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Pulte-Centex and Toyota Reputations Compared
Tuesday, 23 February 2010

Toyota, Pulte learning crisis management
Toyota's issues with unintended acceleration, floor mats, brakes and recalls and Pulte/Centex Homes' association with a frightening retaining wall failure have absorbed big chunks of San Antonio news media attention in recent weeks. Both situations offer useful lessons about crisis management to other organizations.

Toyota, Pulte learning crisis management
 Post Your Comment and Read More! More More More
Toyota's issues with unintended acceleration, floor mats, brakes and recalls and Pulte/Centex Homes' association with a frightening retaining wall failure have absorbed big chunks of San Antonio news media attention in recent weeks. Both situations offer useful lessons about crisis management to other organizations.

Lesson 1: Prevention is the best crisis management strategy. While some crises are unavoidable (natural disasters, for example), others are absolutely avoidable. Could the collapse of the retaining wall in The Hills of Rivermist have been avoided? Probably so. After all, the terraced topography of the neighborhood is man-made. Involved parties — government officials, engineers, Pulte/Centex and others – may point the finger at each other, but Pulte and its Centex brand are the ones taking the worst beating.

This might not have happened had they been more focused on the potential for massive bad publicity (not to mention financial costs) in the event of a major slope failure, regardless of where the responsibility should lie.

Lesson 2: Empathy matters. When an accident and fire rocked Ultramar Diamond Shamrock's refinery in Three Rivers in 2001, much of the town had to be evacuated due to potential toxic fumes blowing into the town. During and after the evacuation and cleanup, UDS repeatedly expressed its regret for the disruption of lives.

Ultramar was prompt and consistent in making sure the residents and leaders of Three Rivers knew the company was taking full responsibility and was doing everything possible to make it right. Result: The longstanding positive relationship between the town and the company remained intact. Empathy, combined with swift action, is always a winner.

By contrast, Toyota has been loudly criticized for months for not offering a sincere and empathetic apology for what are perceived as serious safety failings that imperil Toyota drivers and passengers. To its credit, Toyota is now pledging — through press events, TV spots and op-ed articles — to do whatever it takes to regain the public's trust.

Had such mea culpas been voiced by the company much sooner, the reputation of the Toyota brand as well as the value of its stock might not be in such a vertical free fall. But it does seem now that Toyota at last “gets it” and is taking truly extraordinary steps to right the ship. The empathy is late, but it should still be helpful.

Lesson 3: Images are powerful. Who in San Antonio hasn't seen aerial photos or video of The Hills of Rivermist's massive crevasses, crumbling retaining wall or homes seemingly on the verge of sliding down a hillside? Those scary images have more impact than any press release or speaking point, and they will live on the Internet for years.

Same for Toyota. Photos of a mangled Lexus (Toyota's upscale brand) in which four people died after one made a frantic call to 911 are chilling and readily accessible on the Web. No matter how well or how quickly Toyota recovers from its crisis, those images are not going to disappear. The take-away for all organizations is to assess the images you already or potentially could provide to the outside world. Images have great power to influence perceptions positively or negatively.

Those of us with extensive crisis management and communications experience could write much more about the lessons to be learned from the Pulte and Toyota situations. Pay attention to how each scenario unfolds day by day and you're bound to pick up a few ideas of your own to better prepare your organization for a crisis.

Final thought: If your organization doesn't have a crisis communications plan, start one right away. Your company's reputation might depend on it.

Eric Whittington is Vice President of Pierpont Communications in San Antonio.

 Post Your Comment and Read More! 

janetahmad11:13 PM
Jennifer: Understand the City had not yet pulled out of the community. Centex was deliberately misleading the residents. That is why the video is newsworthy. Obviously you were not there when Centex spokespersons repeatedly misrepresented the facts. The fact is as victims and the news media dig deeper, the extent of Pulte-Centex Homes and the unregulated building industry careless construction defects will be revealed. These public revelations are a scandal a long time in the making for the City of San Antonio.

Jennifer8:27 AM

John - it was actually the City of San Antonio that declared the homes safe to return to - not Pulte. Although I agree in part with Eric's premise that crisis communication should be a bigger focus, I feel the need to point out that so many lies and half-truths have been told by the media regarding the Pulte situation. The City came out the next day pointing fingers when nothing was yet known about the situation. Unaffiliated engineers made judgments about work they knew nothing about. This whole situation has been a debacle, and through it all Pulte has quietly been trying to get to the bottom of the issues at hand. The truth will be revealed once all the analysis is done, but unfortunately, this company has already lost in the court of public opinion. The media - broadcast in particular - should be ashamed at the way they've covered this story. It's embarrassing to see them parade people on camera without even fact checking their stories. And, no, I don't work for Pulte. I am a consumer who digs deeper and isn't satisfied with what our local media crams down our throats.

6:19 AM
Pulte is now learning that you don't make statements that you can't substantiate. They told the homeowners that the danger had passed and the Fire Department had left as a result. Now we know better. They need to take a hard look at the site that they created, and come to the conclusion that the builder and engineers failed to provide the homesite that they sold to the customer, and that the only reasonable conclusion is to buy those homes back.
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