Takata’s air bag failure: How to save brand reputations

It was found recently that over 33.8 million vehicles which were fitted with air bag systems from Takata Corp. of Japan needed to be recalled.  The CEO, Shigehisa Takada publicly apologized and faced media questions.

I find this to be an important lesson in managing a brand.  Things will and often go wrong with products you market.  That is a fact of life.  Whether Takata should have done more extensive testing to see if their airbags don’t explode under certain conditions is up for debate.  Decisions are sometimes made based on cost and benefit and things get missed.

What’s crucial is what to do when things go wrong.  The absolute worst thing a leader can do to affect a brand during crisis is to take responsibility but add caveats.  This was true with Tony Hayward at BP after the Gulf oil spill.  He took responsibility but also added that it wasn’t BP’s rig or personnel (although BP employees were there), rather just the oil was BP’s.  This launched a firestorm of criticism from the media and public and led to significant losses in brand value for BP, namely in the US.

The Japanese approach of taking full responsibility and showing humility and then “sorting out” the mess behind the scenes of which supplier or entity was truly at fault is much better for protecting a brand’s reputation.  This is very well a cultural phenomenon in my opinion since time and time again during crisis CEOs of North American companies tend to deflect blame as much as possible when things go bad.

People don’t expect brands to be flawless, so it is okay to admit mistakes and failures, but people do expect honesty and humility.

Article: http://www.theglobeandmail.com/report-on-business/international-business/asian-pacific-business/takata-ceo-meets-media-apologizes-for-defect/article25106520/

Posted by: Yusuf Hasan

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