Textbook Corporate Integrity

In August 2001, I interviewed Johnson & Johnson Chairman James Burke for my book, What Do You Stand For?

In the wake of the poor decision-making and crisis management from Boeing CEO, Dennis Muilenburg, it’s worth recalling the time when, in the fall of 1982, Burke and Johnson & Johnson were confronted with a nightmare scenario. Seven people in the Chicago area had died after ingesting Extra-Strength Tylenol capsules that were laced with cyanide. Burke’s handling of this complex and difficult situation has since become a textbook example of corporate integrity and public safety.

I began by asking Burke if he was guided by any particular philosophy.

“I have a number of philosophies that guide me,” he began. “I think everybody, in the long run, is motivated by trust. That anything we do – whether we’re trying to build an organization or trying to create products and services — is guided by the fact that the people who are influenced, our constituencies, want to trust us. If there is a guiding moral principle in most people’s lives, I think it’s integrity.

“I think that the world is searching for trust in all of their institutions. And I think those that perform the best and perform the best over time, whether they’re a parent – a family’s an institution as well – or a teacher, or whether they’re a business, I think we’re all guided by a desire to trust those that we’re working with.

“As I look back on Tylenol, I think that the only way that we could have done what we did was to have all of the institutions that were affected by the Tylenol poisonings believe in us. And I want to emphasize, believe in us, the company. Whether that was the head of the FBI or the head of the FDA or people that we spoke to in Congress or the people at the White House, is you look back and realize how quickly the country responded to that issue. It wasn’t just what we did. The country had to respond in a myriad of ways. And they responded and listened to our advice because they trusted the institution from which that advice was coming.

“There was no lack of trust about Johnson & Johnson. There was no thought that this was something that we were doing that was only in our own self-interest. And that came from a hundred years of experience. While I was the person that had to lead and carry the message to those institutions – and I think they trusted me personally, too – I think they trusted me largely because I represented an institution that had been around for a hundred years and had earned the trust of all of its constituency.”

Was there any backlash from stockholders regarding your decision to pull all Tylenol products from stores?

“There was a lot. Like every process, there was constant questioning about what we were doing from all kinds of places and I encouraged that.

“The way I managed Johnson & Johnson was consistent with the way I managed the crisis. I always encouraged people to fight back and to argue. I used to call it ‘creative conflict’ — that the more you allowed people to argue out issues, particularly complicated ones, the more creative the group would become because new ideas came forward that wouldn’t have come forward without it.

“We didn’t persuade everybody that we were right, in general, because so many people were involved and because this was being debated publicly. You couldn’t turn on the news without seeing it and you couldn’t pick up a newspaper without reading about it.

What was involved in your decision to develop the caplet?

“The product that was poisoned in Chicago was a capsule. And we created most of the technology for caplets as a better delivery system than the capsule along with the packaging. It was a real process. And, hopefully, that process is continuing, of getting as much scientific information as we could as well as staying in touch with what the consumer needed and wanted and listening to all of our critics.”

On a corporate level, are there any lessons to be learned?

“My belief is that those institutions that survive over time are those that have the better consumer franchise because the consumer, collectively, is smarter than any of us are individually.  If they’re allowed to speak, and if leadership is listening to them, over time, better decisions will be made and that’s what happened to us.  We were going out every single day talking to all kinds of people to get their feelings about what we were doing.”

Did you come away with anything from the crisis that had an influence on your own standards, your own principles?

“Well, yes, to this extent. I personally believed that we could save the product. We were not going to lose the business. But I never envisioned the extraordinarily positive effect on the future of that business because of our behavior.

“I thought we might save 60-70% of the business and it’s probably fifteen times as big as it was, now. And I think a lot of that was the cumulative sense of trust that the public evidenced by buying our product. I think the experience confirmed my own deep belief that you can do well by doing good. That’s a buzzword phrase, but I think it’s true. I think that the more we do that’s right, the more successful we are as individuals and as institutions.”

After retiring from Johnson & Johnson, Burke chaired the Partnership for a Drug-Free America. For his public service, he received the Presidential Medal of Freedom award from President Bill Clinton in 2000.

It’s worth noting that tobacco whistleblower Jeff Wigand, who worked at Johnson & Johnson before Brown & Williamson, cited Burke’s actions as an example of integrity that he followed in speaking out about the lies told by big tobacco.

1 comment… add one
  • Gary Lange May 16, 2019, 9:16 am

    Honesty of course helps build trust. The cumulative sense of trust in Tylenol helped Johnson & Johnson grow even more. Great ethical and historical reminder.

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