Last week Toyota’s president, Mr. Akio Toyota, testified before U.S. Congress regarding the company’s global recall.  Mr. Toyota repeatedly apologized for the recall of millions of cars, offering to take personal responsibility for what had happened.  As part of his testimony, Mr. Toyota stated that the company lost sight of its priorities, growing too large too fast.  He claimed the company’s original priorities were safety first, quality second and volume third.  However, over the years these priorities became scrambled, resulting in volume toppling safety.

This situation is a reminder that during times of growth organizations should continually review their founding principles and mission.  This can help to ensure that an organization’s current strategy does not lead it down a path it does intend nor desire.   Such an exercise may have helped Toyota keep its priorities in proper order.

Published on the Toyota Worldwide website is a set of  “7 Guiding Principles.” Principle #3 states: Dedicate ourselves to providing clean and safe products and to enhancing the quality of life everywhere through all our activities. Interestingly, none of the principles mention anything to the tune of “sell more cars than anyone else.”  Additionally, Toyota North America’s mission statement reads: To attract and attain customers with high-valued products and services and the most satisfying ownership experience in America. Again, the mission is not about volume—rather it is about value and customer satisfaction.

What does it mean to be a transparent organization?  While transparency includes honesty, it is more than just telling the truth when asked.    Transparency at its best involves pro-actively communicating with stakeholders (consumers, suppliers, employees, shareholders, etc) on all aspects of  business.  Being transparent does not mean one has to reveal confidential information or give away company secrets.  Rather, it can entail explaining an organization’s motives, responsibly alerting customers to potential product risks or setting expectations with employees.

Why does transparency matter? Importantly, transparency can make a significant impact on a company’s reputation and ultimately their bottom line.  Pro-active communication can foster greater trust with consumers, employees and suppliers—enabling them to give an organization the benefit of doubt in tougher times. Transparency is not about being “nice” to stakeholders or doing what “feels good”—it serves a critical business purpose.

Edelman Public Relations recently released its 10th annual Trust Barometer, a global survey of nearly 5,000 adults.  This year’s study reveals “trust and transparency are as important to corporate reputation as the quality of products and services.”  When survey respondents were asked about factors that contribute to a company’s overall reputation, transparent and honest practices rise to the top of the list.  Interestingly, financial returns are at the bottom of the list. (Disclosure: I am a former employee of StrategyOne, a Daniel J. Edelman company.)

Today Southwest Airlines announced a new employee volunteer program- Tickets for Time (T4T). T4T puts a unique twist on corporate volunteering programs.  Rather than simply match donations, Southwest is offering their employees the opportunity to “earn” tickets for nonprofit organizations of their choosing.  For every 40 hours an employee volunteers, the benefitting nonprofit organization receives one free roundtrip ticket that can be used for fund-raising or transportation needs.  Each nonprofit can receive up to 6 tickets each year!

This program is interesting for a few reasons:

My recent reading of Dan Pink’s Drive has sparked some interesting thought around the purpose, benefits and unintended consequences of goal setting.  Traditionally in the business world, managers set goals and expect their employees to work toward them.  Typically the purpose of goals is to provide focus for employees and provoke progress.  However, goal setting can have a dark side and lead to stress, irrational thoughts and potentially unethical behavior.

Why I am posting about this?  More and more companies are developing and publically sharing annual Corporate Social Responsibility (CSR) reports.  Included in these reports are goals such as “we will reduce our packaging by X% by 20xx” or “we will eliminate the use of X product over the next year.”  Upon first glance these goals sound great.  They provide focus and give companies (and often their suppliers) something to work toward.  However, these goals might also hinder progress.  Two thoughts…

Such goals put pressure on executives and managers to deliver promised results to stakeholders.  They want to publish in next year’s CSR report that the company accomplished the stated X% reduction in packaging.  However, this pressure may lead some executives to unethical behavior and greenwashing practices. Executives may get “creative” with the numbers, giving stakeholders the illusion that stated goals were met.  It is easy for companies to become overly focused on short-term progress and ignore the long-term practices that they should be implementing (sound similar to profit reporting traps…).