Failing Crisis Management 101
[This blog was originally posted on July 9, 2010
The philosopher George Santayna is widely credited with the phrase, “Those who fail to study history are doomed to repeat it.” What he actually wrote was “Those who cannot remember the past are condemned to repeat it.” (Perhaps history teachers and historians massaged the quote to enhance their discipline.) In any case, in either formulation is means pretty much the same thing.
When it comes to crisis response and crisis communications, the admirable history of Johnson & Johnson’s response to the 1982 Tylenol recall is studied in journalism, public relations and business courses. In that classic case, J & J recalled 31 million bottles of Extra Strength Tylenol after seven deaths in the Chicago area were linked to the drug. It turned out the deaths were part of a murder or extortion scheme and were in no way J & J’s responsibility. Someone stole packages of the drug from shelves in Chicagoland supermarkets and drugstores, adulterated the tablets with cyanide and then replaced the bottles on the shelves. (Despite an intensive federal and local investigation no one has ever been charged with the murders. A man named James W. Lewis was convicted of extortion when he demanded $1 million from J & J to stop the killings.) Johnson & Johnson won high praise for its swift action — which cost it well in excess of $100 million, which was real money in 1982. At the time, the Washington Post wrote, “Johnson & Johnson has effectively demonstrated how a major business ought to handle a disaster.” J & J won further widespread praise for being open and honest with the public.
Fast forwarding to our own time, the New York Times ran a lengthy story on its business pages headlined “In Case of Emergency: What Not to Do.” http://www.nytimes.com/2010/08/22/business/22crisis.html?_r=1&scp=1&sq=in%20case%20of%20emergency,%20what%20not%20to%20do&st=cse. The story told of the public relations pratfalls taken over the last several months by BP, Toyota and Goldman Sachs. Clearly the top brass of these companies had a Ferris Beuller day off when crisis communications was taught during their MBA programs, so they missed the lesson about Johnson & Johnson’s 1982 Tylenol response.
The Times might have added another corporate public relations pratfaller to that story: Johnson & Johnson, itself. Apparently, the current top brass of J & J joined the BP, Toyota and Goldman execs-to-be and played hooky when the Tylenol case was taught. How do we know this? By J & J’s sluggish response to current crises. (Yes, crises; plural!) This year, after 20 months of consumer complaints, J & J recalled batches of Benadryl, Motrin, Rolaids, Simply Sleep, St. Joseph Aspirin and, ironically, Tylenol because of a sickening smell suspected to be caused by contamination with a chemical bearing the tongue-tripping name 2,3,6-tribromoanisole.
But wait, there’s more. J & J has multiple state attorneys general probing a series of other recalls of over-the-counter medications, the most serious being the firm’s reluctant April  recall of 136 million bottles of liquid children’s medicines which had overly-high dosages of the active ingredient and contamination from metal particles.
The Chairman and CEO of Johnson & Johnson is William Weldon, an executive who apparently missed the Tylenol class when they taught it at his alma mater, Quinnipiac University. However, he must have been in class for the lecture on executive pay because J & J pays him $25.6 million a year, triple the average CEO compensation for big U.S. firms. And that class on cost-cutting? He likely caught that one too; he has slashed Johnson & Johnson’s work force by 9,000 employees.
Belatedly, J & J announced a restructuring of its manufacturing procedures and the creation of a new executive charged with product quality. Does that new post mean that there was no one in charge of product quality at Johnson & Johnson before this? Or was the executive in charge of product quality among the 9,000 people laid off?
If nothing else, the Johnson & Johnson response gives this new twist to George Santayana’s observation: “Those who cannot remember the glorious past are condemned to fail to repeat it.”
9 years ago / No Comments
WRITE A COMMENT