A Message for Mr. Obama: How About We Try Another Approach . . . Simplification

1. The biggest difference between the private sector and the public sector is that government has no sense of the dollar value of time. There is no sense that all the proposed programs—that sound so good inside the beltway and on NBC’s Meet the Press—really make anyone who employs anybody cringe every time.
2. This seems so simple it may be silly to suggest it, but radically simplify how businesses operate in America, especially smaller business. It could be the greatest single energizer of individual business imaginable. Isn’t that historically where the most new jobs come from in numbers that mean anything—one or two jobs here, and one or two jobs there from millions of small businesses? Probably won’t be hiring any brokers or bankers, but maybe insurance agents, real estate agents, store managers, and people with technical and community college training. Does it matter? We need citizens who need stuff and have the confidence to go out and spend.
3. We have a very small business. Yet, I have three consultants for every employee: two for taxes (our corporate taxes weigh two pounds and are more than an inch thick), two for our pension plan, one for filing, and one for investment advice. The rules are rightly onerous. It’s a big responsibility but could be simpler. We have an accountant with some regulatory oversight (to make sure we file the nearly three dozen reports required by various jurisdictions every year). We file sales tax returns in several states, this could be consolidated.
4. Proposing tax credits for new employees won’t come close to meeting the obligations of hiring new people, plus such a business decision creates the added complexity of filing more government reports. If the person I hire is a deadbeat dad (I can’t ask.), the county will, under criminal penalty, require that I compute the amounts owed spouses, withhold these moneys (another report), and submit to the county authorities accompanied by the proper forms for dispersement to the spouse.
5. If the person I hire turns out to have a phony ID and can’t pass the immigration screening I’m required to do as an employer, there are criminal penalties for that. And more forms to be filed if the hire is successful.
6. Small business or big business, we all seem to be treated the same. And no government official seems to be able to forecast the consequences of their actions. We feed the growing daily needs of ever more averous bureaucracies. The states and the counties, in turn, layer on their own additional requirements. Every form required by the federal government probably triggers two or three downstream forms from other government entities.
7. Simplify, Simplify, Simplify. These steps would put immediate resources back to work in company coffers and perhaps even reduce the cost of government.

We need the business giants to place orders with their suppliers early and often. Get out there and sell something.

Toyota on the Right Track?

The latest Toyota ad, “Our Pledge to You,” is out and does show signs that the company is making progress in understanding what it has to do to be forgiven. But, the approach is still too austere and fails to go far enough to make the customer-focused commitment that’s needed.

If Toyota truly wants to achieve the forgiveness it must have to recover (and also foil the critics, confound the media, convert the public policy makers, and disable the bloviators, bellyachers, and back bench bitchers), its strategy needs to include two powerful ingredients:

1. Stop talking about Toyota and what the company is doing, and begin talking from the customers’ point-of-view, entirely. The former approach sounds like (and is a form of) self-forgiveness and problem minimizing. The approach must emphasize what customers can expect, what customers need to do, what the next steps are, and how customer interaction (as small as it might be) is providing meaningful assistance to the company as it resolves the issues it’s facing.

2. Toyota needs to follow the time tested algorithm for obtaining customer, employee, shareholder, and public forgiveness:

Step #1 Candor: Outward recognition, through promptly and continuously verbalized and written public acknowledgement, that a problem exists; that people or groups of people, the environment, or the public trust are affected; and what specifically is (will) be done to remediate the situation.

Step #2 Apology: Verbalized or written statements of personal regret, remorse, and sorrow, acknowledging personal responsibility for having injured, insulted, failed or wronged another, humbly asking for forgiveness in exchange for more appropriate future behavior and to make amends in return.

Step #3 Explanation (no matter how silly, stupid, or embarrassing the problem-causing errors are): Promptly, briefly, and extensively explain why the problem occurred and the known underlying reasons or behaviors that led to the situation (even if there is only partial information). Keep updating the findings.

Step #4 Affirmation: Talk about what you’ve learned from the situation and how it will influence your future present and future behavior. Unconditionally commit to regularly report additional information until it is all out or until public interest has ended.

Step #5 Declaration: An ongoing public commitment and discussion of specific, positive steps to be taken to conclusively address the issues and resolve the situation.

Step #6 Contrition: The continuing verbalization of regret, empathy, sympathy, even embarrassment. Take appropriate responsibility for having allowed the situation to occur in the first place, whether by omission, commission, accident, or negligence.

Step #7 Consultation: Promptly seek help and counsel from “victims,” government, the community of origin, independent observers, and even from your opponents. Involve directly and request the participation of those most affected to help develop more permanent solutions, more acceptable behaviors, and to design principles and approaches that will preclude similar problems from re-occurring. Seek, insist, and propose more oversight, restrictions, regulations, rules, and legislation.

Step #8 Commitment: Publicly set your goals at zero. Zero errors, zero defects, zero dumb decisions, and zero problems. Publicly promise that, to the best of your ability, situations like this will be prevented in the future. Disclose through Web site announcements and dashboards the diversity and intensity of the efforts.

Step #9 Restitution: Find a way to quickly pay the price. Make or require restitution. Go beyond community and victim expectations, and what would be required under normal circumstances to remediate the problem. Do more, talk productively.

The people from Toyota may indeed say they’re doing all of this, but if you read this algorithm structure carefully, they’re doing very little and skipping the really hard parts (the disclosure and the customer voice). The one thing we know for sure about situations like Toyota’s, the company will do every algorithm element – the way it’s presented here – for this nightmare to begin to end and go away. If the company starts sincerely and consciously doing all of these steps immediately, the tides will turn sooner rather than later. The behavior in the algorithm helps employees and those who rely on Toyota to have many more reasons to rally around the company.

Newspaper ads can be a fine gesture, though they often give the impression that more is being done then is actually accomplished because they’re so general and nonspecific. If you want to talk about accomplishments, do dashboards, including your data on customer attitudes and confidence. Talk is cheap. It is performance and action that matter most.

The Toyota Brand Sinking? C’mon

Of the relatively few dumb statements published about Toyota’s current recall troubles—one by Maryann Keller quoted in a Bloomberg story, “People aren’t going to buy Toyotas . . . their image is finished . . . ”—is premature, but silly enough to get a reporter to bite. And here’s another statement, by Brenda Wrigley (chair of the Department of Public Relations at Syracuse University’s School of Public Communications) and quoted by the Associated Press on January 27, 2010, “The story just kind of drags on. That’s just deadly for a reputation. It just spirals into a big situation that’s probably going to have long-term financial impact for the company. Quality was their differentiator and now it’s their Achilles heel.” How about some history?

Jerry Delefamina, a brilliant, Long Island advertising maven of the ’80s and ’90s, told ABC News (and many other news outlets in 1982) that Tylenol would disappear as a brand within a year after the mysterious 1982 Chicago-area cyanide poisonings where seven died, there were copycat cases, which caused a massive recall of the product. The capsules were off the market for six weeks.

In 1986, there was second Tylenol tampering cyanide poisoning, this time in Westchester County, New York that caused one death, another massive recall, and the end of Tylenol capsules over the counter for 25 years.

McNeil Laboratories (the division of Johnson and Johnson that makes Tylenol) and J&J’s handling of the two incidents set the global standard for ethical, open, and disclosive crisis response and public communication for industries, government, and commercial organizations around the world.

Toyota’s response is clearly meeting this global standard. The Toyota brand, like Tylenol, is likely to be stronger as a result of such excellent, open, and responsive corporate behavior.

Negative speculation, which the media loves more than the truth, by so called experts, only serves to underestimate the intelligence, competence, and loyalty of satisfied customers.