The Crisis Management Lesson From Toyota And Gm

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The Crisis Management Lesson from Toyota and GM: “It’s Our Problem the Moment We Hear About It”

Delay in confronting crises is deadly. Corporate leaders must have processes for learning of important safety issues. Then they must seize control immediately and lead a systematic response. Crisis management is the ultimate stress test for the CEO and other top leaders of companies. The mantra for all leaders in crisis management must be: “It is our problem the moment we hear about it. We will be judged from that instant forward for everything we do—and don’t do.”
These are key lessons for leaders in all types of businesses from the front page stories about Toyota’s and GM’s separate, lengthy delays in responding promptly and fully to reports of deadly accidents possibly linked to product defects.
The news focus has been on regulatory investigations and enforcement relating to each company, but the ultimate question is why the company leaders didn’t forcefully address the possible defect issues when deaths started to occur.
On the recent regulatory front:
• Toyota just agreed to pay $1.2 billion in a deferred prosecution agreement with DOJ and accept a safety monitor for failing to disclose to regulators—and indeed misleading them—about accelerators that became stuck on certain types of floor mats or because of certain elements in the accelerator itself. The problem of uncontrolled speeding and deadly crashes began to appear in 2007, but it took four years, and deceptive

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