Toyota Exhausted

The so-called “quality” car — that has stood out for decades since the foreign car invasion of the U.S. many moons ago — has finally “collapsed,” so to speak … or at least its reputation has. Its business may follow, if the blunders continue and Toyota fails to publish a “repair plan” that customers can believe in.

First the company said it was the floor mats that caused the stuck-accelerator problems, then electrical issues in the accelerator itself and lately it is braking problems in the Prius. There has also been a parade of communications mistakes, while people are dying due to these problems.

The headline in Sunday’s New York Times is “Toyota Has Pattern of Slow Response on Safety Issues.” Authors James Kanter, Micheline Maynard and Hiroko Tabuchi cite design changes to correct safety issues that the company has been making — without telling customers about the underlying problems with cars already on the road. Yet according to the NYT, the CEO has balked at questions regarding whether the company has ever withheld safety information.

Further, while the CEO has issued a couple of apologies, he has been delegating the task of reassuring American consumers on various key TV shows and plans to do the same at Congressional hearings next week. The executive selected to be the “face” of the company has none of the operational responsibilities required to speak to these issues.

So what do we have here? Slow response, when immediacy is a fundamental in crisis communications. Lack of clarity and transparency, when being above board with customers is the only way to save your skin, if you can save it at all. Lack of accountability, when accountability means the CEO is front and center.

All the fundamentals of crisis communications are being violated, not unlike the missteps of Enron, Worldcom, Arthur Andersen and even Tiger Woods. As the great American philosopher, George Santayana, has said, “Those who cannot remember the past are condemned to repeat it.” Is Toyota suffering from a case of “historical amnesia” so profound that the company’s communications efforts have collapsed in exhaustion?

Technorati Tags: Prius, Toyota,
safety issues, breaking problems,Hiroko Tabuchi, James Kanter, Micheline Maynard

INDIA REVEALED: 10 SURPRISING FACTS

On Monday, just back from India, I posted my impressions of Mumbai (formerly Bombay) in my blog . I tried to
capture the kaleidoscopic quality of a city that combines the old and the new, extreme poverty and astonishing economic growth. Despite the city’s (and indeed India’s) pressing problems, India is definitely beginning to take its rightful place on the world stage.

Today, I’d like to drill down a little deeper and share with you 10 interesting facts about the country that Goldman Sachs has predicted “could be 40 times bigger by 2050.”

1. At 1.27 million square miles, India about a third of the size of the US.

2. India is the #2 most populous country in the world (with nearly 1.16 billion people), just behind China. In fact, India has almost four times the population of the United States.

3. Like the US, India is a federal republic: power rests with the voters who chose their governmental representatives. Everyone age 18 and older has the right to vote.

4. The two most prominent religions in India are Hinduism (80.5%) and Islam (13.4%), according to the 2001 census. However, Jainism and Buddhism have been practiced in India for nearly 2,500 years. What’s more, Jews and Christians have lived continuously in India since 200 BC and 52 AD, respectively.

5. There are 15 official languages in India. Hindi is most widely spoken language and the primary tongue of 41% of the population, but English is the most important language for national, political and commercial communication.

6. Slightly more than half of India’s work force is in agriculture, but services are the major source of economic growth, accounting for more than half of India's output, with less than one-third of its labor force.

7. India’s top industries are: textiles, chemicals, food processing, steel, transportation equipment, cement, mining, petroleum, machinery, software and pharmaceuticals.

8. With more than 427 million mobile telephones in use, India currently outranks the U.S. in terms of cell phone subscribers. (China is #1.)

9. There are 81 million internet users in India … more than in Canada and the U.K. combined.

10. At $3.55 trillion in 2009, India’s GDP (purchasing power parity) is ranked #5, after the EU, US, China and Japan.

SOURCES: CIA - The World Factbook and the National Portal of India’s Interesting Facts about India.

Technorati Tags: india, Goldman Sachs,
Mumbai, communications, public relations, Makovsky

It's Happening in Mumbai

I have just returned from a week of business meetings in Mumbai (formerly Bombay), India, with a range of leading companies in multiple industries. Taking all the meetings as a whole, I saw a dynamic business community rearing its head, both nationally and internationally. There were those companies that saw enormous expansion within the Mumbai area only and, with a population nearing 20 million there, that opportunity is apparent. But there were also several $500,000+ firms that see market opportunities in the U.S. and Europe. Our schedule was set up by our IPREX partner firm in Mumbai: Concept, a leading public relations and investor relations firm and 2007 “Agency of the Year” in India, which has offices in key cities.

Mumbai is clearly a communications-conscious business community. Firms we spoke with saw the importance of communications in terms of building company value and launching new products. They were as concerned about the implications of social media and how best to channel its uses as we are. They realize that proper use of communications can enhance their growth, and they see enormous merit in moving in the right direction.

Physically, these corporations were generally set back behind gates in courtyard settings, as opposed to street-front structures. This certainly speaks to security concerns. Understandably, security was strong at both our hotel and other public buildings. At many, security personnel checked cars before entering by lifting the hoods and searching the trunks. Next, individuals walked through a security gate and then were scanned with an electronic wand.

Mumbai is still a contrast in styles. There were quite a few more skyscrapers since we were there in 2005, but by and large it remains a developing city. You still see an occasional cow walking in the street, and there are still 8-9 million people living in slums.

Nevertheless, there is a momentum in Mumbai that is reminiscent of New York. You can feel the electricity the minute you enter the city. The traffic is among the most crowded in the world because there is no underground or aboveground transportation system (although one is now under construction). The city has some stunning architecture, much of it built during its British colonial days. Dotted with more modern structures, the elimination of its slums, and hopefully cleaner buildings from yesteryear, Mumbai has the potential to be a masterpiece, contrasting the old and the new.

Technorati Tags: IPREX, Mumbai, slums, India, Concept Communication

CUSTOMER VS. EMPLOYEE: Challenging Conventional Wisdom

The customer is number one. This is a fundamental tenet of business…and, might I say, business folklore. Some years ago, business executive Hal Rosenbluth wrote a book called The Customer Comes Second . If Rosenbluth is right, who is first? He says the employee.

Now there is a study — cited in The New York Times — that suggests Rosenbluth may be right. The employee may indeed be more important than the customer. The study found that strong sales growth was correlated with an organizational culture in which employees thought more highly of the company than did society at large.

In fact, there was 7.46% rise in sales for the companies whose employees like the company much more than consumers did; and there was 9.02% drop in sales for companies at which employee opinion was far below customer opinion.

This proves that employee impressions of a company are critical to its success...and critical to attracting business. Employees are the face of the company. They are the ambassadors who make a difference.

In fact, if employee attitudes are much better than expected, customer approval of the company actually increases exponentially — sometimes even surpassing employees’ approval — and sales go through the roof.

This study leaves no doubt whatsoever about the importance of employee relations programs and what it takes to win over customers … whether you see them as #1 or #2.

Technorati Tags: Hal Rosenbluth, New York Times,
customer, employee,communications, public relations, Makovsky