Michael D. Moberly, Principal, Founder kpstrat and ‘Business Intangible Asset Blog – A Business Intangible Asset Strategist & Risk Mitigator
This post @ Business Intangible Asset Blog explores the multiple tragedies + reputation risks that materialized – became public on September 30, 1982, in Chicago to cause the deaths of 7 citizens and produce unparalleled reputation risks to Johnson & Johnson’s Extra-Strength Tylenol capsules were determined to be laced with cyanide.
Readers are obliged to reflect on how and/or if the presence or absence of various mediums, platforms, and technologies, etc., influenced…
- how these tragedies – events were addressed + treated by the affected parties compared to present day, as same obviously preceded the Internet, cellphones, and keystroke speed – virality of ‘social media’ forms of communication.
We recognize + appreciate now, less so at the time (as I recall) that J&J leadership endeavored, throughout this period of ultimate (brand) adversity, to endure the Tylenol brand attacks + the Tylenol murders, with the Tylenol brand intact.
Stacy St. Clair and Christy Gutowski recently re-painted that portrait in a fine piece for the Chicago Tribune…shortly after sunrise on Sept. 30, 1982, Dr. Edmund Donoghue walked into the Cook County medical examiner’s office and received confirmation of what he had strongly suspected a few hours earlier: Extra-Strength Tylenol capsules were determined to be laced with cyanide and killing people in the Chicago area.
Fortunately, Donoghue recognized his office could not ‘sit on the information’. The public needed to be warned. A press briefing – public announcement must be held. Lives were still at risk.
In advance of the (already scheduled 9:00 a.m.) announcement, Donoghue reached out to executives at McNeil Consumer Products, (the Johnson & Johnson subsidiary that manufactures Tylenol).
Note: J&J had acquired McNeil Laboratories in 1959 and began selling Tylenol over the counter through the newly formed McNeil Consumer Products. Its aspirin-free acetaminophen product now dominated the market for non-prescription pain relievers.
Donoghue…
- learned (during the call) that McNeil heard about the poisonings only a short time earlier when a reporter called for comment.
- asked those on the call to come up with a better alternative to which they said they couldn’t, but said they understood that Donoghue had an important job to do, but they just wanted to know…
- did Donoghue have to say it was Tylenol, specifically? (in the upcoming public announcement/briefing), and
- whether the public announcement was premature?
- interpreted ‘they couldn’t’ response as ‘giving him permission to proceed with the public announcement’.
As expected, the announcement – briefing influenced Tylenol’s valuation to go into a tailspin (as the country’s top-selling pain reliever) from which many predicted it could – would not recover.
Note: Correctly, J&J recalled all Tylenol capsules in the wake of seven deaths and soon sought to rebuild its bestselling (Tylenol) brand.
The economic – operational reality that J&J and their Tylenol (brand) did recover,became the subject of numerous books and university lectures (a few of which I initiated). Each largely characterized J&J’s positions + actions taken following (the September 30, 1982) public announcement as good – better- best examples of corporate ethics and crisis management, ala the sudden materialization of ‘reputation risk’, e.g.,
- the safety seals J&J introduced to packaging following the killings are now routine applications for over-the-counter medications + food products today to mitigate adulteration and render same evident.
During Donoghue’s 9:00 a.m. public announcement it was clearly stated…
- ‘Extra Strength Tylenol capsules had been laced with cyanide and caused deaths in the Chicago area’…
J&J executives convened simultaneously (as the public announcement) at corporate headquarters (New Brunswick, New Jersey) in CEO James Burke’s office. David Collins, the recently appointed chairman of McNeil Consumer Products, was among those present and who described the circumstance as the executives had no idea what to do. Burke turned to Collins, stating, “you take care of this…this is your responsibility.”
Note: Crisis management (reputation risk) of this magnitude + cascading effects had yet to enter the corporate vernacular. This was surely a crisis that needed to be managed.
There’s more to this story of course…
The ‘Business Intangible Asset Blog’ is experientially researched, written, and produced by Michael D. Moberly, to provide readers (business leaders, management teams, boards, and investors with reliable perspectives and nuanced insights to distinguish, value, and safeguard business things intangible designated as mission essential.
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