Toyota: When, not if

How could this happen to Toyota?  How could a company with such a great reputation for quality have a quality problem leading to the recall of millions of cars?

Now that the shock has worn off, we can have some perspective.  Toyota has had a great run.  Far longer than most companies before they hit a rough spot.  But inevitably something will happen to, or at, any company.  Every company eventually faces something that creates a disruption.  What is striking in this case is that the problem goes right to the heart of what Toyota built their reputation on — quality.

The question is really one of “when” not “if”.

The disruption can come from any place — a scandal, a product defect, a shift in consumer’s preferences, a new technology, a natural disaster.

How the company responds to a crisis is far more telling of character than the fact that it got into a crisis in the first place.  This is the real moment of truth.

Keep in mind that speed of response if a relative measure.  If Toyota rushes too quickly and doesn’t get it right, that will cause collateral damage to their reputation.  If they respond far too slowly, it will also create damage.

Toyota is better served in the long run by discovering the full extent of problems — knowing that they are now under a microscope — and solve them in a timely way.  Congressional investigations, leaked powerpoint reports…there are many things that will suddenly be given closer scrutiny.  Rushing to a solution and declaring that all is well in this the best of all worlds…that’s just a gamble.

Don’t forget that Ford and VW had so major recalls.  And Audi faced their own sticking accelerator problem that was first reported on CBS’ 60 minutes during prime time.  BusinessWeek keeps a tally on these things.

BusinessWeek on Total Recall

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