| Do you own a Toyota? If you do, you're probably | | | | shifted to Toyota's poor handling of the crisis, |
| frustrated by the carmaker's inept response to the | | | | compounding an already difficult story for the |
| safety problems that prompted a massive worldwide | | | | company. |
| recall and caused sales to drop 16% since the third | | | | Its lackluster crisis response also created huge legal |
| week of January. | | | | risks for Toyota. According to the wire service AFP, |
| Did you see Tiger Woods' "press conference," during | | | | Toyota "...faces dozens of lawsuits in the United |
| which he steadfastly refused to take any questions? | | | | States alleging Toyota was too slow to act on the |
| Instead of appearing authentic and genuine, he looked | | | | problems. Experts say the legal action could potentially |
| pre-scripted and overly-controlled. | | | | cost the company billions of dollars." |
| Whether you're a car company worth billions, a sports | | | | 4. The Media Will Focus on the Victims |
| star with a billion-dollar brand, or a small nonprofit, there | | | | The media (and the public) tend to see crises from the |
| are certain truths that govern almost any crisis. | | | | perspective of the victims. A good crisis response puts |
| FIVE TRUTHS OF A CRISIS | | | | victims first by demonstrating genuine concern and |
| 1. Organizations in Crisis Need to Communicate | | | | taking immediate action to protect their well-being. |
| Immediately | | | | In Tiger Woods' case, the perceived victims were his |
| Organizations -- or people -- that begin communicating | | | | wife and children -- and his brand will remain damaged |
| immediately have a much greater chance of becoming | | | | until he expresses genuine remorse. Although some |
| the media's primary go-to source for information during | | | | members of the public believe his public statement |
| the crisis. Regular and open communication often leads | | | | was sufficient, many others do not. |
| to more balanced and sympathetic coverage. | | | | Toyota also failed on this count. According to the |
| Imagine if Tiger Woods had spoken to the media on | | | | National Highway Traffic Safety Administration, almost |
| the first day of the scandal, apologizing to his family | | | | three dozen people have died as a result of |
| and promising to go into rehab immediately. Sure, the | | | | "unintended acceleration" in Toyotas. But internal |
| press still would have covered the various women | | | | documents show that instead of protecting their |
| who stepped forward to claim they had a relationship | | | | customers, Toyota bragged to its board about saving |
| with Woods. But they also would have balanced their | | | | money by initially limiting the recall. |
| stories with Woods' statement. | | | | 5. Burying Bad News Rarely Works |
| Communicating immediately doesn't make the bad | | | | Trying to bury negative parts of the story often |
| stories go away. But it usually makes the stories | | | | extends -- and deepens -- the crisis. The information |
| shorter-lasting and less severe. | | | | usually gets out anyway, and the lack of forthrightness |
| 2. Organizations That Do Not Communicate Quickly | | | | hardens any lingering suspicions about an organization's |
| Make It Worse | | | | integrity. |
| If an organization does not respond to a crisis quickly, | | | | After recalling more than eight million cars worldwide, |
| the media have no choice but to get their information | | | | Toyota announced in mid-February that it was also |
| elsewhere. Outside sources are never as accurate, | | | | considering a recall of the Corolla for a different |
| informed, or measured as the organization itself. | | | | problem related to steering. |
| When Secretary of Transportation Ray LaHood | | | | Instead of the bad news dripping out one drop at a |
| testified before Congress last month, he said, "My | | | | time, imagine if Toyota had held a press conference |
| advice is, if anybody owns one of these vehicles, stop | | | | announcing every problem they were aware of, as |
| driving it." Toyota's stock immediately plunged, and | | | | well as the specific solution they were putting in place |
| LaHood quickly "clarified" his comments. | | | | for car owners? It still would have been a bad story |
| Mr. LaHood's gaffe was his own responsibility, but | | | | for the company, but Toyota would likely have |
| Toyota allowed it to happen by issuing such unclear | | | | received some credit for its handling of the crisis. |
| guidance to government regulators and consumers. | | | | The same is true for the Tiger Woods saga. By not |
| 3. The Crisis Response Itself Changes The Crisis | | | | disclosing the full scope of his infidelity, he allowed the |
| An organization's initial response to a crisis changes | | | | women -- one-by-one, day-by-day -- to come out of |
| the crisis itself. A brilliant crisis response will almost | | | | the woodwork. |
| always lead to better (if not good) media coverage, | | | | Imagine if he had instead handled the scandal like |
| whereas a lackluster response almost always | | | | David Letterman handled his own. In large measure, |
| guarantees worse coverage. | | | | Letterman muted his critics by being the first source of |
| Early stories about Toyota's safety issues were | | | | information and disclosing all of the bad news |
| focused on the cars themselves. But coverage quickly | | | | immediately. |