Aristotle Called it “Ethos,” referring to the credibility of the messenger — I think Toyota has an “ethos” problem
(yes, I have posted on this earlier. I keep learning more, as we all do. And it is a big, big deal. Actual people died. And there is quite an important business lesson in here).
It is Rhetoric 101. A speaker has to be both qualified and trustworthy. Lose either, and you have a bad/failed messenger.
So let’s start by listening to the words:
Here’s the key excerpt from the commercial:
“History has shown a good company will fix its mistakes. But a great company will learn from them… We’re working to restore your faith in our company by providing you with safe, reliable vehicles, like we have for over 50 years.”
So says the new Toyota Commercial. I hope it is true. But I’m not sure they have yet learned from their mistakes. Because the mistake is not “we had a deficiency in our cars,” the mistake was “we had a deficiency in our cars, we knew about it, and we kept selling them and let people keep driving them.” The mistake was not the deficiency, the mistake was that they kept it pretty quiet and did not act.
And cars crashed… and people died.
News item: State Farm warned the NHTSA about Toyota’s acceleration problems in 2007. Toyota certainly got the word then.
State Farm insurance said it noticed an uptick in reports of unwanted acceleration in Toyotas from its large customer database and warned the National Highway Traffic Safety Administration in late 2007. NHTSA officials said the report was reviewed and the agency issued a recall later that month.
News item: Oops – State Farm has now double-checked, and the NHTSA was first notified in 2004. Toyota got the word then.
In the latest development in the Toyota recall crisis, State Farm, the US insurer, said it had reviewed its records and found it had contacted safety regulators in 2004.
News item: Toyota finally issues actual recall, January 21, 2010
Toyota said Thursday it is recalling 2.3 million vehicles in the U.S. to fix accelerator pedals that can become stuck, the latest in a string of quality problems that have bedeviled the Japanese automaker.
Am I sure that they kept it hidden? Just look at the time line demonstrated above. For at least part of those “50 years,” they kept dangers hidden – dangers they knew about.
Now, I don’t run a big company. I don’t know what I would do if I had a problem on my hands that would cost billions of dollars. But I am certain that there are families who lost loved ones in the crashes that occurred because Toyota knew of the problem and did not deal with it. For at least 5+ years. (The first warning came at least as early as 2004. And call me a cynic, but don’t you think someone within Toyota might have known something before the first State Farm notification?!)
Ask these grieving families what Toyota should have done, and I’m pretty sure they would have said this: “Toyota should tell people not to drive these cars until we figure it out, and fix it!”
Here’s my problem – why should we trust a company, even after watching such a nice commercial, when they knew about the problems, and violated people’s trust, for at least half-a-decade?
For a company, credibility is the gold standard. That standard is quite tarnished for Toyota. And, on a personal note, I come close to resenting their commercial.
(And — on a better note — maybe State Farm really is like a good neighbor!)
A business model based on trusting the customer
Anna Bernasek
At the conclusion of Chapter Six, she shares a number of valuable insights when supporting the concept of a business model based on trusting the customer.
“Business models that demonstrate trust in the customer have an exciting potential for growth. Most businesses today tend to ignore the issue or take it for granted. Of course, to actively trust the customer, a company first must make sure its own house is in order. You can’t sell faulty or unreliable products or services and then expect the customer to treat you fairly. But when you do your best on behalf of the customers and then trust the customers to do their best on behalf of you, you can create something lasting and valuable. People have a deep need to be trusted. They value the trust of others, and in general what people value they will pay for. It boils down to what Dale Carnegie advised long ago: give the other person a fine reputation to live up to. On that simple principle a commercial empire can be built.”
It is no coincidence that the same companies that are annually ranked highest in terms of being the most trustworthy are also annually ranked highest among those that are most profitable: L.L. Bean, Overstock.com, Zappos, Amazon, Lands’ End, Newegg, J.C. Penney, QVC, Coldwater Creek, and Nordstrom.
