On shaking hands and creative leadership in the John Terry Wayne Bridge saga

February 27, 2010

A sad sporting leadership story shows how creativity can be a leader’s secret weapon

Every tale of leadership offers opportunities for learning. “How would I deal with that decision?” is a good question. In the over-publicised case of John Terry and Wayne Bridge, there is also the question “What would I have done to avoid getting into mess in the first place?” For anyone not interested in football, you need to be aware that John Terry was recently stripped of the Captaincy of the England football team. He had been involved in an extra-marital affair with the former partner of former team-mate Wayne Bridge. Public interest is fueled this week by the news that Bridges has decided not to take part in the up-coming world cup later this year.

Leaders we deserve has advocated the merits of creative leadership. How might this play out in practice? Take the critical incident being anticipated today [February 27th, 2009]. Chelsea and Manchester City are due to play a football match. John Terry will be expected to lead out Chelsea (he retains the captaincy of that team). He will be expected to shake hands with members of the opposing team. So there we have a dilemma of leadership. What to do if the handshake is spurned? Oh, yes it’s only a handshake. But for ‘only a hand-shake’ why is the story taking on huge signficance, at least for journalists? That’s another story, and one about symbolism and leadership.

How might creative leadership come into this?

We can start with the assumption that dilemmas often result in either/or thinking. Break the ‘either-or’ and you have a chance of escpaing the dilemma. I’ve also written about this as knight’s move thinking. Edward de Bono would probably say it’s where Lateral Thinking is needed.

The locked-in thinking presents the story as simply one man shaking hands with another. Suppose we pose it as “how to arrange the pre-match handshakes between Chelsea and Manchester City differently (in view of the unusual circumstances surrounding the event)”. I can think of several things that might happen. My thinking has switched from ‘what Wayne Bridge must do’ to ‘what might Chelsea and Manchester City captains, players, and maybe supporters decide to do’. And, that is a matter of co-creativity, and distributed leadership.

Whatever happens this afternoon at Stanford Bridge will be an opportunity for considering ‘what might have been’.

Postscipt

At the start of the match, John Terry offered his hand to Wayne Bridge. Bridge rejects the proferred hand. Chelsea fans boo Bridge enthusiastically throughout the game. But another story was to supplant the hand-shake one. Chelsea lost at home 4-2. Two of their players were sent off by the referee. And I didn’t notice a lot of creative leadership. The ‘fake shake’ gave the tabloids a few headlines the following day.


Systems Thinking for Curious Managers: Book Review

February 27, 2010

Systems Thinking for Curious Managers with 40 new f-laws, Russell Ackoff with Andrew Carey, Triarchy Press. List price £15, ISBN 9780956263155, publication date, March 2010.

This brief book serves as a memorial to the great systems thinker Russell Ackoff (1919-2009). In style and content it is a marvellously concise insight into Ackoff’s principles of how business systems work.

I only briefly met Russell Ackoff, but for many years his work kept cropping up as I struggled to understand the nature of creativity. Writing in the 1980s, I noted in Stimulating Innovation: A Systems Approach that

“by taking a systems view it is easier for those involved in innovation to avoid getting blocked into a technological ‘mind-set’ or belief system ..or any other partial or biased perspective”.

By that time, I had become introduced to the work of Russell Ackoff by that another polymath, Stafford Beer. Much later, I learned that Beer and Ackoff had been plotting to replace traditional Business School structures at Wharton and Manchester with healthier ones following their emerging ideas of how a viable systems operates. You will find evidence for this in the wonderful Archives of Stafford Beer’s work held at Liverpool University, and on-line.

The Quality of Insight

Systems Thinking for Curious Managers provides a glimpse into Ackoff’s impish and creative genius. In keeping with a systems approach, it manages to avoid the traditional linearity of narrative. Its contents at one level are Ackoff’s epigrammatic business principles or f-laws, each numbered permitting the systems device of cross-referencing and integration. I kept thinking of Wittgenstein’s philosophical investigations, a far more ambitious project to capture the universals of his philosophy. Pity Ludwig made no concessions to supplying those explanatory information feedback loops. However favourably Wittgenstein will be judged by history, it will not be for the clarity of his insights. In contrast Ackoff repeatedly finds ways of enabling his readers to find insights, either as experienced systems thinkers, or as Andrew Carey puts it in his introductory chapter here

Most of his f-laws share the qualities of all good insights – they make you say “of course, why didn’t I see that before, it’s obvious!”.

