Recalls are nothing new and it’s all about restoring confidence. The 1982 Tylenol recall case continues to be the gold standard, when Johnson & Johnson immediately pulled every single bottle of Tylenol off the shelves across the country. And it wasn’t even their fault — someone had tampered with a few bottles and laced the pills with deadly cyanide. They did it quickly and offered replacement pills for free. At the time, Tylenol accounted for 17% of JnJ’s net income and 37% of the analgesic market. Market share plummeted to 7% immediately after, but by putting their customers first, that number jumped back up to 30% shortly thereafter. The long-term benefit of having a brand you can trust is priceless — in pharma, trust is the only thing that matters.

In this day and age, where the social space can magnify the perceived severity of a problem, it really pays to act quickly and I would argue, go far beyond what is required. Now that the cat is out of the bag, here’s what Toyota should consider doing to help restore the public’s confidence:

• Make yourself available. Establish a direct phone, email, Twitter, Facebook, you name it venue for anyone who has questions.
• Respond with action. Staff it with people who are empowered to take action and make decisions quickly. When it comes to safety, no one wants the run-around.
• Listen and listen carefully. Customers have all kinds of ideas on how they want the problem solved and how they want to be treated. Quantify and qualify sentiment and act appropriately.
• Go the extra mile. Toyota executives have refused to go the full-extent and their solution admittedly, doesn’t necessarily solve all of the problems. In this case, it would probably mean replacing cars outright — a very costly but potentially overwhelmingly effective. maneuver.
• Keep in touch over the long run. This isn’t a “one and done” effort. Automobiles are significant purchases, so be sure to reach out to affected customers 2 months, 6 months, 1 year, 2 years, 5 years from now. You get the picture.

Toyota is at a critical junction right now. In some ways they’re already behind the curve, so they should really shift into high gear and get going. Customers on the fence need to see action.

As organizations gain confidence — and comfort — with a social approach to doing business, they will see the merit of including customers in different parts of their company. As Jeremiah Owyang outlines, beyond PR and communication, there are natural extensions to marketing, support and product development. We’ve seen vivid examples with Starbucks VIA, Best Buy Twelpforce, and Dell IdeaStorm. I’ve personally had recruiters contact me via LinkedIn and Yammer does a great job as an internal tool. Executives from various Fortune 500 corps are even on Twitter.

So now that we’re well on our way, what’s next?

Organizational re-alignment. While we have momentum, let’s use it to make some fundamentally important changes to how companies are aligned. Right now, too many companies are stuck in silos that mean nothing to their customers. I can’t tell you how many times I’ve been on a call being transferred from one group to the next, as the buck was being passed around. With an organization that is setup to operate the way a customer would, the experience for them becomes a lot better and they get happier. Pretty simple.

Processes designed around customer thinking. Have you ever tried to return something or get support and are forced to learn that company’s language and way of doing things? Let’s make things as simple as they can be so that each step is intuitive and natural. If I bought something online, let me return it in the store. If I need service or support, assess my technical skill level before throwing a dozen pieces of information at me at once. Put yourself in my shoes.

There are probably more that I’m missing, for sure. Getting companies to where customers are going is hard work. The key, like Wayne Gretzky said, is to “skate to where the puck is going to be, not where it has been.“  Customers are moving very quickly and to go where customers are going will force companies to become more like their customers. And that begins by thinking like them.

As it turns out, there is something called the Dunbar’s number, 150, which according to Wikipedia “is a theoretical cognitive limit to the number of people with whom one can maintain stable social relationships.” This has come out of hundreds of years of communities developing and growing. Once they reach around 150, they need to split off and form new ones. This principle has been applied to many different areas of business, including organizational design and company growth patterns. Companies like Intel and Microsoft  have taken this to heart, which explains how their corporate campuses consist of many small buildings rather than huge single monoliths.
Enter Scoble’s Number. It is a new way of looking at social interactions. Instead of the focus on “stable social relationships” it is more about setting up types of relationships and having different levels of engagement and expectations for each. This dramatically expands the absolute number of people you potentially communicate with. So, unless you allocate more time to maintaining your network, this setup reduces the amount of interaction you have with each of them — something has got to give.

Perhaps this is the way forward; segment the type of connections you have and maintain a larger set of weaker connections for a diversity of opinion. As social networks continue to expand, this may well be the future. [Update: Check out David Armano’s recent thoughts on social becoming “to look less social.”

There’s nothing new about syndication. It’s been around for decades, notably in newsmedia and TV. Then the web came around and RSS made it really easy to syndicate just about any piece of content you could think of. But what about syndicating experiences? Is that something that can be done?

Yesterday, Facebook announced that it would open up its status stream to developers. This has a number of implications for how we experience brands. It means we can experience Facebook in ways that Facebook didn’t originally intend but more importantly, it cedes control of the consumption of content from facebook.com to myriad other sites. It’s sort of like RSS for Facebook updates.

While many will say this is a move to better compete with Twitter and it’s very extensible API, this is a win for developers who want to take advantage of the rich data available through Facebook. While this approach has already been somewhat legitimized by RSS years ago with everything now becoming available in feed-form, with Facebook we’re now talking about protected content. How much of this protected content that gets included in the stream isn’t clear.

