Tragedy at Toyota: How Not to Lead in Crisis

Published: February 22, 2010
Author: William George

Toyota's ever-widening problems are a tragic case study in how not to lead in crisis.
Under the media spotlight, Toyota CEO Akio Toyoda, grandson of the founder, went into hiding and sent American CEO Jim Lentz to make apologies. (Editor's note: Toyoda has agreed to appear before a Congressional inquiry this week.) Meanwhile, he let serious product quality issues spiral out of control by understating safety risks and product problems. This left the media, politicians, and consumers to dictate the conversation, while Toyota fumbled the responses.
Disingenuous quasi-apologies and disjointed plans for resolution have been Toyota's substitute for crisis response. As accounts pour in about declining quality, the company parades out relatively unknown mid-level managers to quell the firestorm.
Toyota needs a credible leader with a strong, cohesive plan. Mr. Toyoda is anything but. His uninspired words of optimism from Davos only unnerved customers and U.S. regulators. Meanwhile, Ford and GM are working hard to regain the market share they lost at Toyota's expense.
How can Akio Toyoda get Toyota back on track? I offer recommendations based on my recent book, 7 Lessons for Leading in Crisis.
1: Face reality, starting with yourself
2: Don't be Atlas; get the world off your shoulders.
3: Dig deep for the root cause.
4: Get ready for the long haul. These problems won't just fade away. In fact, they are likely to get worse before getting better.
5: Never waste a good crisis. It provides a unique opportunity to make fundamental changes required to restore the brand quality.
6: You're in the spotlight: follow True North. In a crisis, people insist on hearing from the leader.
7: Go on offense; focus on winning now. Coming out of this crisis, the market will never look the same.
This is a challenging menu, and this crisis is the true test of Akio Toyoda's leadership. Is Toyota up to these challenges?

Lee el artículo completo en el Harvard Business School Newsletter.