This is an observation that has been made by various people regarding the essence of leadership.

I don’t have to sell this book. It sells itself. You can make up your mind by checking out the web-site. You’ll find at least one of the f-laws worth sharing with others, and maybe the subversive appeal of systems thinking will have helped produce another convert.

Footnote:

OK, here’s an f-law. Were you hoping I would give an example? I decided to select it at random, using the date when I completed this review, which led me to F-law number 27:

27: There’s nothing that a manager wants done that educated subordinates cannot undo.

And if you can see why picking one of the 123 f-laws at random is a rather good way of making a point, you are probably a practicing or potential systems thinker.


Nigel Farage attacks Europe’s ‘damp rag’ leadership

February 25, 2010

A right-wing Member of the European Parliament launches a highly-changed attack on the newly appointed President. What was the intention behind the speech? What might be its consequences?

The BBC reported the speech [Feb 26th 2010] as follows:

A British Eurosceptic MEP has unleashed a volley of insults against the President of the European Council. Nigel Farage, who leads UK Independence Party (UKIP) MEPS in the European parliament, said Herman van Rompuy had “the charisma of a damp rag”. He compared the former Belgian prime minister to a “low-grade bank clerk” and said he came from a “non-country”. The attack, which stunned the chamber, came as Mr Von Rompuy made his maiden appearance in parliament in Brussels. “I don’t want to be rude,” Mr Farage began, before launching into a personal attack lasting several minutes. “Who are you? I’d never heard of you, nobody in Europe had ever heard of you,” Mr Farage thundered, as noisy disapproval at his intervention in the chamber rose.

In the absence of further information, the BBC’s description appears to be of a politician who lost control of his emotions. Or maybe, this was a calculated political gesture. If so, we have to ask what particular political game was being played by Mr Farage.

It is hard to see how the speech might influence anyone among the assembled representatives. It starts making sense when Mr Farage’s declared intentions are taken into account. He is there as a declared opponent to the Parliament. Mr Farage argues that the entire European set-up is designed to stifle the independence of member states. The majority of the assembly would take the view that for all its bungling bureaucracy, the EU is attempting to promote a European-wide democratic system through economic and political means. To which Mr Farage argued

“I have no doubt that your intention is to be the quiet assassin of European democracy and of European nation states,” Mr Farage’s party, UKIP, campaigns for the withdrawal of Britain from the European Union. It has 13 representatives in the European parliament. “You seem to have a loathing for the very concept of the existence of nation states,” Mr Farage continued, adding: “Perhaps that’s because you come from Belgium, which is pretty much a non-country.”

What’s Mr Farage up to?

Maybe he hopes to capture more followers through a charismatic leadership style in which he places great store. It is too easy to point to various right-wing dictatorial leaders who favoured such a style. After all, some of the great left-wing demagogues also favoured the style.

It is likely that his intention is focused outside the hall to electorates, and to opinion-brokers of electorates, particularly in the UK.

Does it matter?

Does his speech matter? Or, put another way, will Mr Farage achieve his leadership goals? UKPs natural constituency in the United Kingdom is made up of disaffected Conservatives. The party seems to be attracting more voters than its closest competitor, the BNP as its anti-Europeanism nationalism is presented with less wriggling about its stance on racial equality. But in the run-in to the upcoming national elections, the electoral distaste for the major parties may be, like the economy, showing as bumping along in a trough, but not obviously dipping ever deeper.
Perhaps a more serious challenge for the newly-elected Parliament will be less about Mr Farage, less about high-profile leadership, and more about consensus. There is increasing talk of a hung parliament after a May general election.


Toyota, Duty and Destiny

February 21, 2010

The successive bad-news stories at the start of 2010 for Toyota illustrate the effect of cultural factors on leadership and organizational behaviours. An understanding of dynastic history will help assess future prospects for the company

In considering the prospects for Toyota, I found myself reflecting on the nature of dynastic rule. Japan itself is still an example of a dynasty-based culture. The Japanese Dynasty is believed to be the oldest continuing hereditary monarchy in the world, with a bloodline stretching back nearly three millennia (660 BC – present day). The Emperor (天皇) symbolises a unity of the state with the Japanese people, and is head of the Japanese Imperial Family, and also the highest authority of its Shinto religion.

It has more recently become accepted to use the term dynasty to refer to family-owned businesses, where we also find transmission of authority and control handed down from generation to generation. Metaphors can be useful for imaginative purposes, but can also be misleading. Nevertheless, it is perhaps worth reflecting on dynastic leadership, and its implications for Toyota.