For a while, I’ve been advocating that e-business is about engaging with customers wherever they live. Facebook knows that it doesn’t want to be a destination, it wants to be a service — a service that can live everywhere, and one that follows customers wherever they wish to spend time. This is an example of “social functionality” as described in Jeremiah Owyang’s “The Future of the Social Web.”

Facebook may end up losing ad revenue because their content is being consumed outside of the site, and presumably with or without ads. But to me, the benefits could outweigh any drawbacks. Benefits include:

• Scale: Opening up the stream gives Facebook content an infinite number of venues to come to life in without having to build the infrastructure; you rely on others to build it.
• Ubiquity: You’ll now be able to get Facebook streams anywhere there’s an internet connection and a screen.
• Extensibility: Developers can slice/dice the content in ways that were not previously available.

(We’re also going to have a whole set of new metrics too, but let’s save that for another post.)

I’ll be keeping my eye out on how creative developers get with the Facebook stream. Something tells me we may be learning more about our friends in ways we hadn’t previously imagined.

In the meantime, I’ve lost track of all the apps I have running to keep track of everyone. Let’s see what I typically have running in the background:

Trillian: Work and personal MSN, AIM, YIM
TweetDeck: Twitter, Facebook status updates
Yammer client: Work-related “yams”
MS Communicator: Work colleague IM’s

Whoa, talk about application overload. (Maybe this is why my computer is so slow.) But this doesn’t even cover Flickr or RSS feeds. I’ve been thinking that it’d be nice to have a SINGLE multi-platform (read Adobe Air) app that could rule them all and have an open architecture that could extend to future uses.

Fallon, the advertising agency, has come up with something close called Skimmer. They call it a “lifestreaming thing” and it’s a great effort at trying to consolidate your social life into a single app. Worth taking a look at if you’re looking to simplify your life.

When Google started out back in what seems like an eternity now (1998), one of their mantras was to “do no evil.” No one really knew what that meant, but for better or for worse, at the time it seemed anti-Microsoft and that resonated with many. The search wars were waged, Google won and rose to prominence. While the Myspace/Facebook rivalry plays out, the topic of “do no evil” comes back into discussion. First it was Beacon, the controversial ad service that Facebookers rejected. Then came the design changes that we live with now.

The recent controversy over Facebook’s new terms of service (ToS) essentially gave them extraordinary power: “irrevocable, perpetual, non-exclusive, transferable, fully paid, worldwide license (with the right to sublicense) to (a) use, copy, publish, stream, store, retain, publicly perform or display, transmit, scan, reformat, modify, edit, frame, translate, excerpt, adapt, create derivative works and distribute (through multiple tiers)….” Yes, it’s lawyerspeak but it certainly doesn’t sound enticing to me or any potential new user.

Needless to say, the public balked and Facebook caved and went back to its previous ToS. Now, the company seems to be backing away from its authoritarian stance, taking a more democratic approach by inviting users to craft the privacy policy. In a way, this is somewhat akin to the government asking its citizens to rewrite its laws. The question now is, how can Facebook monetize its massive traffic in a way that its users can accept and what value will users get in return?

We’ve all been there.

Sitting in a meeting or on a conference call listening to a self-proclaimed social media expert talk endlessly about how brands are all networked to consumers. We’re presented with nice slides with various geometric shapes with sparse text. Highly conceptual, they help set the stage for relative newcomers to understand the ecosystem and the relationship of its constituents. I’ve been guilty of presenting some of these slides too.

A couple of years ago, when few companies really knew what social media was let alone used them in campaigns, this would have sufficed. Depending on their sophistication or comfort level, they would let us design and develop customer experiences that engaged customers with the brand and with each other. At the time, we didn’t necessarily call it “social media” even though it happened to fit the category. We’ve been fortunate to have had a few successes and that has helped generate new business.

Things are different now. Very different. Clients are requesting measurable business results from social media campaigns and programs. Reading Jeremiah Owyang’s post on “Expulsion of the Social Media Gurus,” it is clear that the recession is forcing clients all over to prove demonstrable results. No longer is it sufficient to wax poetic and refer to one’s own blog as validation of a concept. People want specifics that they can use to defend their programs and thus their budgets. Ultimately, their jobs are on the line, so as practitioners, we owe it to clients to provide what we can. Today, that means qualifying and quantifying the benefits, costs and potential risks of running a social media campaign. In other words, provide an ROI for social media.

Many say it is a waste of time trying to quantify the value of social media — afterall, how do you put a value on a conversation? I would say the qualitative value is easy to derive. Take social media away from the mix and many marketers would balk at the idea. The quantitative approach? Now that’s the holy grail.

A while ago, I said that there are no such thing as social media experts. We are all students writing the curriculum for other students. This might be an exaggeration, but it’s pretty clear that this is a new world and the rules are being frequently written and re-written. Just as the initial dotcom explosion changed things a dozen years ago, businesses and people alike, need to brace for impact and learn to embrace change.