A Big Swing and a Miss…

Friday, February 26th, 2010

There’s no other way to characterize Toyota’s response to the curveball it was thrown regarding its massive automotive recall issues. Toyota failed to step up to the plate by initially ignoring the problem, apparently hoping it would all go away. Then the company failed to step outside the batter’s box and look at the situation from a fresh perspective. Those are just two problems that instantly come to mind. As time goes on, I’m sure we will all be able to come up with more. What’s already clear, however, is that this event in Toyota’s corporate history is truly an epic international whiff.

In business schools, Johnson & Johnson is the golden standard for crisis management and brand protection. In years ahead, Toyota is likely to become the standard for brand damage.

—The Sydney Morning Herald, Oh, What a Failing

But it could be that there’s more to this strike out than just bad management.

[It] is obvious that crisis management does not seem to be Toyota’s strong suit. This is as much a cultural issue as anything, notes Kingston, director of Asian Studies at Temple University Japan. His book Contemporary Japan: History, Politics and Social Change is due out in September.

“Over the past two decades, I cannot think of one instance where a Japanese company has done a good job managing a crisis. The pattern is all too familiar, typically involving slow initial response, minimizing the problem, foot dragging on the product recall, poor communication with the public about the problem and too little compassion and concern for consumers adversely affected by the product,” he notes.

Japanese companies in Japan don’t pay much of a price for negligence and that’s part of the problem, he adds. In Japan, compensation for product liability claims is mostly derisory or non-existent. In a nutshell, “producer interests trump consumer safety,” in Japan, he says.

—The Globe and Mail, Crisis Management Not Toyota’s Strong Suit

I didn’t address cultural factors in the book, but there seems to be something to this notion that they may impact how companies and people deal with curveballs.

What do you think?

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Compounding Tragedy

Friday, February 19th, 2010

I’m sure the 2010 Winter Olympics in Vancouver were a nightmare for the International Luge Federation (FIL). Every four years their sport gets a chance to come out of the shadows and take the world stage. But this time, the moment the curtain rose, they faced a terribly tragic curveball: the horrifying fatal accident of a Georgian luger flying out of the track.

Having built the fastest luge track in the world in an effort to maximize the speed and excitement of their event, the FIL blamed the dead athlete… compounding their mistakes by responding horribly to the curveball.

The federation “said what happened yesterday was because of human error,” (Georgian president Mikheil) Saakashvili said. “I don’t claim to know all the technical details, but one thing I know for sure: No sports mistake is supposed to lead to a death.”

On Friday, the luge federation…said that it’s investigation of the incident showed that “there was no indication that an accident was caused by deficiencies in the track.” Instead it said that luger Nodar Kumaritashvili “did not compensate properly to make the correct entrance” into the curve where he slid off the track at the Whistler Sliding Centre.

—Wall Street Journal, Georgia Leader Has Sharp Words for Luge Federation

Then, in contradiction of its own statements, the FIL reworked the track, slowing it down.

Overnight, race officials moved the men’s start about 100 feet lower to the women’s and doubles start, increased the height of walls and reshaped the ice to keep crashing athletes in the track. As a result, speeds decreased from 94 mph to the upper 80s, more in line with World Cup racing.

—Los Angeles Times, Slowdown is in Effect in Luge Competition

Instead of “listening to their coach” and “waiting for a pitch they could hit” the FIL blamed the victim and then overreacted. Sadly, there’s no way to bring back Nodar Kumaritashvili or console his family and friends, but I am sure that the FIL could have done better in its handling of this curveball.

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