Book Review: Drive
Drive: The Surprising Truth About What Motivates Us
Daniel H. Pink
Riverhead Books/The Penguin Group (2009)
As the subtitle correctly indicates, Pink focuses on “the surprising truth about what motivates us.” The revelations he shares were generated by a five-year research project that involved thousands of test groups and individuals as well as dozens of research associates whom Pink duly acknowledges with obvious admiration as well as appreciation. “This is a book about motivation. I will show that much of what we believe about the subject just isn’t so – and that the insights that [Harry] Harlow and [Edward] Deci began uncovering a few decades ago come much closer to the truth.” Pink goes on assert that most organizations (regardless of nature and extent) formulate strategies for motivation based on faulty assumptions and then, however well-executed these strategies may be, fail to achieve their objectives. These organizations continue to pursue practices (e.g., shirt-term incentive plans and pay-for-performance schemes) “in the face of mounting evidence that such measures usually don’t work and often do harm. Worse, these practices have infiltrated our schools, where we ply our future workforce with iPods, cash, and pizza coupons to `incentivize’ them to learn. Something has gone wrong.” Indeed, as Pink convincingly explains, something has been wrong, very wrong, for many years.
Pink carefully organizes his material within three Parts. In the first, he examines the flaws in reward-and-punishment system and proposes “a new way to think about motivation”; in the second, he examines the three elements of Type I behavior i.e. autonomy, mastery, and purpose) and illustrates how individuals as well as organizations “are using them to improve performance and deepen satisfaction”; and in the third Part, he provides what he characterizes as a “Type I Toolkit, a wealth of resources, to help each reader create an environment (in collaboration with others) in which Type I behavior can flourish.
I especially appreciate Pink’s provision of real-world examples to create a context, a frame-of-reference, within which to anchor as well as illustrate his core concepts. In Chapters 4-6, he rigorously examines the three elements of Type I behavior (i.e. autonomy, mastery, and purpose) and explains how and why they are separate but interdependent. All three are essential to help achieve what he characterizes as “a renaissance of self-direction.” Motivation 3.0 presumes that workers want to be accountable – “and that making sure they have control over their task, their time, their technique, and their team is a pathway to destination.” With regard to mastery, Type I “has an incremental theory of intelligence, prizes learning gals over performance goals, and welcomes effort as a way to improve at something that matters. Begin with [a Type X] mindset, and mastery is impossible. Begin with the other [i.e. Type I], and it can be inevitable.”
Wikimedia Strategy: Ideas for Strengthening an Online “Tribe”
Harvard Business School
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For those of you who have been following Wikipedia’s open strategy initiative on this blog, you’ll know that one of the goals of the work has been to strengthen the health of the Wikipedia community of contributors who create and use its online encyclopedias. In a healthy community, contributors feel a sense of affiliation and social bonding, they come from diverse backgrounds and expertise areas required to accomplish the project’s expansive work, remain open to differences of perspective and able to resolve disputes respectfully. “Community health” is a hot topic among participants engaged in developing the Wikimedia strategy, both within the broader Wikimedia community and outside it.
Our hunting and gathering of ideas for improving community health got a booster shot last month when Wikimedia Foundation executive director Sue Gardner, deputy director Erik Moeller and I had the opportunity to spend the day with Wikipedia’s founder, Jimmy Wales, as well as with Clay Shirky, adjunct professor in NYU’s graduate Interactive Telecommunications Program and author of Here Comes Everybody: The Power of Organizing Without Organizations. The subject of the day was the state of the Wikipedia community, and its objective was to generate ideas. Our discussion drew on the work of two Wikimedia strategy task forces and generated valuable insights for both Wikimedia and for others thinking about creating social networks that grow steadily, deepen participation and build purposeful community. Here are some tenets we surfaced:
[Note: Here is the second tenet that Newstead discusses. The others can be read in the complete article by visiting dailyalert@email.harvardbusiness.org.]
Any community establishes norms in the form of customs, language and habits that make it easier for the community to function effectively. Often these norms are a modification of those brought to the community by some core members. In the case of Wikipedia, norms brought forward and reinforced have constituted, in Jimmy’s words, “geek culture.” At some point, if the community wants to open up and increase diversity, it needs to make it easier for newcomers who aren’t from the founding culture to learn the ropes and contribute. The existing community needs to find ways to acculturate newcomers and tackle its own biases that inhibit openness. For instance, Jimmy stated that “Star Trek and the American Girl doll series receive different treatment within Wikipedia, simply because the culture loves science fiction and sees similar pop culture stuff as ‘foreign’ and ‘wrong’. This needs to improve.”
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Barry Newstead is a partner at The Bridgespan Group currently supporting Wikimedia’s open strategy process.
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