The Dynastic Principle

Western thought about dynastic power has been greatly influenced by the German social theorist Max Weber. One of his many significant contributions was his work on the nature of ancient and modern social structures. He proposed that traditional societies maintained stability by the society’s acceptance of the legitimacy of their ruler, and the power this permitted in the interests of the State.

Weber went on to suggest that overthrow of a society’s structure and traditions came about through charismatic opposition to them. For Weber, newer religious forms (aligned to state power) often were accompanied by charismatic leaders. He further argued that new form of control suited to modern industrial societies functioned through the power backed up by the legal authority expressed through rules and regulations. His terminology of bureaucratic control is still in common use. That’s how business students used to be taught about Weber’s theories.

Dynasties ancient and modern

The connections between the foundation of sociological thought, and today’s structuring of global organizations, are also being studied by researchers into institutional forms. A promising new area of work is into varieties of capitalism (VoC). The potential significance of this research can hardly be over-emphasized. It offers insights regarding the competitiveness of industrial firms globally, as much as insights into the diverse attempts to ‘civilize capitalism’ (as one researcher puts it).

Toyota, Ford, and other modern dynasties

Toyota may be seen as a modern institutional form, retaining dynastic power internally. The company was founded by Kiichiro Toyoda in 1937 as a spinoff from his father’s company Toyota Industries, and today’s President is Akio Toyoda.

It would be a great over-simplification to assume that such a family-based structure inhibits change and adjustment. Nevertheless, its response to its recent manufacturing and strategy problems appears consistent with a tendency to avoid radical actions which appear as threats to core cultural values.

Generalisations can be dangerous. In America, the history of the mighty Ford motor empire also shows the dynastic principle at work. From the days of Henry Ford until recently, power resided with the founding family, with current Executive chairman William C Ford the fifth generation (by my counting) of the family on board. Interestingly, Ford also came near to ruin with a safety crisis associated with the Ford Pinto in the 1970s. Ford survived that crisis, but has arguably been relatively slow to deal with competitive pressures. In the UK, its acquisition of the much-loved (but eventually cash-strapped) Jaguar mark was reversed by its sale to Tata, another globalising dynasty.

Born or Made Leaders?

Associated with dynastic structure of institutions or cultures, is the question raised of the fitness to lead. Are descendents of a founding entrepreneur especially equipped to lead into the future ? The evidence is less than clear-cut. At very least, the all-powerful leader acting ‘to the manner born’ is vulnerable to events that threaten the continuity of any organisation. Hereditary rulers of States and leaders of organizations exercise power mediated through advisors. At times the advisors contribute to forces which bring about the demise of the figurehead, in the wider interests of the Institution.

Toyota into the future

Jim Taggart, who writes on leadership issues, points to the manufacturing issues facing Toyota. He also cites a press story criticising Toyota’s risk-management approach . To understand Toyota’s present crisis, wider factors also need to be taken into account. Toyota-bashing in the US, as pointed out, is taking place with regard for socio-economic and political vested interests. Students of leadership will find much to consider in this, and in the ‘born or made’ dilemma of leadership.


The BBC still doesn’t understand social media

February 12, 2010

An investigation carried out by the BBC shows that despite the multi-million investments on web-based business, the corporation still doesn’t get it

A BBC investigative reporter cut himself off from mainstream media this week. He was attempting to investigate claims of the power of the internet as an alternative to traditional news media. From the start, the exercise was grounded in a poorly-formulated assumption. After a week, it only confirmed that the BBC culture is hopelessly mired in its increasingly obsolete mindsets.

To test the power of the internet, the journalist imposed a ban on all contact with news from traditional media – including his own organization, to see whether access to the internet would be a substitute or even be something better. The motivation was stated to be a remark by a tweeter that she doesn’t need to find news, because important news will find her.

That’s a promising start, and offers a testable hypothesis. But the conditions introduced by the investigator could hardly be more flawed. He decided that he would use only his active surfing to substitute for his normal informational diet. While he would get to twitter, for example, he would not follow-up any links on the tweets he found, on the grounds that such actions would lead him back to stuff originally generated by traditional news media such as the BBC.

Now what sort of experiment is that? One which tries to avoid any reflection of how the internet media works. It’s naïve or disingenuous to treat it as a substitute for a person’s normal flows of information. A far more meaningful investigation would consider how long it might take to have gone beyond the start-up stage and get to a reasonably stable set of links. How those links add value. Whether added value was found. Where it comes from, and so on.

