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.

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.

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.

Tuesday's quick reads: Apple, Staples, and the 70 most important words for 2010

1.) Is Apple in control of its PR? (A View From Silicon Valley) -- Blogger Tim Dyson explores why almost all the news we read about Apple comes from rumor sites rather than Apple itself.

2.) Staples using social media to leak holiday price cuts (Social Media Business Council) -- Staples became one of the first retailers this holiday season to use Facebook to leak “Black Friday” deals. The office supply company posted several deals on products, varying from flash drives to GPS units to laptops, and price cuts are as high as 50%.

3.) Banks narrowing their social media focus (American Banker) -- Though Twitter's service is designed to communicate with a vast, online audience, some financial companies are now using it to reach specific groups or even individuals, a sharp contrast to some early efforts that were more akin to e-mail spam.

4.) Seventy words of unconventional wisdom for 2010 (Harvard Business Review) -- What better way for business thinkers to celebrate the holiday season than with the gift of great ideas? As the year 2009 draws to a close, Seth Godin, the innovator, writer, and blogger extraordinaire, has persuaded 70 other innovators, writers, and bloggers to participate in a project he calls What Matters Now.

How to create interest in your company's Facebook page

(Photo credit: Explora)
Wondering how to create interest in your company's Facebook page? Consider giving some of your product away.

That's what adventure travel company Explora is doing. They're giving away a free trip to Chile. All you have to do is join the company's Facebook and Twitter pages to be eligible.

It's an effective strategy for building a community of advocates online, or just to introduce your brand to those who have never heard of you. As your employees and advocates push your campaign out to their communities, your brand takes on a viral element that has worked so well for other companies in the past.

The strategy is not unique to Explora. Chick-fil-A, Nature Valley, and Red Bull are just a few of the brands to do the same.

The next challenge is to keep your community interested once the free product is gone. For starters, be consistent, personable, and valuable to your audience. If your messaging meets those three objectives, you're off to a good start. You can read more on this topic by clicking this link, and we'll explore it more in future posts. In the interim, give us a call or shoot us an email with questions.

Monday's quick reads: FDA, Hyatt, and media measurement

After a two-week wedding & honeymoon hiatus, Wag the Dog is back with Monday's quick reads:

1.) FDA releases plan for risk communication (PR Week) -- The Food and Drug Administration (FDA) issued a strategic plan for risk communication, one step in a process to better communicate with healthcare professionals, patients, and consumers about potentially dangerous foods and drugs.

2.) Marketing on Facebook requires a delicate balance (Wall Street Journal) -- Despite growing concerns about online privacy on social networks such as Facebook, marketers at the Social Data Summit in New York professed enthusiasm for social media marketing.

3.) Firing housekeepers creates PR mess for the Hyatt (Boston Globe) -- The firing of 98 housekeepers from Boston-area Hyatt hotels has created a big public relations mess for the hotel chain, one that experts say could take a long time to clean up. Criticism of the company has swept across chat boards and blogs like The Consumerist, Executive Nomad, and the Harvard Business Review since the story broke on Sept. 17.

4.) How financial services companies use media measurement (Institute for Public Relations) -- Learn how a financial services company used media measurement and content analysis to gauge the impact of financial turmoil on its brand and reputation.

Tuesday's quick reads: public trust in corporations, ghostwriting, and the personal touch

1.) Amassing a massive audience is rarely the right strategy. (Advertising Age) -- In the world of social media, scale is everything. Media darlings Twitter and Facebook boast, what, 30 sextillion members? It's enough to cause marketers to practically foam at the mouth. But is scale really everything?

2.) Survey: Trust in corporations increasing modestly. (Politico/Public Strategies) -- A new polls shows that trust in government has decreased since March, while trust in businesses has generally improved. Voters are also more inclined to believe business (68%) will play a larger role than government (32%) in the nation’s economic recovery.

3.) Lest we forget, a personal touch still matters. (Advertising Age) -- Marketing blogs are often trumpeting "digital-this" and "social networking-that." The Twitterverse is constantly buzzing, and Facebook updates come faster than e-mails. A writer asks: what happened to the personal touch?

4.) Senator probes medical journals for ghostwriting (Medical Media & Marketing) -- Sen. Chuck Grassley (R-IA) asked eight journals to provide information about their medical ghostwriting practices and policies, in an effort to “shed light on the role companies may play in the dissemination of information about their products through medical literature.”

Interview: Anne Arundel Medical Center enters the social media space

We're doing things a bit differently today.

A few readers have suggested we start posting Q & A's with communications professionals who will take us "under the hood" at their organizations and show us what they are doing to influence public opinion in positive ways. We've been wanting to do it for some time as well, so let's get started.

Today's Q & A is with Justin Paquette, media coordinator for Anne Arundel Medical Center. AAMC is a private, non-profit health center in Annapolis, Maryland with nearly 3,000 employees. By way of background, AAMC staff performs more than 22,000 surgical procedures and handles more than 72,000 emergency service visits per year, as of 2007. (AAMC is not a client of Womble Carlyle's.)

