Thursday, February 25, 2010

Toyota: doomed by its own culture?

I've resisted posting on the Toyota mess up to this point feeling that mainstream media may be piling-on a bit. The debacle is not going away. It seems a new embarrassment for the company surfaces roughly once a week.

A recent article in Automotive News by James Treece sheds new light on the culture inside Toyota and how that may be the root cause of the company's troubles. Treece spent 22 years living and reporting on the auto industry in Japan and brings firsthand knowledge of the situation.

Treece's article, while a bit inside baseball, paints a clear picture. Toyota's insular, secretive culture drove their attempts to stifle early safety concerns rather than openly vet and address them. Initiatives to suppress the damage by playing it down with the media, strong-arming regulators and what appear to be partial technical fixes have caused the biggest brand image backfire in modern marketing history.

Toyota rode one attribute, "quality" to the top of the automotive category. That's gone now. We won't know for years if they will be able to reclaim it. I'm not sure their snazzy styling or impressive handling will carry the day in the absence of the quality gene. The irony of Toyota defaulting on it's core equity is not lost on owners of Toyota vehicles.

What's missing at Toyota is the ability to be open and transparent internally and with the public. A transparent corporate culture is not a "nice to have" or a fashionable marketing trend. It's an essential means for earning the public trust. The modern marketplace rewards brands that behave with integrity. It punishes those that demonstrate they are not trustworthy. As a Toyota owner, I feel the sting every time I turn the key.