Unless you live under a rock, you’ve likely heard about the firestorm swirling around one of the world’s most beloved brands: Toyota. Depending on who you ask, it appears that Toyota knew almost 2 years ago there was a problem with unexpected acceleration in their vehicles. However, Toyota communicated little to their customers with affected models and virtually no actions were taken to acknowledge or fix the problem until the media storm struck at the beginning of this year. Now, Toyota has not only recalled almost 8 million vehicles, but it has ceased production and is engaged in massive damage control in one of the most widely publicized public relations nightmares in history; desperately trying to salvage their brand reputation and their personal and professional integrity – not to mention their share value.
Employees, customers and government officials are asking a barrage of questions – tough questions that executives are struggling to answer; customers are scared and angry and solid information is scarce.
So, you may be asking yourself – what’s this got to do with me? Well, it has everything to do with you if you are in ANY leadership position anywhere. Leaders are asked to make judgment calls every day and the best leaders seek the wise council of others before making critical decisions because they know that even seemly small, inconsequential decisions can result in a similar firestorm if not carefully thought through in a larger context.
1. Decisions made in a split second can have long-lasting effects.
2. The language of business is money but the language of loyalty is character.
3. Despite your accomplishments, one poor decision can become your legacy.
While it’s easy to play Monday morning quarterback once the cat is out of the proverbial bag, it’s much harder to anticipate these situations as they unfold unless you are dedicated to an open, honest, transparent communication philosophy. If in doubt about why you should communicate early and often, keep the following in mind:
- In the absence of good information – people will make it up! If you’re not communicating to your employees and your customers, someone else will and they won’t care if they’re right or wrong.
- Trust takes years to build and only seconds to destroy.
- Silence breeds anger and resentment eroding trust and profits.
- Human nature is such that people always assume the worst if timely, accurate information is not forthcoming.
- People understand mistakes and can forgive almost anything – if you don’t believe me, just look at A-Rod and his admission of previous steroid use and contrast that to opinions of Mark McGuire, who many speculate only finally came clean to have a chance to get into the Baseball Hall of Fame.
- When you make a mistake, admit it and make it right, but do it quickly. If you wait too long the monster grows to an unmanageable size – think Toyota.
- A strong communication philosophy based on transparency builds trust – an essential ingredient for success.
- Transparency and trust enhance performance and execution.
- Transparency instills a culture of accountability.
- Transparency attracts and retains top talent.
At this point it’s unclear if Toyota will be able to salvage its reputation and redeem itself in the eyes of their customers, dealers and employees, but let’s hope that through the firestorm of their misfortune others can learn the value of open, honest, timely and transparent communications.