When a high profile company like Toyota unexpectedly lands in “quick sand” the rest of us stand in stunned silence or quickly point out what they could have done differently. Certainly, Toyota’s handling of the situation is reminiscent of the Tiger Woods scandal, specifically, ‘don’t deal with it immediately’. The idea that most people would forget about this – in time – is a less than courageous move.

Toyota and Tiger should be seen, by business owners, not as spectacles but as reminders. The difference between ‘us’ and ‘them’ is our approach to managing a crisis. Business leaders, small and large, should pause to prepare for their own crisis situations.

A crisis by definition is a low probability – high impact event! Most businesses plan for high probability – high impact events and spell out risk mitigation activities in the strategic or business plan. Low probability, low impact events are handled with relative ease as a part of our daily operations; as are high probability – low impact events.

The blind spot for us are events we deem unlikely to occur but if that one event occurs, it will change the course of business. A crisis response strategy will make, shake, or break even the ‘best of the best’. Execution of the plan is paramount!

Execution in Crisis Mode

A quick, prompt response sets the tone for media interaction and public interpretation. The initial response allows the company or its public relations team to establish the flow of information rather than the media. If not dealt with immediately you’ll find the media will control the initial public opinion.

Be open and honest about the issue. The media and public stakeholders should have easy access to company players and information. Otherwise, the sentiment leaves the public wondering about company’s integrity and might damage its reputation.

Allow for the constant flow of information and a consistent message. Frequent updates as developments or understanding unfold demonstrate responsibility and control by the organization. Inconsistent or conflicting message erode trust.

Show compassion for consumers, employees, and others affected by the problem. Compassion coupled with action also sends a message that organization is in control and taking appropriate action.

Perhaps, Tiger Woods and Toyota, have crisis management plans. I am uncertain of what the expected outcomes of either plan; except, Toyota and the Haitian crisis have re-established perspective; and, for now, the heat is off Tiger Woods. According to Kraemer (2003), “leadership, values, integrity and credibility are not items you can pull off the shelf when times are tough” (p. 246).

Toyota has already launched is reputation recovery ad. Is it too little too late? Tiger is still M.I.A. How would you grade the two?

Sources

Kraemer, H. M. J. (2003). Doing the right thing: Values-based leadership is not an oxymoron in corporate America. Vital Speeches of the Day. 69(8), 243 – 247. Retrieved January 30, 2010, from University of Phoenix Proquest Database.

Tritz, T. W. (2002). Crisis management strategy utilized by the United States Department of Defense following the terrorist attack on America: A case study. Journal of Undergraduate Research. Retrieved February 8, 2010, from http://www.uwlax.edu/URC/JUR-online/html/2002.htm

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Renae Sanders is the Managing Director at KRS Consulting, LLC, a management consulting firm specializing in organizational relationships. Believing people are the link between strategy and success, Renae works with organizations, leaders, and managers to strengthen internal relationships. You can reach her at renae@krsconsult.com.