Expository Essay on Johnson & Johnsons Crisis Management

Introduction

Johnson & Johnson, Tylenol, a painkiller, was among the company’s most successful over-the-counter drugs in the United States (Olaniran, 2012). In 1981, Tylenol was attributed with over 19% of the company’s profits during the last three-quarters, of the yearly income turnover. It was the company’s only product with the biggest sales growth potential and was projected to grow to up to 33% in the following year (Olaniran, 2012). Tylenol was also the absolute leader in the painkiller field accounting for over 40% of the market shares in the United States, outselling its close competition such as Bayer and Anacin. However, Tragedy struck in the fall of 1982.

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On the morning of 29th September 1982, Johnson & Johnson was faced with the biggest crisis of their 29 years of operation (Schoenberg, 2004). For an unknown reason, malicious people decided to spike the Tylenol Extra Strength capsules with potassium cyanide. Around the Chicago area, the drugs that were on the shelves ready for sale were opened, spiked with the poisonous substance, re-sealed, then deposited back on the shelf. The poisoned drug was then purchased by unsuspecting people, seven of whom would later die horribly (Schoenberg, 2004). Among the dead was a 12-year girl, Mary Kellerman from Elk Grove, Illinois. The company was faced with the nightmare of explaining to angry consumers, overzealous media, and the authority why suddenly one of their most trusted products was killing people.

Effect of Crisis on Johnson & Johnson

The investigation determines that the killer drugs were indeed spotless and safe as they left the factories where they were manufactured (Collins, 2004). Therefore, it meant that somewhere along the way, from the shelves to the consumer, the drug had to have been tainted. Some had to have taken the drugs from the shelves and laced them with the potassium cyanide poison then returned them to the grocery and pharmacies stores. The unsuspecting victims then bought the drugs and consumed ingested the poison. Once it was established that it was indeed the drug that had caused these deaths, the authorities placed notices in the media warning people not to use the drugs (Collins, 2004). Metro police went around the city of Chicago making public announcements urging people not to use the drug to avoid more fatalities. Drug stores and pharmacies also started destocking the product.

The Companys Move: Leadership Responses

Johnson & Johnson’s executive leadership reacted swiftly and decisively to this crisis. They launched massive public relations promotions campaigns urging the public not to use the Tylenol (Panteleeva, 2002). They also ordered a national recall on all their bottles of the products that had been rolled out. Over two hundred thousand bottles of Tylenol were recalled, and replacement offers were made this time with a safer bottle. At that point, it was almost unlikely and usual for a company to recall its products whatever the dangers they posed to the consumers.

The company’s chairman, James Burke remain one of the companys most admired and respected leader in the United States (Panteleeva, 2002). Mr. Burke’s leadership and forthrightness with both the media, the authority, and the general public was impeccable. Observers note that he was in full control and handled the crisis in the most professional way possible putting the interest of the consumer first and not the company image or profit. The chairman reacted swiftly and decisively to the crisis media coverage, most of which was very negative and accusatory. He formed a strategy team consisting of seven public relations experts and medical examiners.

The leadership first task for the team was how they would protect the consumers (Collins, 2004). Thus their priority was to alert all their consumers not to buy or use Tylenol under any circumstance. They posted adverts all over the media calling on drugs stores not to sell the drug as well as warning the public not to purchase that poisonous product. They also asked the consumers not to consume the drug until it was safe again, that is until the tampering could be established and resolved (Collins, 2004). Along with these notices, they recalled all the Tylenol bottles in drug stores and pharmacies all over Chicago and the surrounding areas. Later, after some contaminated bottles of Tylenol were discovered outside Chicago, the company ordered a recall of the product from all over the country.

The management decided to withdraw the product countrywide even with little evidence that the drug all over the country could have been laced, Johnson & Johnson management, showed that they were more interested in the safety of their customers than they cared about profits and the cost they would incur (Panteleeva, 2002). The outcome of such a decision would later work in their favor in restoring consumer confidence in the leadership of the company and consequently their products. Mr. Burke, in a press conference a month after the crisis gave a chronological account of how the company responded to the crisis as well as what they did to avert and restore the product image.

The Leadership Steps to Managing the Crisis in Johnson & Johnson’s

Observers and scholars of emergency management have come to term the Tylenol crisis as the benchmark of how to deal with a crisis of such magnitude. They term it as an example of successful disaster management of a company's image. It has been labeled as the go-to case, for any business management personnel facing public relations ambush. The company's leadership demonstrated how to handle a major crisis in business. The company leadership used two key responses plan and strategies- Remediation and rectification.

