On Friday, McNeil Consumer Healthcare announced a recall of Tylenol and other over the counter products. Significance? I, like others, had held the company up as the gold standard of crisis response for their 1982 response to the fatal poisoning tampering of the popular Tylenol product. In 2004, I wrote about this exceptional response in a column I did for PR Canada. I have reproduced it below this current posting for reference.
Unfortunately, Friday’s recall was colored by a warning letter from the FDA that said in part:
“The Agency is concerned about the response of Johnson & Johnson (J&J) to this matter. It appears that when J&J became aware of FDA’s concerns about the thoroughness and timeliness of McNeil’s investigation, whether all potentially affected products had been identified, and whether the recall was adequate in scope, J&J did not take appropriate actions to resolve these issues. Corporate management has the responsibility to ensure the quality, safety, and integrity of its products. Neither upper management at J&J nor at McNeil Consumer Healthcare assured timely investigation and resolution of the issues.”
I would like to say that this situation takes nothing away from the brilliant execution of the McNeil team in 1982, but I can’t. While they performed so admirably 28 years ago, this current situation does not reflect well on McNeil or Johnson & Johnson. Like it or not, it also reflects poorly on the Tylenol brand. Brands are assets. And when they’re in crisis, their stewards need to choose their goal, keep focused and execute precisely to achieve that goal. I expand on this below.
Primary Crisis Goal:
Make it tight and get it right
By Patrick McGee
Copyright September 2004
When it comes to crisis, my view is that a positive outcome will only be determined when one out of the many goals is designated as the primary goal. If that goal is ‘tight and right’ it will drive the response of the organization — including its actions and its communications – to success.
Realistically, there are a number of goals that organizations have when faced with crisis. Here’s a fairly typical list of commonly promoted goals:
Don’t panic the public.
Avoid/minimize legal action.
Avoid/minimize media coverage.
Minimize financial loss/cost.
Minimize reputation (brand or corporate) damage.
Protect the share price.
Protect the customers (employees, community, public).
Restore operations/business recovery.
Manage the immediate threat.
Nothing wrong with any of them. But if you can only choose one – if you have to make it a tight focus – which would you choose?
I’ve asked organizations to make this choice during crisis. It would have been better had they done so ahead of the situation they were facing. But, there we were, with good goals competing with each other for primacy – because the right primary goal can determine resource allocation, priority of actions, tone, and success.
Does choosing one goal for primacy over the others mean the others will not be realized? Certainly not. Experience shows that choosing the right goal for primacy can ensure the realization of the other goals. In fact, almost all crises that would be considered successfully handled achieved most, if not all, of the goals outlined above.
So, which goal is the best one to choose in order to get the most benefit for the other goals?
I believe that it is to protect/respond to the safety, health, and concerns of people such as customers, employees and so on, first and foremost. With that as the stated primary goal, I believe that everything else is achievable. If we look at crisis situations that have been dubbed successes or failures, the pivotal element was what priority this goal received.
The funny thing is, most organizations have this in their values statements. As well, they are almost obnoxious in touting their focus on the customer or on the fact that their employees are their most important assets. But when the chips are down, profit, hard assets, lawsuits and other considerations often push for priority. And sometimes the wrong goal gets primacy.
So what made Johnson & Johnson/McNeil different in the handling of Tylenol back in 1982? In the admitted absence of a crisis plan, what guided the response to the strychnine poison added to some its products in order to extort money from the company? What led them to make a decision to remove the product from the store shelves – a $100 million decision – against the advice of legal counsel?
It was their “Credo” (definition: any system of principles or beliefs). Here’s what they say about it on their website:
“At Johnson & Johnson there is no mission statement that hangs on the wall. Instead, for more than 60 years, a simple, one-page document – Our Credo — has guided our actions in fulfilling our responsibilities to our customers, our employees, the community and our stockholders.”
I am reproducing it in its entirety below because if Tylenol is the Gold Standard of crisis management we need to understand precisely why. Note in the first section what they identify as “first responsibility” and then the goal they identify as the “final responsibility” in the last section.
