Issue: Toyota has fallen victim to brand hubris, and is feeling the consequences
Commentary by: David Vinjamuri

Toyota’s recall of 2.3 million vehicles, and the unprecedented step of halting production at six of its U.S. plants may seem like the inflection point in its quality crisis.  Although the sudden acceleration claims have been circulating for at least three years, Toyota appears to be taking the problem seriously and responding strongly.  A parallel might be drawn with the 1982 Tylenol recall, where J&J chairman Jim Burke took the unprecedented step extending a local criminal issue into a national recall to avoid a loss of confidence in the brand (or copycat acts) and used the entire J&J workforce to physically remove the product from shelves.  (Ironically, J&J is currently experiencing another crisis with Tylenol.)

Unfortunately, Toyota’s current crisis is headed in a different direction.  Two minor facts in the news give us evidence that Toyota is in for more trouble.  First, The New York Times notes that Transportation Secretary Ray LaHood asserted on a Chicago radio show that the U.S. government requested the work halt – disputing assertions by Toyota North American COO Jim Lentz that the production stoppage was purely Toyota’s initiative.

The second minor news item was the assertion by Apple co-founder Steve Wozniak that he has found a reproducible, software-based error causing unintended acceleration in his 2010 Prius, a car not on the recall list.

Either of these assertions may prove to be incorrect, but the mere fact that they’ve both reached the national news media suggests that Toyota has a bigger problem: brand hubris.

Brand hubris, shortly stated, is the tendency of successful brands to believe that they’re infallible in the areas of their greatest strength.  This puts them at greater risk of a catastrophic error.  A good example from the last decade was Dell, which once had an unassailable reputation for quality and customer service which was brought down by a single blogger (Jeff Jarvis).

In Toyota’s case, their sterling reputation for quality led to a customer service apparatus unable to comprehend the concept that a major error could have made it through their system undiscovered.  This attitude dictated the company’s response to early complaints – rejection and legal squabbling and forced the issue to bubble into a crisis before senior management would acknowledge it.

That same attitude guided the company when it refused to engage with Steve Wozniak, and kept it from getting its story straight with the National Highway Transportation Safety Administration.   Both of those were costly PR mistakes.  For this reason, it seems likely that Toyota’s problems will multiply, not ameliorate.

The lesson for other brands is this: don’t assume that you can’t screw up, even in the areas of your biggest strength.  Reward those who identify problems early.  Realize that some of the most important information on the quality of your products comes from your customers and don’t punish customers who take the time to complain.

This entry was posted on Tuesday, February 2nd, 2010 at 1:35 pm and is filed under commentary, Toyota. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.