As we reported last week, Toyota continues to face severe scrutiny amidst multiple recalls, Congressional hearings, grand jury subpoenas and a rising tide of public questions and concerns.  Arguably the worst news for the car giant is the fact that the end of the barrage may be nowhere in sight – either on the technical fixes or the PR front.  As is often the case in blowups like this, it appears that Toyota has been forced to play catch-up to the events unfolding in front of it (if not over its head) at breathtaking speed.  

Wikipedia tells us that the 3 elements to a “Crisis Management” situation are 1) a threat to the organization, 2) the element of surprise, and 3) a short decision time.  While we can debate about whether or not Toyota should have been surprised by their current predicament, clearly at this point the company is facing a serious threat, did not expect the situation to have evolved as it has (i.e. it’s safe to say Toyota was surprised), and decision cycles continue to shorten.  Put another way, Toyota has been facing and continues to face a crisis; even worse, in the context of elements 2 and 3, this particular crisis appears to have the company very much in reactive mode, responding to events as opposed to shaping them by getting out ahead of things.  Simply put, Toyota is not in control of events at this point in time.

This is where Early Case Assessment (ECA) comes in.  The whole point of ECA is to 1) give a company instant insight into a situation (notice I did not say “case”), which will allow them to 2) quantify the costs and risk associated with the likeliest outcomes of a situation, and 3) make the best, most informed strategic and tactical decisions from the very outset of a situation.   In other words, ECA is meant to allow a party to very quickly become proactive in any situation – making informed decisions that will shape and channel events before they occur.  As we have stated again and again, this is impossible to do unless live data is assessed where it sits, before or concurrently with a legal hold or collection.  This can logically be called “Proactive ECA” because that is exactly what it is: an early, quick assessment of one’s situation that gives one enough crucial insight to become proactive with any situation before events overtake them.  

Unfortunately, most eDiscovery vendors – and, sadly, their customers – simply do not understand this fact or are led in another, less productive direction.  Instead, what these vendors sell and their customers buy is “Reactive ECA.”  In contrast to Proactive ECA, Reactive ECA is neither early nor proactive; in fact, it typically only applies to document collections as part of relatively structured civil litigation (which does not help with Toyota’s current predicament).  Instead of gaining instant insight into a situation by looking at data where it resides – before collection or even preservation – with Reactive ECA, parties must typically send legal hold notices…then preserve huge amounts of data through self-collection or by imaging entire drives…then send the data to an external, third party for expensive and time consuming processing…before bringing the data back in-house or accessing it at yet another third party’s data center where ECA (well, really CA at this point as it’s certainly no longer Early) can, finally, be conducted.  Weeks and hundreds of thousands (if not millions?) of dollars later, events – and costs – have overtaken the client, rendering ECA pointless.

Which brings us back to Toyota.  For obvious reasons, we can’t know for sure what Toyota did or did not do as part of any ECA activities they may have undertaken.  We also do not know if their current predicament is the result of not having the right information from the outset, from decisions that were made early on, and/or from the sheer speed with which events seem to have escalated and taken on a life of their own.  What we do know is that Toyota apparently has access to at least one so-called ECA tool…which appears to have done little to help them in this case.  Why might this be?  Simply put, tools like this are completely Reactive in nature – and never would have enabled Toyota to search and assess live data early on in this ill-fated process.  That, unfortunately, is the real-life embodiment of Reactive ECA in all its glory.

 As  we have stated before, Toyota is one of the most successful, sophisticated companies in the world, which will emerge from this situation strong and vibrant, although perhaps with a new mandate on safety and transparency.  One can only hope that this entire situation will serve as a wakeup call to the entire eDiscovery industry about the shortcomings of Reactive ECA – and why Proactive ECA is so critical to getting out in front of events.