Toyota: A Lesson in Ineffective Leadership?

To say that Toyota is in the midst of a PR nightmare would probably be considered an understatement. I have been a loyal Toyota owner for many years, as has every member of my family, but as of this week I find myself questioning why… and if I will remain a Toyota owner. The unfortunate events that ultimately led to a massive recall should not have occurred and it would not have, if those in leadership positions would have demonstrated effective leadership principles.

Bob Daly, Toyota Motor Sales U.S.A, senior vice president, recently recorded a video in which he denounced the critics who reported that several Toyota vehicles were unsafe and could have potentially been the cause of several accidents and deaths. http://www.youtube.com/watch?v=ogwHePDVoaw.

While I realize that Mr. Daly is in charge of sales, and as such, the bottom line profit is his main objective, there are some things that you just don’t do:

1. You never take for granted that your customers will remain loyal to you- If an organization cannot show you that they care about you and your safety, chances are they don’t.

2. Don’t make excuses-There are a lot of companies that have been faced with recalls. They handled them with grace and were able to recover. Remember Tylenol?

3. Get all of the facts first- Do not post a video stating that the critics are wrong and then proceed to downplay the severity of a problem. Dig deeper and exhaust every possible resource that will substantiate your denials.

4. Place value on people verses profits-Profits can be recouped; people and loyalty to your company are irreplaceable.

5. Be accountable and take action- One bad report is one too many, yet when you look at how much time has elapsed since the time of this massive recall, it is clear that a sense of urgency was warranted but did not occur.

We talk a lot about what it takes to be effective leaders, but in this case, Toyota has provided an example of what you should not do as a leader.