At the end of a week of self-imposed apartheid system of information management, the journalist concluded that the social media offer a poor substitute for the news generated by institutions with proper journalists like himself.

A contrary view is one shared by the experiences of personal acquaintances who, having become involved in the process of news gathering on some professional or technical issue, are disillusioned about the outcome as their comments are reinterpreted into a news story. Now that’s a story worth investigating. But don’t bother to wait for the BBC to do it justice.


Waterboarding and Leadership

February 9, 2010

The labelling of a recent case of parental abuse as waterboarding offers insights into processes of narrative-building

A recent case of parental abuse has been labelled as a waterboarding incident. The narrative developed after abnormal behaviour of a US soldier observed in public was followed-up by the local police. They discovered an incident at his home where the parent was reported to have disciplined his four year old daughter by holding her head under water.

It seems to me a clear example of how a story builds up and is captured as a narrative label. The move vivid the label, the more likely it becomes the way that the story is tagged in the mind of readers, and electronically in web-based versions which speed their way around the internet.

The reports are typified by one from the BBC

A US soldier has been charged with assault after allegedly waterboarding his four-year-old daughter, police in the state of Washington have said.

Reading further, I learned that the Police, had cited Sgt Joshua Tabor, a helicopter repairer who served in Iraq from 2007-08, had

…dunked the girl’s head in a sink full of water for not reciting the alphabet. Yelm police chief Todd Stancil said Sgt Tabor was arrested on 31 January. “From what I understand it is very similar to waterboarding,” Mr Stancil said of the alleged offence, according to the AFP news agency.

From what I understand of waterboarding, the analogy is rather stretched.

Water-boarding involves a prisoner being stretched on his back or hung upside down, having a cloth pushed into his mouth and/or plastic film placed over his face and having water poured onto his face. He gags almost immediately.

The Telegraph headline shouted US soldier gives four-year-old daughter ‘waterboarding’ over alphabet. The tell-tale inverted commas around the term waterboarding hints at an awareness that the story is not entirely free from metaphor.

I am not belittling the abuse that a child appears to have had inflicted on her. There may be a connection between Joshua Tabor’s actions, and experiences he had serving in Iraq, where the stories of waterboarding emerged. But there is also in this sad case some implications for leadership studies. Is it easier for waterboarding to become culturally acceptable under extreme conditions of military threat if there is a connection with more widely-expressed and primitive behaviours of bullying and abuse? Are leaders able to exploit these conditions, as in the well-known Milgram experiments?

Leaders we deserve?

I was struck recently by the popularity of the view expressed recently that Tony Blair and George Bush were criminals who should be arrested for their war crimes, including incidents of water-boarding over whose perpetrators they had ultimate responsibility. The argument has enough elasticity to blame the political leaders for the panic and abuse of one little girl in a town in Washington DC, years after the war ended.

When we put leaders on trial who are accused of responsibility for acts of mass murder and torture, are we also holding to them to account for monstrous acts, and for forcing others to comply with their wishes? Did they struggle with one of the ultimate dilemmas of leadership involving the rights of one set of individuals against the safety of another set? Are we also demonstrating the complicated collusion which plays out between the leaders we elect and the leaders we deserve?


Dilemmas of Leadership: Idealism versus Pragmatism at Manchester United

February 5, 2010

One of the dilemmas of leadership is that of idealism versus pragmatism. It can be examined in the struggles for control at Manchester United Football Club

Malcolm Glazer, owner of Tampa Bay buccaneers and Manchester United is unpopular with the fans. A protest movement at Manchester has grown in strength in recent months [January 2010] Banners are displayed at home games. And one particularly creative idea has taken off. The protesters have appropriated the colours of the original team. The irony is that supporters wearing the shirts have stopped the financing of the club’s mega-store merchandising. But even this gesture illustrates a dilemma for the protesters. Do they attempt to weaken the club they love, to bring down its owners whom they detest?

It’s been a good two weeks for the team

According to the Guardian

Sir Alex Ferguson may consider this his most satisfactory week and a half since May 1999, when Manchester United staged a smash-and-grab raid to capture the Premier League, the FA Cup and the European Cup in the space of three matches. Now, at a time when his squad and his stewardship have been facing criticism, United have put together a mini-sequence of results that launches them towards the latter stages of the [2009-10] season with their morale at a peak.

