has done many things right in responding to 

its current crisis: its spokespeople have filled the media with messages of reassurance,
its PR people have blogged and tweeted non-stop to fill the information vacuum, its website is full of details about the recall and its
call centre is working flat out to deal with customer enquiries. So why is its hard-won reputation still facing the biggest challenge in
its corporate history?
Analysis of Toyota's handling of the incident provides clues as to why – despite a barrage of communication over the last fortnight –
it still seems to be fighting a losing battle. And the key to its problems lie primarily in what happened before the crisis erupted, rather
than its response to it (though this has been less than perfect).

Central to Toyota's problem is its perceived delay in identifying and addressing the situation in the first place. Whatever Toyota says
now, and however well it acts, there is a sense that it ignored the problem until it was forced to take action. Corporate denial
appears to have been the order of the day, with the company following the advice of the Japanese proverb: "If it stinks, put a lid on
it."

The most effective crisis management takes place before the problem escalates out of control during the "incubation" phase. Some
of the biggest potential crises have been identified and addressed before they ever escalated out of control: this is crisis
management at its best. This requires an organisational culture that is vigilant for potential crises, has open lines of communication
from staff to management, and a willingness to address unpleasant truths.

In contrast, it seems Toyota had a culture ill-equipped to quickly identify and address flaws. The challenge is created by two
elements of culture: firstly, an obsession with quality, which means that anything less than perfection is seen as shameful and
embarrassing. As a consequence, problems with quality are literally inconceivable and denial takes over.

The second interlinked element of culture is a hierarchical approach to management and a lack of open communication. Where this
exists, junior employees who are best placed to spot early signs of crisis feel unable to point out flaws. As a result, problems go
unnoticed and unresolved until they explode into a major crisis. Much better to put the fire out before it has reached this stage.

Another reason why Toyota has such a major challenge on its hands is that this crisis strikes at the essence of its reputation.
Research from the thinktank Oxford Metrica shows that when a crisis strikes at the heart of brand values, it has the ability to do most
damage. Toyota has built its reputation on quality and reliability, and anything that calls this into question is especially threatening.
The same principle applied toCadbury when Dairy Milk was found to contain salmonella in 2006: a perception that the brand had
failed to put the health of its customers first struck a painful blow to a business built on wholesomeness, family and community.
This is a lesson for all organisations: understand what lies at the heart of your brand and be especially vigilant for any activity that
runs counter to it. It is essential that the company remains true to these values, not just in the run-up to a crisis but also in its
approach to crisis management as well. Richard Branson interrupted his holiday to fly to the scene of aCumbrian train crash in
2007. Of course, he was doing what he felt to be right, but at the same time his actions embodied Virgin's customer care. Anything
less could have caused serious damage to the brand.
As the Toyota crisis has rumbled on over the last fortnight, the company has failed to get ahead of events and take control. It looks
like the crisis is managing Toyota rather than vice versa. Avoiding this fate requires decisive action taken in a co- ordinated way.
The fact that Toyota has had to announce a second recall only days after the first one indicates an organisation that is responding to
events rather than setting the agenda. Compare this with Mattel, which managed a crisis of a similar magnitude, in 2007, when
faced with safety concerns about its toys. It announced an immediate recall and its chief executive Robert Eckert devoted weeks to
communicating the steps the company was taking to address the issue. As a consequence, its brand remains strong.
The issue of the company spokesperson is an interesting one. Conventional wisdom dictates that the chief executive should be the
face of the organisation in a major crisis. I would endorse this view, so long as the chief executive has the requisite skills to perform
this role. No chief executive can be absent from the public eye when the business is in the middle of a crisis but this does not mean
that the chief executive must be the main spokesperson. Watching Eurostar's chief executive, Richard Brown, fumble his way
through media interviews when its trains broke down in the Channel tunnel over Christmas will have done nothing to protect the
reputation of the organisation. And Toyota GB's managing director, Miguel Fonseca, almost certainly caused more confusion and
concern as a result of his interview with BBC Breakfast on Friday. In neither case was it the right decision to field the top man.
It is not necessarily the reality of how a business manages a crisis that will determine its fate. It's how the organisation is perceived
to have managed the crisis: in many ways a crisis turns into a very public, very high stakes audit of management's competence. Get
it right and the organisation's reputation and value can be enhanced; get it wrong and serious – sometimes terminal damage – can
result.

Within this context, the role of the media spokesperson is pivotal, even in this age of social media. Observers draw conclusions
based not just on what the spokesperson says, but also their body language, demeanour and tone of voice. Many senior, successful
businesspeople turn a whiter shade of pale when a camera or microphone appears under their nose: executives like these are
unlikely to represent their organisation well in a crisis. Even more importantly, they will be ill-equipped to communicate information
clearly and simply to members of the public affected by the crisis. So businesses must identify their best communicators, train them
beforehand and provide plenty of practice of dealing with a media interview before they step into the white hot glare of media
scrutiny amid a product recall.

What happens before a crisis – creating the right culture to avoid crisis incubation, developing workable crisis management plans
and processes, and training managers likely to be part of a crisis response team – will play a large part in determining the fate of the
organisation in the event of a crisis. Full recovery requires continued communication – and actions – to regain the trust of
stakeholders affected by the crisis.

If Toyota's recent troubles encourage more businesses to recognise the impact that crises can have on a business's long-term
reputation and take steps to protect themselves as a consequence, then at least some goodwill has come from recent events.

Jonathan Hemus is director of Insignia, a reputation management and communication consultancy, specialising in crisis, issues and
online reputation management

Data summary

Toyota recalls by place and problem

Hybrid Accelerat Slipping TOTAL

Region/count braking, or pedals, floor mat RECALL
ry 09/02/20 28/01/201 29/09/20 PROBLE
10 0 09 MS
* About 2.1 million vehicles are covered in both floormat and
pedal recalls. Total vehicles approx: 8.54m
Canada 8,450 270,000 400,000 678,450
China   75,552   75,552
Other 44,500 1,530,000   1,574,500
Europe
Japan 223,000     223,000
US 146,550 2,210,000 5,350,000 7,706,550
UK 8,500 180,000   188,500
Other 5,000 180,000   185,000
TOTALS 436,000 4,445,552 5,750,000 10,631,552
*