Our Credo
We believe our first responsibility is to the doctors, nurses and patients, to mothers and fathers and all others who use our products and services. In meeting their needs everything we do must be of high quality. We must constantly strive to reduce our costs
in order to maintain reasonable prices. Customers’ orders must be serviced promptly and accurately. Our suppliers and distributors must have an opportunity to make a fair profit.
We are responsible to our employees, the men and women who work with us throughout the world. Everyone must be considered as an individual. We must respect their dignity and recognize their merit. They must have a sense of security in their jobs. Compensation must be fair and adequate, and working conditions clean, orderly and safe. We must be mindful of ways to help our employees fulfill their family responsibilities. Employees must feel free to make suggestions and complaints. There must be equal opportunity for employment, development and advancement for those qualified. We must provide competent management, and their actions must be just and ethical.
We are responsible to the communities in which we live and work and to the world community as well. We must be good citizens – support good works and charities and bear our fair share of taxes. We must encourage civic improvements and better health and education. We must maintain in good order the property we are privileged to use, protecting the environment and natural resources.
Our final responsibility is to our stockholders. Business must make a sound profit.
We must experiment with new ideas. Research must be carried on, innovative programs developed and mistakes paid for. New equipment must be purchased, new facilities provided and new products launched. Reserves must be created to provide for adverse times. When we operate according to these principles, the stockholders should realize a fair return.
And did Johnson & Johnson abandon these first principles in favour of other goals when faced with a number of deaths from the criminal act involving its brand? Certainly not. As Larry Foster, Vice President of Public Relations said: “It would have been hypocrisy at its best or worse.”*
The goal definition was tight. It was about customer safety. That’s why they’re the penultimate example of getting it right. That goal helped achieve other critical goals: protecting the brand, financial/business recovery, positive media coverage, manageable legal action, and so on.
So, is your crisis plan guided by a goal? Does it put people first? Will your organization stick with that goal if the price tag heads up to, or north of, $100 million?
If you don’t have a plan, start with your organization’s first principles to set the tight, right goal the plan needs to accomplish.
-END-
*http://www.cces.ca/pdfs/CCES-PAPER-Malloy-E.pdf. David Malloy, PhD University of Regina cites Fritzche 1997 p.132 quoting J&J’s Larry Foster.
UPDATE:
I have been informed of an alternate view of the “gold standard” that has been around for a number of years. It is summarized on the subscription only site O’Dwyer’s PR Daily, but reproduced on the PR Watch website http://www.prwatch.org/taxonomy/term/104?page=7&from=70. Find below the counter argument:
Crisis Management “Gold Standard” Actually Tinny
Source: O’Dwyer’s PR Daily (sub req’d), May 22, 2007
As many speeches, magazines and books have done previously, the current issue of Fortune magazine calls Johnson & Johnson‘s (J&J’s) response to the 1982 Tylenol capsule poisoning deaths “the gold standard in crisis control.” O’Dwyer’s PR Daily writes that “the Tylenol story, as commonly told, is a ‘fairy tale,'” as PR executive James Lukaszewski once called it. J&J’s CEO at the time, James Burke, “learned of the tragedy” of the seven Chicago-area deaths “on Wednesday, Sept. 30, and called a staff meeting for Monday” — in contrast to the “myth” that he acted immediately. J&J also “tried to localize the problem, recalling two batches that were circulated in the Chicago area.” A wider recall wasn’t launched until “after another attempted poisoning using Tylenols took place on the following Tuesday in Oroville, Calif.” And “while Burke has been lauded for his openness with the press, he did not hold a press conference.” The problem was the capsules, which “some pharmacists would not stock,” because they “could easily be taken apart and ‘spiked.'” After another Tylenol capsule poisoning in 1986, J&J’s Burke admitted he was sorry that the company “did not stop making Tylenols in capsules after the Chicago murders.”
While the counter view of the 1982 Tylenol crisis management may be accurate – I wasn’t involved so I can’t say either way – I stand behind the thesis of my 2004 blog above. There will always be competing interests in managing a crisis. Which objective will get primacy and how will that be determined? Look to a defined process or structure to help analyze the competing options. A values statement or credo can provide such a structure.
CommOn! 
Leave a comment