Justin was kind enough to give us some perspective on how AAMC has embraced social media in recent months to reach its stakeholders in new and creative ways. Here's our Q & A:

1. Describe the new communications tools AAMC is using to communicate with its audience.

Justin Paquette: AAMC is in a position many hospitals find themselves in – where we must balance new media with traditional media in our overall marketing mix. A recent survey conducted by the organization Ad-ology found that 53 percent of patients between the ages of 25 and 34 had their health care decisions influenced by social media. Yet, many patients are still influenced by traditional media and advertising.

So we’re trying to find that balance where we’re effectively communicating AAMC’s message in a number of different ways – reaching each “audience niche.”

Some of the new tools we’ve implemented are podcasts featuring the AAMC clinicians our region has come to trust. We call it the AAMC Health Connection Podcast, and it’s updated regularly, and archived on our Web site. We’re the second hospital in Maryland to feature original podcast programming.

We’ve also launched AAMC’s Twitter account, @AAMCNews, a running stream of AAMC News, as well as health care articles from news sites across the country.

I’m currently conducting some research into the feasibility/ROI of a running blog from our administration over the next fiscal year, updating our audience on AAMC news, events, and updates.

2. What value do Facebook, Twitter, and podcasts offer AAMC that you didn’t have before? How does it benefit your patients and other AAMC stakeholders?

JP: New media and the power of the internet have allowed any brand to become, in a sense, its own media franchise. New media also allows an unprecedented level of message preservation; direct from the source.

You can compare this to going and picking your own fruit, straight from the field. New media allows AAMC to push our clinicians, news, and updates directly to our audience.

I said this in a recent interview, there is a lot of anonymity that comes with using the internet for information. And in health care, that anonymity can be scary. But AAMC is a brand our audience has come to trust, so we’re able to break through that anonymity, and supply health care information that our audience can know is reliable, because it carries the AAMC brand.

3. If AAMC has something to say, couldn’t you just send out a press release?

JP: Well we can, and do, use press releases to push out AAMC news. Right now, AAMC’s new media efforts are just an addition to the overall hospital marketing mix.

But newsroom cuts, shrinking news holes, and increased syndication have really limited the role newspapers are able to play in pushing out news. Many of the journalists and editors that AAMC has worked with are unfortunately, no longer in those roles. We still enjoy great relationships with the local/regional/state media, but they can only dedicate so much room to any given organization or business. So by making our Web site, http://www.aahs.org/ a “news hub” of its own, and by using all these new tools, we can get our own message out.

I’ll give you a quick example – just the other day I called a Maryland paper to pitch a story to their health reporter – and she was getting married the next week. She was the sole reporter who could handle this story, and was going to be out for two weeks. The story couldn’t be done by them, even though it fell right in the strike zone of their audience.

4. How did you sell the broader AAMC leadership – administrators, doctors, etc. – on the value of these new communications tools? Have they embraced this new strategy?

JP: AAMC has an administration that is consistently on the forefront of strategic decisions that will benefit those that the hospital serves. While we are still in the early stages of adopting new technology and new methods of reaching our audience, our administration has, thus far, been open to new ideas.

The hardest part for any organization, including ours, is measuring any value of these new services. Traditionally, we’ve been able to point to an article in the Baltimore Sun, for example, and know that we’ve succeeded with a given pitch. But with new media, that ROI is harder to measure. We need new metrics, new measurement.

In addition, for a hospital (and any brand) limits have to be implemented with any social media service. For example, on our Twitter account, I have expressly noted on our profile that a “follow” is not an endorsement. I set this protection because while we want AAMC to be in the health care conversation, we need to be sure our audience knows that we cannot advocate for what others are posting on their accounts. Just like in any other conversation, we can only be responsible for what we say.

But one example, I recently used Twitter to push out a link to the article from the Annapolis Capital discussing our podcast launch. That “tweet” was “re-tweeted” by six others in the first hour after my initial post. Suddenly, hundreds of eyes that we would never have reached were viewing this article, and pushing it on. That viral component is where the power of new media lies.

5. What has been the response – from patients, the press, and the broader public – to this new communications strategy?

JP: Answering for our patients at this point is hard – but I can tell you that the web hits on our podcast landing pages are climbing, so we know people are listening. That has been encouraging.

As for the press, I’ve actually been interacting with a number of reporters via Twitter and have been really excited about the back-and-forth that has generated as a result. Reporters and editors are using Twitter for story ideas, and it’s such a unique way to get in touch with them.

Our physicians have been excited about the podcasts, as well – I’m already getting calls from clinicians on our medical staff saying, “I saw the new podcasts, and would love to talk about such-and-such, a question I hear in my office all the time.” And that is exactly the response we were hoping to get.

6. Does adopting social media and podcasts mean you no longer need to focus on “traditional” public relations, i.e. journalists, advertising, and community relations?

JP: I don’t believe so. I think new media at this point is merely an addendum to utilization of traditional media. Members of the audience any brand is trying to reach lie in a number of different places. It’s our job to use as many different methods as we can to reach those people, and communicate with them.

