This morning a beleaguered Akio Toyoda will appear before the U.S. Congress to testify on the rash of quality and safety issues which now plague Toyota, once the leader in sales and reputation for quality of the worldwide auto industry. Though Toyoda is no stranger to the spotlight -- his grandfather founded the car company, and he climbed the ranks for decades -- this will be his first U.S. appearance before a likely hostile Congressional committee
While other automobile CEOs in similar positions -- Lee Iacocca at Chrysler in the 1980s, and Ed Whitacre at GM in the past year -- are veterans of the public spotlight, Toyoda has never faced such a challenging situation. Like it or not, CEOs are the definitive voice for every company's reputation and brand image. The longer they wait to respond, the more difficult it is to resolve the crisis.
As I explore in 7 Lessons for Leading in Crisis, a leader staring down the barrel of a full-blown crisis must own the problems internally, quickly go on the offense to form a resolution, and take his word to the public. In the court of public opinion, judgments are handed down by consumers the moment that news breaks of a flaw in quality or service. In the case of Toyoda, he has ducked the public eye and hesitated for so long that many people have already made negative judgments about his leadership and his company's handling of the crisis.
Don't get me wrong here: I am not negative about Toyota as a company. My wife and I have driven its cars for forty years, and have had exceptionally good experiences with their quality, features and longevity. I feel confident it will recover from this episode to be a great company once again, possibly better for having had this horrendous experience. My questions have to do with Toyoda's leadership and whether he is up to the challenges of leading the company through this crisis.
Wednesday's hearing provides an opportunity for him to convince the American public of his commitment to fix the problems and make restitution for the damage done to consumers. Yet it could become a disaster that causes Toyota's reputation for crisis management to go from bad to worse if Toyoda freezes under the pressures of the spotlight like a deer in the headlights. It's all up to Mr. Toyoda and how he handles the questions that will follow his prepared remarks.
Toyoda's dilemma is reminiscent of the situation faced several years ago by Bridgestone Tire of Japan when the failure of its tires caused hundreds of fatal accidents from the rollovers of Ford Explorers. In his testimony before Congress, Bridgestone CEO Ono at first tried speaking in English, became flustered with questions he had trouble understanding, switched to speaking in Japanese through a translator, and finally turned to his subordinates to answer the questions. His appearance gave the impression of a CEO who either didn't know what was going on or didn't care. After that disaster, Bridgestone appointed an American as CEO of its U.S. operations and let him go on talk shows with Ted Koppel and others. But the damage was done.
No doubt Toyoda has seen the tapes of Ono's appearances. That's probably why he declined at first to testify and only agreed under extreme pressure from the U.S. and Japanese media.
The best thing that a leader can do in the spotlight is to come across as authentic - taking full responsibility for the problems, offering sincere apologies, and proposing genuine solutions. That's what earned Johnson & Johnson CEO Jim Burke such high marks for his handling of the 1982 Tylenol crisis. Another role model for Toyoda is David Neeleman, founder of JetBlue, who masterfully handled his company's stranding of hundreds of passengers at New York's JFK airport on Valentine's Day 2007. For the first time in airline history, Neeleman installed the Passenger's Bill of Rights that offered monetary compensation for delays caused by his airline.
The worst thing leaders can do in this situation is to offer canned remarks or to say what they think Congress and the public wants to hear. That's the impression created by Toyoda's Op-Ed in Tuesday's Wall Street Journal, which reads more like a press release written by an American PR agency than the sincere apology of an apologetic leader.
To come across as authentic and caring, Akio Toyoda must take full responsibility for the crisis, from the malfunctioning brakes, accelerators, and onboard computers, down to the poor handling of the media circus by Toyota once news of the crisis broke. The buck stops with him. His testimony offers the opportunity to be an authentic leader who recognizes that reality.
At the same time, he needs to anticipate the hostile questions that may come from lawmakers, many of whom will take a hard line with Mr. Toyoda and grandstand for their constituents. Toyoda should anticipate some curveballs coming his way, and must be prepared to remain cool and collected throughout the process.
Since it appears Toyota's quality and safety issues have existed for a number of years, members of Congress will justifiably want straightforward answers as to why the delays occurred in acknowledging them. Or why the company at first blamed loose floor mats and panicky drivers for the sticking accelerator problems rather than acknowledging product defects. Or why, after so many weeks, Toyota still does not know the root cause of the problem, as U.S. CEO Jim Lentz said in his testimony on Tuesday.
After making public apologies, Toyoda needs to explain what led to the crisis, both at the technical level as well as on an operational basis, and then present a comprehensive plan for getting the problems permanently fixed. He should reassert Toyota's core values of safety, quality, and value that made Toyota so appealing for so long.
As grandson of Toyota's founder, Toyoda will feel the pressure of having his family name on every car the company produces. He may also be wary that in spite of his family heritage, his job is on the line after less than nine months as CEO.
Much more importantly, Toyoda needs to recognize, as J&J's Burke did long ago, that what's at stake here is not his personal future, but the very survival of Toyota as a respected leader in the American market. Toyota has been a great company for decades. It is up to its leader to bring it back to greatness.
Congress and the American public are waiting for him to finally step and lead authentically.
Mr. Toyoda: You are the definitive leader of one of the largest and (once-) most trusted brands in the world. People expect you to act like it on Wednesday. This is a prime opportunity to right the ship. Don't shirk the spotlight. Embrace it.
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