- Toyota Reestablished Trust. President, Akio Toyoda, grandson of founder, Kiichiro Toyoda, publicly said he “can’t begin to express remorse,” over the grave concern this has caused. “I apologize from the bottom of my heart for all the concern that we have given to so many of our customers."
- Toyota Recalled Problematic Products to mitigate further injuries, liabilities and damage. This impacted sales, which declined by almost 9% since the massive recalls began September 2009. Yet the sales drop was far less than analysts predicted.
- Toyota Replaced Defective (or Suspicious) Items in about 10 million vehicles recalled globally for faulty floor mats, sticky gas pedals, braking software glitches and steering malfunctions.
- Toyota is Reinventing Products with new features and safeguards that ensure the problem is fixed and never happens again. Recently Toyota unveiled the new 86 coupe to appeal to sports car lovers, and displayed a plug-in version of its best-selling Prius hybrid.
- Toyota Reported andPublicized recall fixes, and dealers stayed open all night to accommodate customers seeking them.
Expect Toyota to rebound from its recall challenges of 2009 - 2010. Toyota, the world's top carmaker since 2008 is noted for a culture of innovation and quality. As the cultural values that invented the Prius prevails, and its quality focus is reinforced, Toyota will overcome challenges and keep its competitive position. Toyota already has followed the 3-D Leader’s five R’s model to rebound from product problems:
The Three-Dimensional Leader: Negotiating Your Mission, Resources and Context provides an interview of Bill Dake, the architect of the Stewart’s convenience store chain that achieves $1 billion in annual sales. Dake emphasizes the relational aspects of selling through what he calls the “GREAT” sale strategy. GREAT stands for greet, read, evaluate, associate and try. He trains store partners (sales staff) that selling is achieved by striving to meet customers’ needs by doing the following:
Companies like Toyota can bounce back from adversity (such as the sticking accelerator pedal problem) if they follow these five steps, modeled after how Johnson and Johnson bounced back from the Tylenol tampering scare of 1982. The Three-Dimensional Leader: Negotiating Your Mission, Resources and Context, notes that “Many readers are too young to remember how Johnson and Johnson bounced back from the Tylenol tampering, but analyzing it’s response to the crisis gives us a template that all should follow.”
J&J modeled these steps to overcome adversity:
Remedy and ACT
Johnson and Johnson responded to Tylenol tampering localized to the Chicago area by undertaking a nationwide notification.
Recall the Product
It is estimated J&J recalled 31 million bottles of Tylenol with a retail value at that time of over $100 million.
Replace Defective Items
J&J offered to exchange solid tablets for any or all capsules consumers had purchased.
Reinvent the Product with New Features
About a month after the recall, J&J reintroduced new, triple-sealed capsules, a safety feature in which consumers had confidence.
Over the next several years, Tylenol was effectively priced and advertised to become the most popular over-the-counter pain medicine in the nation.
Johnson and Johnson’s conscientious, straightforward, values-driven action, coupled with its ability to negotiate the new context posed by the threat of product tampering, resulted in an amazing product rebound less than a year later.