I believe that I overestimated how well Toyota would handle its crisis. When they made the decision to withdraw cars from the market, I applauded. They took the right decision to shore up the confidence of their customers and potential customers.
However, I did not foresee an organization that seems paralyzed to say and do the right thing in a timely manner. The Japanese culture may be holding the company back from meeting the needs and interests of US customers who are the ones impacted by the sticking accelerator problems. The Japanese are not expected to admit mistakes publicly as readily as are Americans. Their companies do not practice transparency in the same way expected of US companies. The Japanese have built their success on the art of imitation; not the art of innovation. They have taken watches and made them better than the Swiss. They have taken cars and made them better than the Germans. They take inventions or innovations from others and make them better. Public criticism is difficult, if not impossible, in Japanese culture. This holds back invention and innovation--the risk of failure is too great.
I think that the complexities of the Toyota corporation has gotten in the way of effectively dealing with this crisis. They centralized this problem, but that meant taking it to the other side of the world from where the issues are the greatest. Mr. Toyota has apologized publicly--finally! However, the US CEO, Lentz, has been used more like super salesman on TV talk shows than as a CEO of a company. Lentz's background is sales and he has looked like the company salesman rather than the company leader. He has shown little contrition and has been more focused on rebuilding sales. All the while, rumors, innuendos, new stories, and plantiff attorneys cases are all building. Frustration and fear are also building. Competitors are offering incentives to Toyota customers to change cars. The clock keeps ticking and Toyota seems to treat this as a manufacturing problem. This is a crisis of confidence in the qualities that made Toyota great--quality and reliability. Take those away and it is just another car company.
I had thought that Toyota would not be inexorably hurt by this crisis since I had assumed that their withdraw of product from the market would be followed quickly by communications with its owners and the public of what it was doing, day-by-day. That hasn't happened. I have been surprised and dismayed. They may be hurting their brand and reputation inexorably.
An indication of how poorly they are communicating are the ads they have been running. An open letter from Lentz to the American consumers reads like a recall letter. The logo on-top is "Toyota: Moving Forward". Isn't "moving forward" the problem that started this crisis?? Did anyone think that maybe the logo lock-up with the tag line might be dropped while they dealt with this issue? During the Super Bowl, several commercials were run with a voice over that sounded like a government assurance that things were being done to protect the consumer. The end slide--the same logo lock-up.
Note to Toyota--get your ad agencies out of this and start dealing with this as a major crisis of confidence. When a crisis hits, do not let ad agencies take the lead. Their MO is to sell, not to communicate. They don't listen, they talk. Stop trying to sell the next car and start trying to stop your current owners from fearing death from their current car. You have a lot of owners who are counting the days until their leases are up and many others who will try to unload the car, even if they loose money, just to feel safer. When humans are fearful, they return to animalistic tendencies. Reason and rationale take a back-seat to emotions. Stop trying to tell the public what wonderful cars Toyota makes and how they will be returned to their greatness and talk to Toyota owners in the fear-instilled "caves" they are now living in.
Showing posts with label communications. Show all posts
Showing posts with label communications. Show all posts
Monday, February 8, 2010
Sunday, February 7, 2010
More Commonality and Less Functionality is Needed
As a result of the Internet and social media, marketing, branding and corporate communications are converging. All all looking at a multi-stakeholder world in which relationships become king. Each of these disciplines has begun arguing that they deserve to have prominence in the management of social media.
Social media are surrounding companies and pulling knowledge that was once held inside the company to the "edge of the network". Companies can no longer push information at a stakeholder. Conversations and relationships are what predominate in the social media world. Consumers and other stakeholders have gained power of information and the ability to create and destroy value. They expect to be dealt with in a respectful dialogue, not as passive consumers of old.
So, who should own social media? Marketing argues that social media is part of the marketing mix. Brand management argues that people are talking about brands in social media and they should be the owners. Corporate communications (public relations) argues that they have always been relationship-driven and so they are best prepared to own social media.