First came the 4-0 demolition of Hull City, the occasion for a demonstration of Wayne Rooney’s wonderful vein of goal-scoring form. Next, came the Carling Cup semi-final victory over Manchester City, to shatter their neighbours’ vaulting optimism. And today a convincing victory over Arsenal, the team whose current ambitions most closely resemble their own.

The triumph of a symbolic leadership act

As The Daily Mail put it:

As protests go, it’s a stroke of genius. They’ve managed to solve the conundrum [dilemma?] that has plagued football supporters of every disgruntled club in the land: how to stage a protest and still celebrate a victory. When I saw the focus of the ‘Love United, Hate Glazer’ campaign it struck me as a decidedly limp and passive way to rail against the owners.
Harking back to the origins of Manchester United as Newton Heath was sentimental and attractively nostalgic, but waving a different colour scarf? That’s not going to bring down a corporate empire, is it? Green for naïve; gold for yellow-bellied, I thought. How wrong I was. I saw the effect at Old Trafford on Wednesday night. The mass protest works brilliantly; probably better than anyone imagined.

Why the angry protests?

The episode may be seen as a battle of ideas. According to the protest group, the club has been hi-jacked by a group on American entrepreneurs, loading it with debt and only interested in personal financial gain. The protests were strengthened recently with news that the owners were refinancing the club. The offer document looked as if the finances were in worse state than even the protesters had been claiming.

The Club’s response

Not so, according to the club. Its iconic coach Sir Alex Ferguson has made public appeals that supporters avoid anything that might distract from their main role – giving full-hearted support, and certainly not distracting from this in any way. Chairman David Gill also appealed to the fans to get behind the team.

Gill backed the supporters’ protests before the Glazer takeover but has been loyal since the Americans took control. He denies that United will have to sell their most valuable player, Wayne Rooney, because of debts which stood at £716.5m in June last year [2009]. The Glazers have floated the possibility that United might sell and then lease back their Carrington training ground but Gill said he was “100% convinced” that would not happen.

The Dilemma of idealism versus pragmatism

Leaders have to deal with dilemmas or problems for which there are no simple answers. One such dilemma here is that of the two competing belief systems, of idealism (the protesters) and pragmatism (David Gill, Sir Alex Ferguson, the American owners). The protesters work in the world of symbolic and visionary actions. This is akin to the world of charismatic leaders, one of whom arguably is Alex Ferguson. But Sir Alex, as much as David Gill, has to work in the world of rationality and pragmatism. For one thing, they have a wider set of interests in mind when they make a public statement. Students of leadership are advised to explore the actions of the various stakeholders taking this dilemma into account.


The Battle for British Airways

February 4, 2010

Willie Walsh

Willie Walsh was brought into British Airlines with a justified reputation as a tough negotiator. His toughness has been met with robust rejection by the UNITE union. What’s going on at BA?

The global credit crunch has affected every international business. While there are strategic opportunities, threats are easier to see. According to a recent Business Week report:

Some observers question whether BA will shutter or try to sell (good luck in this environment) the BA OpenSkies subsidiary, which runs flights from Paris and Amsterdam to the U.S., just a year after it was created.

Further stoking investor fear, Virgin Atlantic founder Richard Branson said that he had looked at making a bid for BA but that “the airline wasn’t worth much anymore.” Branson then urged the British government not to intervene to save BA. “It would be better to wait for its demise,” he told the BBC.

At first sight, the news seems unfathomable. It seems that an e-mail had gone out to 30,000 UK employees [June 17th 2009] asking them to volunteer to take up to a month’s unpaid leave, or unpaid work. Such an appeal for loyalty seems unlikely to succeed in a situation where the leader’s style is noted as a rather enthusiastically confrontational one.

The story followed news of a personal gesture by Mr Walsh to work for a month unpaid. But this is too easy to dismiss by workers as being alright for someone like their well-heeled leader. Nor would the new offer be helped by the news that an offer to pilots has been made of shares in the company for a new deal.

According to the BBC

Mr Walsh said BA’s drive to save cash was part of a “fight for survival ..I am looking for every single part of the company to take part in some way in this cash-effective way of helping the company’s survival plan

Strikes averted, strikes threatened

The tough stance cut no ice with the unions. A strike over the Christmas Holiday period was overwhelmingly supported, and narrowly averted through a High Court action by BA. But the Unions continued to plan strike action, probably for the next major Holiday period in the Spring of 2010. In February, The company response was again to take a tough line.

