Archive for February, 2010

 

Pain Medicine and Corporate Integrity

February 16th, 2010
Jim Thomas

In an era marked by cavalier wrongdoing—high profile scandals—ethical fiascoes—unchecked greed—and lack of accountability—the Tylenol case deserves another look. It is an exemplary case of the advantages of corporate integrity.

Johnson & Johnson is one of America’s premier public companies. For decades, it and its products enjoyed a sterling reputation. Then, in the 1980’s it confronted a full-blown crisis. In the Chicago area, seven persons died after taking Tylenol laced with cyanide.

From coast to coast, the story struck the news media like a cyclone. Plaintiff lawyers threatened wrongful death suits, and later filed them. Consumers were robbed of a sense of security and became distrustful. The company’s most priceless assets, its trustworthiness and stellar reputation, were unexpectedly at grave risk.

Contrary to public reaction, the company was blameless. It was responsible for no wrongdoing, no neglect, and no oversight. Nevertheless, J&J faced a critical decision; how should it handle the crisis?

Under the superb leadership of CEO, James Burke, J&J relied upon the indispensable virtue of integrity, the capacity to stand by principles, standards, and ideals. Accordingly, it rejected a policy of denial, evasion, and avoidance and held firm to lines from its Credo, “… our first responsibility is to all who use our products and services…”

J&J adopted a forthright approach. It recalled 30 million bottles of Tylenol, valued at $100 million. Events confirmed it as the right course of action. Post recall surveys revealed that that nearly 90 percent of those polled believed J&J was without fault. It soon emerged once more on the higher ground of public opinion. The marketplace followed suit. When the company re-introduced its product with tamper-resistant packing, it swiftly re-gained 37 percent of market share.

One more case arose. In 1986, a Peekskill New York woman died also from cyanide laced Tylenol. Again, the media rushed upon the scene. The television program, 60 Minutes, sought an interview with a top company official.

Many executives argued strongly against it. They had good reasons. Previous actions brought favorable support. Potential damage from a nation-wide TV interview outweighed possible benefits. CEO Burke disagreed. He was confident the new safety-sealed packaging would win more customers. He granted the 60 Minute interview, along with several others, and customers returned in great numbers.

To this day, J&J’s handling of the Tylenol poisoning remains the gold standard of corporate integrity. It is proof The First Great Virtue—vital element of persons, professionals, companies, and organizations—can produce a big payoff, positive and beneficial to all concerned.