The correct answer, I believe, is that none of them should own social media. Social media are not new channels, but rather conversations happening in cyberspace that involve the organization in one way or another. The Internet is fundamentally changing society and all organizations. The best way to deal with social media is to organize horizontally, not delegate social media to a vertical function within the organization. The reputation of the company depends on the organization's ability to manage all "touch points", and since no one function owns all the touch points, they should be managed in a coordinated, integrated fashion. However, this is not happening in most organization.
The old way of thinking is that a function within the company was given prominence or ownership over an activity. They could decide whether or not to partner with anyone else. It made for a very ineffective way of dealing with various stakeholders. Investors heard one message; customers heard another; employees still another. Things have gotten better, but improvements are still needed to keep pace with changes in the market environment.
Social media is a disorganized set of relationships and conversations. The best way to deal with social media is through the integration of marketing, branding and communications, along with employee engagement and sales management. Companies should be trying to create networks within their own organizations that mirror the networks on the outside. It's the best way to enhance the effectiveness of all of these functions and the perceived value of the company.
Social media are surrounding companies and pulling knowledge that was once held inside the company to the "edge of the network". Companies can no longer push information at a stakeholder. Conversations and relationships are what predominate in the social media world. Consumers and other stakeholders have gained power of information and the ability to create and destroy value. They expect to be dealt with in a respectful dialogue, not as passive consumers of old.
So, who should own social media? Marketing argues that social media is part of the marketing mix. Brand management argues that people are talking about brands in social media and they should be the owners. Corporate communications (public relations) argues that they have always been relationship-driven and so they are best prepared to own social media.
The correct answer, I believe, is that none of them should own social media. Social media are not new channels, but rather conversations happening in cyberspace that involve the organization in one way or another. The Internet is fundamentally changing society and all organizations. The best way to deal with social media is to organize horizontally, not delegate social media to a vertical function within the organization. The reputation of the company depends on the organization's ability to manage all "touch points", and since no one function owns all the touch points, they should be managed in a coordinated, integrated fashion. However, this is not happening in most organization.
The old way of thinking is that a function within the company was given prominence or ownership over an activity. They could decide whether or not to partner with anyone else. It made for a very ineffective way of dealing with various stakeholders. Investors heard one message; customers heard another; employees still another. Things have gotten better, but improvements are still needed to keep pace with changes in the market environment.
Social media is a disorganized set of relationships and conversations. The best way to deal with social media is through the integration of marketing, branding and communications, along with employee engagement and sales management. Companies should be trying to create networks within their own organizations that mirror the networks on the outside. It's the best way to enhance the effectiveness of all of these functions and the perceived value of the company.
Saturday, November 28, 2009
Live Your Brand; Grow Your Reputation
It seems amazing to me that so many people continue to talk about reputation as if it were something that we could build through communications alone. Reputation is primarily built through behavior, not through communications. We've heard the term "walk the talk". Companies that behave properly build their reputations more effectively than those who talk about it and do little to act appropriately.
Brand is the attributes, associations and symbols that we create that we want to be known for. Reputation is the "vote" by stakeholders that we are distinguished (differentiated in strategy terms) from our peers. How do we get from what we want to be to reputation? It is through our employees--they are the ones who connect the brand to stakeholders.
When we develop a positioning--the words that give our brand life; that explain why we should be favored over another offerings--we need to get employees engaged so that they are both willing and able to live the brand in their daily activities. One good way to do this is to develop an Employee Mantra, a simple, clear message that employees understand is their role in the positioning. It is tough to use the positioning by itself because it is focused on external stakeholders, and we ask way too much when we ask employees to understand how to translate the positioning. But, a good Mantra can do that. Like the concept of mantra in meditation, it is designed to provide focus when the "mind" wanders. So, when many people are telling employees different things, they can come back to their mantra to know what to do.
There is a famous story about someone who visited NASA and saw a janitor sweeping the floor. "What is your job"? the visitor asked. One would expect the answer to be that the person was a janitor. The answer, however was: "I keep this place clean so that we can put a man on the moon".
Consider how we could get all employees to translate their jobs to a final accomplishment that builds value for the organization. "What do I do that adds value?" is a great question for everyone in the organization. When we can find that connection and make it emotional, we have the real ability to engage employees in behaviors that will live the brand and grow reputation.