In a ­letter to BA’s 38,000 staff, Walsh offered the opportunity to become “volunteer cabin crew”. He said: “I am asking for volunteers to back BA by training to work alongside cabin crew who choose not to support a strike, so we are ready to keep our customers flying as much as we possibly can if this strike goes ahead.” BA is confident that staff can be trained and certified by the beginning of March 2010, which is the earliest possible date for a cabin crew walkout if, as expected, about 12,000 employees vote for industrial action over staffing cuts.

Discussions between Unite and BA have failed to reach an agreement so far and both sides broke their silences today to cry betrayal. BA said Unite had misled the airline by organising a strike ballot while holding peace talks while Tony Woodley, joint general secretary of Unite, said BA was attempting to break a walkout with “scab labour who have had minimum training”.

A leader’s bid for cooperation

When a leader makes a bid for cooperation, reputation is likely to play a part in its reception. An earlier post in LWD was highly critical of the BA leadership style under Willie Walsh. The outcome may help throw light on the old question of situational leadership.

Creative ideas needed

As often happens, a crisis can drive creative thinking out of the window. But are there opportunities for trying out new ideas to avoid the company sliding into further decline?


Toyota Fights to Preserve its Global Brand

February 4, 2010

Toyota faces its biggest crisis over a serious weakening of its reputation for quality control. How might creative leadership preserve its global brand?

Toyota has been hailed as the company of the future. This site has made no secret of its admiration for the company’s success. But events are now suggesting that the company has a lot of work to do in preserving its global brand. A year ago we wrote [Jan 2009] that Toyota’s business model was on trial:

Toyota is hurting, and Company chief Katsuaki Watanabe recently announced a projection for a first annual trading loss in its seventy year history. But Toyota’s pain still seems likely to be more sustainable than that being suffered by its rivals, whose fate is one of the urgent problems facing incoming President Obama, and who are pressing (begging?) for state bale-outs. For Chrysler, and GM, job losses are inevitable, while even survival in their present state seems increasingly unlikely. Its reaction to over-supply is to announced a temporary suspension of production for 11 days [Feb-March 2009] in all its 12 Japanese production units.

Now, [Jan 2010] Toyota is experiencing one of those crises which can rock a company to its core. Shares plummeted, as the company prepared to recall eight million vehicles globally because of problems with accelerator pedals on seven models.

At a Congressional hearing on Wednesday, [Feb 3rd 2010] US Transportation Secretary Ray LaHood alarmed both investors and consumers with the advice, which he later retracted, that owners of a recalled Toyota should “stop driving it”.

The carmaker said it was not aware of any accidents resulting from the issue and that only 26 incidents involving accelerator pedals had been reported in Europe. Last year, Toyota was forced to recall about 5 million cars worldwide over problems with floor mats trapping pedals. END
Toyota’s UK spokesman Scott Brownlee denied that the firm had delayed the accelerator pedal recall in the UK, stating it was a quality rather than a safety issue.

The Perrier Story

The developing story, although potentially far more significant has echoes of the Perrier case.

This relates to the crisis faced by the Perrier brand in the late 1980s. John Mowen & Michael Minor in their text book on Consumer Behaviour explain what happened

Perrier Group of America announced a highly embarrassing product recall [February 9, 1990]. The recall came in response to a report stating that Perrier’s high-priced bottled water was contaminated with benzene. Even though the U.S. Food and Drug Administration (FDA) said that the benzene levels did not pose “a significant short-term health risk,” Perrier’s management requested the removal of the brand from supermarkets and restaurants in the United States and Canada.

The incident turned into a public relations disaster, in large part because the company’s explanation for the recall kept changing. After traces of benzene were found in Perrier bottles in other parts of the world, company officials altered their original explanation. Benzene, they now said, is naturally present in carbon dioxide (the gas that makes Perrier bubbly) and is normally filtered out before the water is bottled. For unknown reasons workers had inexplicably failed to change the filters. Meanwhile, Perrier still insisted that its famous spring in Vergeze, France was unpolluted. By 1995, Perrier sales had fallen to one-half their 1989 peak. The company had to mount a comeback strategy. While attempting to regain share for the Perrier brand through new distribution channels, the company began to invest in other brands that did not have the Perrier name attached to them. The question remains, however, will the memory of the benzene incident forever tarnish Perrier brand name?

Lessons for Toyota

In times of corporate crisis, Denial is still a likely response. What might Toyota do to avoid the dangers of permanent damage to its future as a brand? Can lessons be learned from the fate of Perrier? What steps might a creative leadership take?

Acknowledgement

With grateful thanks to Susan Moger for her insightful comments on this story.