Arrogance of Power Can Damage, if Not Kill, a Brand

Within the political arenas there is carnage on the left and the right from the arrogance of power. We have grown accustomed to witnessing imploding Governors and Senators with different sex scandals all in the belief that they would not be caught. President Bush’s claim to have “earned political capital” after only razor-thin election victory or Nancy Pelosi/Harry Reid believing that the most recent Presidential election gave them the power to do what they want without engaging the other party’s ideas. Even the cleanest of “brands” in Tiger Woods fell victim to the arrogance of power. Yet the same mistakes are repeated overtime—

In the corporate world we have history of arrogance too. But in this continued worsening news story of Toyota there is unfolding an unexpected arrogance. Toyota is to quality what Volvo is to safety. Years and years of hard work helped build Toyota to be recognized as the “quality” leader—which led to its overtaking General Motors as the largest car company in the world.

Then the recent recall—I mean recalls—one right after another. Consumers are generally forgiving if someone takes immediate responsibility, makes it right, and apologizes. Mistakes can happen.

But as this story rolls out it gets worse and worse. Known issues that were not revealed. Slow response to taking responsibility by Toyota. Delayed issuing of recalls—now totaling over 8.5 million in the US alone. Evidence of an intentional plan to not provide recalls. Hiring of former National Transportation Safety Board employees who in essence lobbied their former colleges to consider some of the facts as less important then they were.

What was Toyota thinking? Here in the middle of the worst economy—arguably even worse for the automobile industry—they start to get a big head?

This has REAL impact. Last week a survey by Kelly Blue Book showed 27 percent of the auto consumers considering buying a Toyota prior to the recall now said they are looking at other brands instead. OUCH! It now is also impacting the used-car market where shoppers are shying away from anything “Toyota”

Going forward, this will be a test of Toyota’s ability to handle the crisis—and whether it can re-shine a now tarnished brand. There are examples of companies that did it right (think Tylenol scare—which wasn’t even their fault) or those that did it poorly (think Exxon Valdez).

Beware the arrogance of power. Trust is a hard thing reestablish.