Brand is the attributes, associations and symbols that we create that we want to be known for. Reputation is the "vote" by stakeholders that we are distinguished (differentiated in strategy terms) from our peers. How do we get from what we want to be to reputation? It is through our employees--they are the ones who connect the brand to stakeholders.
When we develop a positioning--the words that give our brand life; that explain why we should be favored over another offerings--we need to get employees engaged so that they are both willing and able to live the brand in their daily activities. One good way to do this is to develop an Employee Mantra, a simple, clear message that employees understand is their role in the positioning. It is tough to use the positioning by itself because it is focused on external stakeholders, and we ask way too much when we ask employees to understand how to translate the positioning. But, a good Mantra can do that. Like the concept of mantra in meditation, it is designed to provide focus when the "mind" wanders. So, when many people are telling employees different things, they can come back to their mantra to know what to do.
There is a famous story about someone who visited NASA and saw a janitor sweeping the floor. "What is your job"? the visitor asked. One would expect the answer to be that the person was a janitor. The answer, however was: "I keep this place clean so that we can put a man on the moon".
Consider how we could get all employees to translate their jobs to a final accomplishment that builds value for the organization. "What do I do that adds value?" is a great question for everyone in the organization. When we can find that connection and make it emotional, we have the real ability to engage employees in behaviors that will live the brand and grow reputation.
Saturday, November 7, 2009
Break Down the Silos Inside Companies
Companies continued to be siloed, depite the fact that this is counterproductive. Silos may be good ways to move information within an organization, but the infighting between silos in most companies gets in the way of real competitive advantage. Marketing, PR, advertising, sales, customer relations, etc. all remain in silos. Companies cannot afford this anymore, not only in terms of the costs of maintaining the silos and their inefficiencies, but also because it is ineffective in dealing with influencing customers and other stakeholders.
Silos create their own messages, their own organization, etc. They cost the company in many ways. Companies have customers, employees, investors, etc. Those are the important stakeholders for companies. Many companies, however, spend an enormous amount of time managing all the internal squabbles and turf wars rather than focusing on building value.
Look at the traditional value chain in text books. We have inbound logistics, outbound logistics, we have support functions, marketing, sales, etc. All of these are shown in vertical bands. Each is to work on their own activities and contribute to the value of the company. It has the right concept, but has been wrongly implemented in practice.
Some business strategists have been talking about "unbundling" the value chain. This is a means to turn the vertical silos into more horiziontal activities so that organizations inside the company work together toward common objectives. Marketing does not have domain over customers; the entire organization does. Finance is not responsibile for money; the entire organization should be financially oriented. We need stewards (experts) as the guides for each of these areas, but ownership should be done away with.
What if a company were to say the following? We have a number of stakeholders who create value for our company: employees, customers, investors, and others. We want a plan of how we can enhance customer value, investor value, employee value, etc. We do not want 3-4 plans from different functions, but rather one plan that is integrated and consistent. We will incentivize those who work collaboratively and penalize those who continue to want to hold onto their "sacred islands".
If CEOs demanded such an approach, the company would likely see people reaching out and working with others they have little or no incentive to work with currently. I tried a change like this within my piece of the pie at Nortel. Instead of having a VP of Advertising, the person became the VP of Customer Relations. It changed the nature of the activities from advertising to all of the things that were needed to enhance customer relations. It can work. What's stopping companies? What do other think about this?
Silos create their own messages, their own organization, etc. They cost the company in many ways. Companies have customers, employees, investors, etc. Those are the important stakeholders for companies. Many companies, however, spend an enormous amount of time managing all the internal squabbles and turf wars rather than focusing on building value.
Look at the traditional value chain in text books. We have inbound logistics, outbound logistics, we have support functions, marketing, sales, etc. All of these are shown in vertical bands. Each is to work on their own activities and contribute to the value of the company. It has the right concept, but has been wrongly implemented in practice.
