The Value of Values or How values saved Johnson & Johnson

On September 30th 1982, a major crisis hit Johnson & Johnson in

the USA. Six people in Chicago died after ingesting cyanide-laced Tylenol capsules.

Panic ensued, extreme measures were taken to try and make sure no-one else used Tylenol, and J&J management faced the greatest challenge they had ever experienced.

In spite of the FBI’s and FDA’s recommendation to limit Tylenol recall to the Chicago area (to minimise public hysteria and discourage copycats), after a short deliberation J&J’s management decided to launch a nationwide recall to collect and destroy every single Tylenol capsule in the USA. The estimated cost was US$100m (nearly $300m in today’s value).

The reason for doing so was J&J’s Credo, the name given to their value statement, as worded by R.W. Johnson in 1943. It starts with the words “We believe that our first responsibility is to doctors, nurses, and patients; to mothers and fathers and all others who use our products…”.

Within a few weeks J&J transformed itself from a pharmaceutical company into a public-safety organisation. Six weeks after the attack it introduced a new, tamper-proof packaging now standard in the industry.

Afterwards, James Burke, J&J’s president at the time said “[The decisions we made] had a splendid consistency about them…. So, the reason people talk about Tylenol when the Credo discussions come up is that the Credo ran that”.

In spite of preliminary beliefs that J&J could “never sell another product under that name”, as a marketing guru said at the time, Tylenol’s market share, after an initial drop to zero, slowly came back up to surpass the pre-crisis levels. It has been dubbed “the greatest comeback since Lazarus”.

There are many examples of badly handled, not to say disastrous, product recalls. This story shows how clear values can make all the difference between successful and unsuccessful handling of a serious dilemma in organisational life. And if it works under such dire circumstances, it obviously works in day-to-day situations.