I can’t claim to know much about cars: the purr of an engine that sends some weak in the knees is not a sound that I can appreciate with any real conviction. What I do know, though , is that like many other consumers, the recent recall of 8.2 million Toyota vehicles and the way the company dealt with the crisis since, doesn’t fill me with the utmost confidence. Like others I’m left thinking…if I was buying a car, would I consider a Toyota? But to stop here is to underestimate the real depth of the issue.
Trust has no doubt been damaged, but what is more pertinent, is how this event shapes the way that we perceive the businesses and brands around us at any given moment. Lots of commentators have spoken about reputation and crisis management with regards to Toyota. However, few have commented on the judgements that we make about the companies that are in our lives everyday and why we make them. This time last year, when Toyota’s hybrid technology was being heralded as innovative and leading edge, would any of us have questioned Toyota’s safety and mechanical systems? Truth be told, probably not. We would have considered them to be leaders in driving the sustainability agenda forward.
The thing is, sustainability should be about so much more than carbon emissions and building truly sustainable businesses should be at heart of every CEO’s corporate plan. Sustainability has for too long simply centred on philanthropy and environmental activity. However, the real differentiators for a company lie in how it operates its business and how it is subsequently perceived by all its stakeholders. What does this all mean in real terms?
It means that in order to be sustainable, companies should really get to grips with and understand the impacts that they have. From the way that they govern themselves and manage their people; through their supply chains and the provenance of their resources and ingredients; to the way they make, manage and distribute the goods and services that they provide. It’s about everything that a business does. When push comes to shove, consumers are more likely to be interested in the safety credentials of a vehicle, for example, than the philanthropic giving of a corporate foundation. That’s not wrong, that’s life, and rightly so.
This is why companies like Volvo have made public commitments to safety through its Vision 2020 where it claims that, “By 2020, nobody shall be seriously injured or killed in a new Volvo”. Whether this can be achieved or not remains to be seen. What it does do is clearly state how business basics – the products that it manufactures and how they are perceived by their consumers – are at the centre of its operations, making it truly sustainable.
It’s clearly a fickle world in which we live and Toyota’s experience shows how quickly and deeply a reputation can be damaged – despite years of commitment as a great employer, an innovative manufacturer and an environmental leader in the automotive sector. For Toyota – and for CSR practitioners in general – the message is clear. Your socio-environmental credentials will only go so far in mitigating risk and potential reputational damage. In order to be truly sustainable across the whole piece your business basics need to be just as sound. For Toyota, this is the challenge it needs to address before it can regain the reputation that it rightfully deserves.
Deepa Mirchandani specialises in corporate community investment and research. She has led work with clients including Deloitte & Touche, BP and the Nationwide Foundation where projects have ranged from evaluating Charity of the Year schemes and carrying out community consultation, research and evaluation. Deepa has extensive experience in the not-for-profit sector and has held campaigns and policy positions at Amnesty International UK and Save the Children Fund. Deepa graduated with a Politics & Spanish degree from Sussex University and also holds an MSc in Latin American Politics.
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