I wish I had a nickel for every time – when I’ve been talking to a company about how well prepared they are if a crisis were to hit today – they look at me as if I’m being unreasonable and say, “We don’t need to talk about that! We have a great reputation.” If I were to have this conversation tomorrow, I would just say, “Think for a minute about the three T’s – Tiger, Tylenol, and Toyota.”

Up until a few months ago, you would have been hard pressed to come up with three different brand names (and make no mistake, Tiger was a brand – for professional golf as well as the products he endorsed) whose reputations were any higher than these three. Tiger was named the Athlete of the Year by Sports Illustrated and amassed the greatest fortune of any athlete to date. Johnson & Johnson had been consistently rated in polls of Americans as one of the most highly regarded companies in the country, mainly due to the outstanding way they had handled the crisis when their capsules were laced with cyanide in the Chicago area, causing the death of seven people back in 1982. Among the automobile buying public in the U.S. and around the world, Toyota’s reputation for quality and reliability led them to be number one or number two in car sales year after year, making them very profitable while their competitors struggled mightily.

We discussed Tiger’s troubles last month, so I’ll let the man off the hook here while he continues to keep his very low profile. (Watch out when he does reappear, however, as the media frenzy will be resumed in full force, examining every aspect of his personal and professional life.) This month we’ll examine the other two T’s to see what we can learn from their experiences.

TYLENOL’S TROUBLES

If you are the parent or grandparent of a small child, you may have been aware of the September 2009 recall of certain Tylenol Children’s and Infant’s over-the-counter medicines. Their press release said it was because “one inactive ingredient did not meet all quality standards.” If you dug deeper, you would have found some websites that explained this meant that one of the ingredients was suspected of being contaminated with B. cepacia bacteria which certainly could have been detrimental to children. This incident might well have passed with no lasting damage to J&J’s corporate reputation or that of McNeil PPC Inc (former McNeil Labs), their consumer health division that manufactured Tylenol products.

But then in November of 2009, McNeil PPC Inc. recalled five lots of Tylenol Arthritis Pain Caplets because of a nauseating, moldy odor that sickened a bunch of people. There were a number of news articles and TV coverage on this. People began to notice. Then came the bombshell. On January 15, 2010 the number of Tylenol products recalled for the same problem swelled to 60 million! J&J’s press release called the illnesses caused by their products (nausea, vomiting and diarrhea) “temporary and non-serious.” If you or a loved one of yours was afflicted, you might have had a negative reaction to this rather dismissive description.

J&J indicated that they had traced the problem to the breakdown of one of the chemicals used to treat the wooden pallets on which the packaging materials were stored and transported. No explanation was given of WHY this chemical broke down. Again, consumers could turn to consumer advocate websites. There they found that a certain fungus caused this breakdown. And those who read about this fungus would find it could cause some quite serious ailments of the cornea of the eye! While I have not to date read any media accounts that allege corneal damage has been caused, the whole matter raises quality/purity questions in the mind of the consumer.

People have a choice when they go to the pharmacy to purchase an over-the-counter medication to combat arthritis pain. With the recent negative publicity surrounding Tylenol, I wouldn’t be surprised if their sales show a distinct dip this quarter.

TOYOTA’S NIGHTMARE

Speaking of sales dips! Sales of Toyotas have plunged in December and January. Frustrated owners of various models have vented their spleens against the company on the web, with one particularly irate customer naming himself “Deathtrap Owner.” When I went online to do some research, I found that there were almost 21 million Google hits to “Toyota Recall.”

Last fall you may remember hearing of accelerators that were sticking and causing uncontrolled speed-ups. Initially these were linked by the company to the floor mats. Although some owners expressed skepticism that this had been the cause of their problems, they didn’t kick up too much of a fuss. Toyota offered to shave down the gas pedal’s size and some people simply removed their floor mats or obtained different ones.

But complaints about sticking accelerators persisted. On January 21st, two million cars were recalled to fix what Toyota described as a problem that occurred in “rare” instances. Then, on January 26th, Toyota announced they were halting sales of the affected models and also halting production of these models – an unprecedented step. When the figures are compiled worldwide, there are now some nine million recalled automobiles.

The recall process itself is being badly managed. Owners who saw their models on the recall list were told to call their dealers. The dealers don’t know what to tell their customers. They do not have new parts to replace what has been determined to be a gas pedal assembly that might malfunction, so they tell people not to bring in their cars. Customers are told to wait until they receive a letter from Toyota. You can imagine that they are not feeling very good about driving a car around that might be subject to racing out of control!

To make matters worse, the January 28th press release from Toyota stated, “Toyota has taken the unprecedented step of stopping production to help serve our customers quickly. (We are) working closely with the pedal supplier on a revised design that effectively remedies the problem. Those pedals are now in full production to support Toyota’s needs. At the same time we continue to work with the supplier to test effective pedal modifications for existing vehicles on the road that will be available to our customers as quickly as possible.”

Do you see the problem here? From their own words you pick up that their first priority was to work on gas pedal assemblies for their new cars to “meet Toyota’s needs,” leaving current owners to stew and fret longer. Those who had been loyal Toyota customers are not going to react well to this treatment. On one blog, a man who had owned a series of Toyotas said, “I am SO DONE with Toyota.”

Toyota’s major talking points – as they’ve been visible under all of the wailing of their angry customers – have been that (1) problems have occurred only in “rare” instances and (2) if a problem with a sticky accelerator does surface, it does not happen suddenly, but provides plenty of warning so that the owner can stop driving the car. Had they gotten these two messages out quickly, before the avalanche of negativity grew so dramatically, they might have been able to control the crisis better. Now they are being reactive. It was only within the past few days that the CEO of Toyota appeared in public, and then only a brief appearance in Sweden. The NBC TV News commentator whose clip I watched on the Internet said he “appeared to not know what to do – after all Toyota doesn’t have much experience in these things.”

BACK TO MY MAJOR POINT

Just because your company has been lucky so far, because your corporate reputation has been a good one to date, and because you have run a tight ship in the past, it does not mean that you shouldn’t be prepared for that day when you find yourself at the beginning of a crisis. When things start to go wrong, they go wrong FAST. There is often no time to call in a crisis communications consultant to put your management team through some training to help manage the situation. Prepare now so you can do and say the right things early on and reduce the life cycle of the crisis and the impact on your organization.

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