Remediation and Rectification as Components of Crisis Management

The company leadership used various critical responses plan and strategies. They first employed Remediation. The restoration project was meant to seek forgiveness and sympathy from the American people (Seitel, 2012). By remediation, they offered to compensate and help the victims of the poisoned drug. The company provided the bereaved families with both financial and emotional assistance by giving them money and counseling services, despite the fact that they were not responsible for the death of their loved ones. This strategy help lessen the negative perception towards the company among the public.

The Rectification strategy involved taking action to resolve the crisis and make sure it does not recur in the future (Seitel, 2012). Johnson & Johnson started with recalling all the Tylenol in the market and later developed the triple seal packaging method. They also decided to perform a random inspection on all their products in the market, in drug stores, and pharmacies all over the country.

These two strategies were a significant component of the company's crisis management. The remediation strategy earned them forgiveness while the rectification approach earned them sympathy. They were perceived as the unfair victim of malicious people. Their willingness to accept huge losses and compensate the victims even though they were not responsible evoked sympathy among the public (Seitel, 2012). The organization's leadership set the president that the safety of the public should take a central stage and should always be the number one concern for all agencies dealing with consumers goods.

Public Relation Communication Strategies of Johnson & Johnson

The management in Johnson & Johnson used various avenues to communicate their plans and strategy during the crisis (Anthonissen, 2008). They used both the media and other paid advertisements on top of the companys PR specialist to respond to the issues pertinent to the crisis. The placed notices in the press were asking the public to refrain from partaking in the drug. In the first few weeks of the crisis, they established a hotline for consumers to report anyone selling the product as well as reporting any incidence of people sick from taking the product (Anthonissen, 2008). They also made the toll-free line for different organizations and stakeholders to call and receive daily updates of the crisis and how it was being resolved.

Before the crisis, the company management had not paid much emphasis on media coverage, but once the crisis hit, they soon realized the importance of having a good and open communication line with the media (Pusila, 2012). It is the media that spread the news about the killer drug and therefore if the company was to give their side of the story or even disseminate warning to their consumers, they needed friendly media. This was not possible at first, and the company had to work overtime to reassure the public that indeed the drug was safe before it left their factories and only got laced after leaving their premises.

The company held several press conferences at its headquarters and later established television feed live via satellite in New York that allowed these conferences to live nationally. Mr. Burke would then gain more attention when he appeared on 60 minutes where he assured the public of the company’s stand and priority of protecting the interest of their consumers (Pusila, 2012). They also used the media to communicate their triple packing seal. The seal contained a glued box, a plastic seal, and foil over the mouth of the bottle. Tylenol would become the first drug to have this kind of triple protection and set the president for drug packing all over the world. The seal was tamper-resistant, and if it was tampered with, the consumer would easily tell as the seal could be manually replaced.

The Possible Causes of Crisis in Johnson & Johnson

Robert Andrew, a public relations assistant manager at Johnson &Johnson, speaking at a press conference said that the company did not have any idea about the killer drug and only learned after a reporter called the company requesting a statement. He said that the company learned more from the reporter than the reporter learned from him (Anthonissen, 2008). This report revealed something that has become even more prevalent today with the growth of 24 hours information systems on the internet. Therefore, in most cases the media will always be the first on the scene, thus receiving or getting the information before the organization and its leadership.

In the beginning, the media made such a negative analysis. Initial report dwelt on the death of American more so the 12-year-old girl, Mary Kellerman, as caused by Americans most trusted product. Since the drug tampering was not known, the media was going with the assumption that the drug was poorly manufactured (Anthonissen, 2008). All the three leading media networks in American at that time, lead with Tylenol- the Killer drug. CBS put Mary Kellerman’s face on the bottles explaining how she had fallen ill and died the next morning.

The print media took up the story and spun it some more, captioning damaging headlines like Poison madness in the Midwest; Tylenol Killer or Cure, and The Tylenol Scar (Anthonissen, 2008). Over the first one week, the media had covered the story; all America was aware of the death and the poisonous drug in Chicago. It was termed the biggest story ever since Kennedy's assignation. The media continued to focus on the deaths until the information about the tampering emerged. This is always the case, as the media usually focuses on the mos...