Some business strategists have been talking about "unbundling" the value chain. This is a means to turn the vertical silos into more horiziontal activities so that organizations inside the company work together toward common objectives. Marketing does not have domain over customers; the entire organization does. Finance is not responsibile for money; the entire organization should be financially oriented. We need stewards (experts) as the guides for each of these areas, but ownership should be done away with.
What if a company were to say the following? We have a number of stakeholders who create value for our company: employees, customers, investors, and others. We want a plan of how we can enhance customer value, investor value, employee value, etc. We do not want 3-4 plans from different functions, but rather one plan that is integrated and consistent. We will incentivize those who work collaboratively and penalize those who continue to want to hold onto their "sacred islands".
If CEOs demanded such an approach, the company would likely see people reaching out and working with others they have little or no incentive to work with currently. I tried a change like this within my piece of the pie at Nortel. Instead of having a VP of Advertising, the person became the VP of Customer Relations. It changed the nature of the activities from advertising to all of the things that were needed to enhance customer relations. It can work. What's stopping companies? What do other think about this?
Public Relations vs. Communications--Are We Still Debating Terms?
There are still many people who expend greats amount of enegy to attempting to argue why the term public relations should be used instead of communications. I have heard people claim that public relations is a higher-order than communications, i.e, communications is a sub-set of PR. I completely disagree.
Humans communicate, they do not public relate. The higher term is communications, that subsumes all activities such as PR, advertising, etc. It is a term that should replace promotion. Promotion, which in marketing is one of 4Ps, is a terrible term. It suggests an inside-out or push-type activity that does not have much utility in today's world. We communicate with one another.
Public relations is a totally misunderstood term and has so many wrong associations with it--press agent, events management, etc.--that I get tired of trying to define it. To spend a lot of time arguing for the proper definition of PR seems like a waste of time and energy, at least to me.
I have never been one to be concerned with definitions, because I found them constraining. I wanted to be engaged in things I considered important. If people called those PR or communications or marketing or advertising, it wasn't of great importance to me as long as I was engaged in activities I thought were meaningful to the larger enterprise. Power from my perspective is the ability to leverage influence, not run an organization called one thing or another.
I have never found marketing people getting hung up on what to call themselves. Marketing has been hurt by the misperception that it is about advertising or promotion. It is a strategic function. It also is wrongly classified by those on the PR or communications side as being focused only on selling something to a customer. That may be the case in many organizations, but that is not what marketing should be about.
The great philosopher Humpty Dumpty said: "words mean what I want them to mean, nothing more, nothing less". We all have definitions, some right, some wrong, in our heads. If we find that people we deal with have a wrong definition of a term, we can certainly spend most of our time explaining the proper use of the term, or we can adopt a different term that provides greater latitude of action and activity. I find the latter to be much more productive.
Humans communicate, they do not public relate. The higher term is communications, that subsumes all activities such as PR, advertising, etc. It is a term that should replace promotion. Promotion, which in marketing is one of 4Ps, is a terrible term. It suggests an inside-out or push-type activity that does not have much utility in today's world. We communicate with one another.
Public relations is a totally misunderstood term and has so many wrong associations with it--press agent, events management, etc.--that I get tired of trying to define it. To spend a lot of time arguing for the proper definition of PR seems like a waste of time and energy, at least to me.
I have never been one to be concerned with definitions, because I found them constraining. I wanted to be engaged in things I considered important. If people called those PR or communications or marketing or advertising, it wasn't of great importance to me as long as I was engaged in activities I thought were meaningful to the larger enterprise. Power from my perspective is the ability to leverage influence, not run an organization called one thing or another.
I have never found marketing people getting hung up on what to call themselves. Marketing has been hurt by the misperception that it is about advertising or promotion. It is a strategic function. It also is wrongly classified by those on the PR or communications side as being focused only on selling something to a customer. That may be the case in many organizations, but that is not what marketing should be about.
The great philosopher Humpty Dumpty said: "words mean what I want them to mean, nothing more, nothing less". We all have definitions, some right, some wrong, in our heads. If we find that people we deal with have a wrong definition of a term, we can certainly spend most of our time explaining the proper use of the term, or we can adopt a different term that provides greater latitude of action and activity. I find the latter to be much more productive.
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