion leaders, and policy makers nationwide: press conferences with executives; live television and radio interviews; huge TV ad buys; full page ads in newspapers; op-eds by Toyota executives in The Washington Post and elsewhere; video streaming on Youtube; a regularly updated website; a toll-free hotline; paid search ads on Google, and; regular recall updates for the company’s 100,000 fans on Twitter and Facebook. In sum, they’ve used every means of communication short of the carrier pigeon.

Enlist your friends. Toyota wisely called on a few friends to speak on the company’s behalf. NASCAR star Michael Waltrip posted a message on Youtube stating his belief that “Toyota won’t settle until they get it right, and I know they will make it right.” The company is publicizing testimonials from satisfied Toyota customers, and is working closely with members of Congress who represent states with tens of thousands of Toyota employees.

Okay, so Toyota gets crisis communication. That is rare, given that a lot of successful companies believe you don’t make money by showing contrition.

That brings us to Part Two.

The recall exposed Toyota’s larger problem: their inability to resolve a brewing crisis that reportedly first surfaced in 2002 when complaints of sticky accelerators spiked. In 2005, Toyota recalled more vehicles than it sold. Two years later, Consumer Reports stopped automatically endorsing Toyota vehicles due to what it considered declining quality. Even worse, recent news reports suggest that Toyota failed or refused to disclose vehicle problems to federal regulators over a period of years.

In the coming weeks, Part One of this story will come to a close. Shortly thereafter, Part Two will begin with congressional hearings, investigative journalism, and consumer lawsuits likely to take center stage.

Toyota’s crisis communications strategy will have to adapt to this new phase. They would be wise to be as aggressive and creative as they’ve been in recent weeks because, like many compelling stories, the second act may prove to be the most dramatic.

This article was first published in today's Daily Record.

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Tuesday, February 9, 2010, 8:01 AM

Quick reads: Toyota, the Washington Capitals, and resignation by tweet

1.) The Capitals are reaching out (The Washington Post) -- The Washington Capitals in recent years have moved more aggressively than any other NHL team toward embracing social media Web sites such as Twitter and Facebook, targeting supporters who get their information from non-traditional outlets.

2.) Sun's chief executive tweets his resignation (New York Times) -- Jonathan Schwartz, the last chief executive of Sun Microsystems, has become the first Fortune 200 boss to tweet his resignation. Late Wednesday night, Mr. Schwartz used Twitter to publish a haiku about his exit from Oracle, which just completed its purchase of Sun last week.

3.) ConAgra Foods embraces a social media culture (Social Media Business Council) -- ConAgra’s Director of Public Relations, Stephanie Moritz, explains how ConAgra is approaching social media as a strategic opportunity. Stephanie’s case study explained how they’re integrating social media across many aspects of their business, how they educated senior management through “digital immersion,” and how ConAgra uses five core items to determine their social approach.

4.) Can Toyota be successful in brand damage litigation? (The Drum) -- One analyst believes that Toyota’s crisis management challenges say less about the quality of its crisis communication response, and more about the organisation’s culture and ability to identify and manage incidents before they become crises. Nevertheless, it is clear that this particular incident has the power to do enormous damage, not just to the Toyota brand, but also to its business.

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Thursday, February 4, 2010, 3:48 PM

Survey: Tech is trusted, banks are not

Edelman Worldwide last week released its latest survey of the public's trust (or lack thereof) in the business community. Not surprisingly, banks have their work cut out for them in regaining the public's trust, while technology companies enjoy high marks.

To read the full report, click here. Below are a few highlights:

*The banking and insurance industries rank as the least trusted in the U.S., with banks recording the only slide in faith in the past year.

*According to those surveyed, "quality of communications" and "customer service" as important as "price" and "performance" in influencing trust.

*In the U.S., trust in banks fell to 33 percent from 36 percent, while trust in insurers was the lowest in 2010 at 32 percent, although that level improved from 29 percent in the previous survey. Only media companies matched the 32 percent low.

*Technology ranked highest with a trust level of 81 percent.

Most interesting to me is that the public ranks how a company communicates alongside how a company prices its product and how well that product performs. That's another incentive for companies to meet the needs of their customers in new and creative ways.

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Monday, February 1, 2010, 10:03 AM

Monday's quick reads: Toyota recall and random rules for building awareness

1.) Toyota recall: Five critical lessons (Business Ethics Magazine) -- Toyota’s announcement of a technical fix for its sticky gas pedals – which can lead to sudden acceleration problems - is not likely to bring a quick end to the company’s current recall nightmare. The Toyota brand, once almost synonymous with top quality, has taken a heavy hit.

2.) Survey finds majority of journalists depend on social media (George Washington University) -- A national survey found that an overwhelming majority of reporters and editors now depend on social media sources when researching their stories. Among the journalists surveyed, 89% said they turn to blogs for story research, 65% to social media sites such as Facebook and LinkedIn, and 52% to microblogging services such as Twitter. The survey also found that 61% use Wikipedia, the popular online encyclopedia.

3.) Random rules for ideas worth spreading (Seth Godin) -- If you've got an idea worth spreading, author Seth Godin hopes you'll consider this random assortment of rules. Like all rules, some are made to be broken, but still...

4.) A public company defends staying silent on legal snarl (New York Times) -- For years, Fidelity National Financial, the nation’s largest title insurance company, did not tell investors about dozens of lawsuits accusing two units and several employees of playing a role in an elaborate mortgage fraud scheme in San Diego. Fidelity National did not mention this litigation to its shareholders until October 2009 — a silence that speaks volumes about how tricky “full disclosure” can be in a world that increasingly demands it but rarely defines it.

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