In his book What Would Google Do, Jeff Jarvis cites a conversation he heard at a forum where someone asked the founder of Facebook a question like: “How do I get my audience to communicate with me?” And the founder of Facebook, Mark Zuckerberg answered back something to the effect of: “They’re already talking about you; you just need to go to where they are.” Not the conversation verbatim, but it was a great response from a leader in new media to someone trying to figure it all out.

7. Some say that sites like Twitter and Facebook let organizations “take the pulse” of the public on specific issues. Can you give a specific example of what AAMC has learned by “taking the pulse” of the online public?

JP: Via Twitter, I learned from the general public that nobody knows what HCAHPS is. HCAHPS is an incredibly valuable patient satisfaction tool. This confirmed to me that, as a PR professional, my job is to help the public understand the utility of this tool, what it means and how it’s measured. And most importantly, how it impacts them.

8. What advice would you give an organization – particularly another medical center – that is unsure whether to make social media a part of its communications strategy?

JP: It may seem simple, but I would say: Embrace new media carefully and always put the brand before anything else. Do your research, learn the tools, and learn how to use them in a way that will benefit you.

Generating goodwill on the cheap

Our monthly column in today's Daily Record explores how companies can use social media to generate goodwill in times of tight budgets and low public trust.

We hear so much about the latest "trends" in social media and so little about how it can actually be used by a company to generate buzz. Hopefully this column helps with the latter dilemma. You can read it in its entirety below, or check it out at The Daily Record's website.

Generating goodwill for your company on the cheap

HENRY FAWELL
Special to The Daily Record
March 13, 2009

Let’s face it. It’s hard to justify an ambitious advertising campaign in this economy. Your company watches every penny like a hawk.

The news outlets with which you previously advertised are losing staff and audience share, declaring bankruptcy or shuttering their doors. Plus, it’s hard to convince Baltimore’s understaffed newsrooms to cover your company when their own resources are dwindling.

Budgets are tight yet our pursuit of the public’s goodwill is endless. To make matters worse, seven in 10 Americans think U.S. businesses are on the wrong track, meaning we need all the goodwill we can find. So how can your company generate buzz and goodwill without breaking the bank?

It can be done. Technology and public conversations are converging in a way that allows you to achieve this goal. The convergence is known as social media.

It enables companies and the public to engage in two-way dialogues at little to no cost, and it’s happening every day here in Baltimore and around the world. The question is whether your company will join the discussion.

I have one rule for companies intimidated by social media: have no fear. Any organization with creativity and a plan can use it to reach the public. If you don’t know where to begin, this column outlines four starting points on the Web with real examples of companies generating buzz on the cheap.

Blogs: More than 112 million of these Web-based publications are on the Internet, with the most popular ones garnering more than a million visits monthly.

You can make blogs work for you in two ways. First, introduce yourself to blog authors who write about your hometown, industry, company or product. The makers of Audi did just that by offering a test drive of their latest model to Guy Kawasaki, a venture capitalist whose blog attracts 2.5 million page views annually. Audi got a great review on the blog, hit a key demographic and connected with a huge audience for little or no cost.

The second way is to author your own blog. Baltimore’s LifeBridge Health used its blog to spotlight its domestic violence services after the well-publicized arrest of a celebrity on assault charges. Marriott International’s Bill Marriott used his blog to tout the good deeds of a Baltimore employee and to announce his own voluntary pay cut. If the CEO of Marriott can find time to blog, why can’t you?

Facebook: With 175 million users, Facebook is not just for teenagers. It allows companies to build an online community of customers and stakeholders where it can post everything from company messages to photos.

H&R Block created its own Facebook page to offer free tax advice to more than 1,600 members. Unlike a static advertisement, the Facebook page allows H&R Block to deliver the exact service that each customer needs — a great way to generate goodwill.

Twitter: This free Web site enables companies to chat or “tweet” real-time via cell phone or computer with the public. Each “tweet” is less than 140 characters. With more than 6 million users,

Twitter has attracted several companies seeking to connect in real time with the public.
Comcast uses Twitter to sniff out customers with cable outages to get them the help they need quickly. Home Depot uses it to remind customers what supplies they need to protect their homes during hurricane season. As a result, both companies are considered by many to be on the vanguard of corporate communications.

YouTube: Anyone with a video camera and Web access can use YouTube, whether a Fortune 100 company or your next-door neighbor. With 79 million subscribed viewers, it is the dominant place for companies to upload and share video clips with the world.

Maryland’s comptroller, Peter Franchot, used YouTube to promote the state’s electronic tax filing system. His irreverent video garnered nearly 23,000 viewers in its first month at a fraction of the cost of traditional advertising.

Embracing social media means changing how you connect with the public. But with public trust of U.S. businesses so low, change can be a virtue.

So take the first step. Explore these sites to see how they can connect you with the public. You may be surprised at how much goodwill you generate and how much money you save along the way.

Henry Fawell is a communications consultant for Womble Carlyle Sandridge & Rice PLLC in Baltimore and was press secretary for Gov. Robert L. Ehrlich Jr. His column appears monthly and his e-mail address is henry.fawell@wcsr.com.