Crisis Management: Toyota Tylenol and Tiger: Crisis response from the archives
A line from the 1962 movie The Man Who Shot Liberty Valance says, “…When the legend becomes fact, print the legend.” The legend of Johnson & Johnson’s 1982 Tylenol recall rises like a totem on the crisis management landscape whenever a calamity like Toyota”s surfaces. Everyone knows the case: J&J, facing seven deaths in Chicago from tampered Tylenol laced with cyanide, rapidly and voluntarily pulls the pills. To this day, many a stumbling company is challenged with, “Why didn’t you do like J&J and yank your product immediately to correct the problem?”
Problem. As many crisis colleagues know, J&J’s gold standard response was not as fast, easily decided, or completely effective as legend has it.
I first became aware of the mythology at a Jim Lukaszewski seminar that showed a grainy old interview of J&J chairman James Burke. Crisis consultant Lukaszewski also examined the timeline. Using my notes from the tape, Lukaszewski, and other public articles of the Tylenol recall, let’s take a closer look.
The 1982 Tylenol recall was not immediate. The first widespread public alert came two days after the first death when the company and the FDA told the public not to take the painkiller. As internal causes were being ruled out, the company first tried to keep any recall localized. A poisoning in California exploded that tactic. Meantime, the FDA, FBI, and CIA opposed a full recall fearing it would set a precedent for caving in to terrorists. Finally, after five days, Burke ordered the national recall anyway. Two lessons: 1) Determining facts and a good strategy can take time. 2) Listen to others but trust your instincts.
When Burke eventually blew off the regulators and ordered total recall he was following a 40-year old J&J credo that puts customers first, employees second, communities third, and shareholders last. He said it took 10 days for him to realize that the crisis was about Johnson and Johnson not Tylenol. (Oddly, the company fought victims’ relatives in court for eight years before finally settling.)
The capsules were the real problem, not the wrapping. Since insufficient packaging was first believed to be the Achilles Heel, the company scrambled for six weeks to develop triple-seal containers and restore Tylenol to the shelves. Tragically, the company’s reputation and market share rebounded only to crash into the same horror all over again in 1986. This time, strychnine-laced Tylenol killed three people in New York State. Elaborate packaging failed. The conclusion: regardless the wrapping, capsules can be opened, contaminated, and closed. So, caplets replaced capsules. Burke said he regretted not eliminating capsules in the first place. Lesson: identifying the right fix can be hard.
So, the Tylenol recall was not as neat as most believe. Furthermore, Tylenol regained dominance but its market share never returned to pre-poisoning levels.
Still, Johnson & Johnson saved lives. Some poisoned Tylenol was caught in the recall before it could kill. J&J set crisis response standards. Until then, recalls and open doors to media rare. A nationwide televised press conference by Burke attracted 600 reporters (although other officials talked to reporters for days before Burke did). Burke created a seven-member strategy committee that met twice a day for eight weeks. He said he researched every action.
Perfect? No. But for its time and all time, remarkable. It remains the gold standard. Question: does current management, now slowly addressing different recall issues and a government inquiry, believe it?
Tiger Feb 19 apology video critique by me is at – http://www.myfox8.com/videobeta/?watchId=daa6d370-6bb8-45a9-b7de-901d5b70c1c3
