The Tylenol Mafia (4 page)

Just prior to Donoghue’s press conference in Chicago, James Murray had answered his office phone at Johnson & Johnson’s headquarters in New Brunswick, New Jersey. John Ritter, a
Chicago Sun-Times
reporter, was seeking information about the history and sales volume of Tylenol. Murray, a J&J public relations executive, sensed that something was wrong. Immediately after ending his call with Ritter, Murray dialed McNeil’s Public Relations Director, Elsie Behmer.

“Is this about the terrible thing that happened in Chicago?” Behmer asked.

“No. What happened in Chicago?” Murray replied.

“We heard some people have been poisoned with Tylenol capsules,” said Behmer, “I’m going down to a meeting right now to find out more.”

As soon as Murray put his phone back on the hook, another call came in. It was Ritter again. He had just found out why he had been asked a few minutes earlier to get the background information on Tylenol, and now he wanted a comment from Murray on the Tylenol poisonings.

He didn’t get one.

Murray’s next call went to Arthur Quilty, a J&J Executive Committee member. Quilty had worked his way up through the ranks of Johnson & Johnson’s Personal Products Company, a manufacturer of women’s health-related products, to be company group chairman of Johnson & Johnson Products, Inc., a group of companies that included the McNeil Consumer Products Company. The Personal Products Company was based in Milltown, NJ, but had a major manufacturing facility in Wilmington, Illinois. When the Wilmington plant opened in 1960, it produced just one product - Modess sanitary napkins. J&J shut that plant down in 1992. In fact, most of Johnson & Johnson’s manufacturing plants in Illinois were shut down in the 1990s. J&J moved the operations for many of these plants to Puerto Rico where certain income generated from patented products made there were exempt from federal income tax.

When the call came in from Murray, Quilty’s first reaction was disbelief. “Are you sure this isn’t a hoax?” he asked. It did not take long to be convinced that it wasn’t.

Down the hall from Quilty’s executive office on the fifth floor, which was reserved for the top echelon of the company’s corporate executives, J&J President David Clare was meeting with J&J CEO James Burke. In the vernacular of Johnson & Johnson, it was their regular bimonthly “one-on-one” meeting. Burke and Clare were engaged in a casual conversation regarding the company’s healthcare program when Quilty barged into Burke’s office and told them about the poisonings near Chicago. Burke immediately picked up the phone and called David Collins, whose office was located several floors below.

Earlier that month, Collins had been appointed company group chairman and named to Johnson & Johnson’s twelve-man executive committee. He had also been given the additional job of chairman of the McNeil Consumer Products Company. Wayne Nelson, the previous chairman of McNeil, had just been named chairman of J&J International. Collins’s promotion had been so sudden and recent that the J&J Facilities Management group had not yet moved his office up to the fifth floor.

Collins, who was a former general counsel for Johnson & Johnson, had followed an unusual career path from J&J’s legal department to several top executive positions at J&J operating companies. Of his recent appointment, Collins said, “It was a felicitous appointment for me, or so I thought at the time. Before this promotion, I had responsibility for Mexico where there had been two devaluations in one year; in Central America where there had been a war; and several South American countries experiencing rampant inflation and more
devaluations
. I was coming from a scenario of problems to McNeil, a company with a great future and what I thought was an opportunity to win a few.”

Collins was on the phone with a J&J subsidiary in Mexico when his secretary interrupted him. She said Burke was on the other line and it was an emergency. Collins told her to relay the message that he would head up to Burke’s office as soon as he finished handling his own emergency. The Mexican government had implemented new monetary controls to try to curb the plunging value of the peso. If Collins could not get supplies fast enough to his Mexican company, it would be out of business by the end of the year. Soon enough, Collins made his way up to Burke’s office where Quilty, Clare, McNeil President Joseph Chiesa, and Burke had already begun to plan their strategy.

Larry Foster, J&J’s vice president of public relations, had taken the day off. He was at home writing a book titled,
A Company That Cares, the History of Johnson & Johnson
. Foster had been a reporter, bureau chief, and night editor of New Jersey’s largest newspaper,
The Newark News
, before Robert Wood Johnson II hired him in 1957 to help form Johnson & Johnson’s first public relations department.

Sometime around mid-morning Foster received a call from Murray with news of the Tylenol problem. “That was a bombshell,” Foster said later. Foster made a beeline to New Brunswick, arriving at Johnson & Johnson headquarters forty-five minutes after Murray’s call. He rushed up to Burke’s office and joined the strategy session.

 
“I never came home for two days,” said Foster. “Slept in the office - what sleep we had.”

“One-word description of my reaction – disbelief,” remarked Foster. “Second description - two words - total disbelief… I think that this best described how many in the company felt that our product could have been used as a murder weapon. I mean, a product that is designed to help you take care of pain would be used as a murder weapon?”

Foster said there were something like 150 or 175 calls the first day, and over a course of the weeks ahead, something like 2,500 reporters covered the story. His staff kept a log of every reporter’s name and the response they were given. Foster sensed very early on that the reporters from the television, print, and radio media thought that Johnson & Johnson was a victim and would, therefore, be cast publicly as a victim.

*****

News of what became known as the “Tylenol crisis” was broadcast nationwide on Thursday evening, September 30, 1982, on all three networks. The Tylenol murders case was the most extensively covered news event since the assassination of John F. Kennedy. Over 100,000 separate articles about the poisonings ran in U.S. newspapers. National and local television news programs broadcast hundreds of hours of coverage. Poison control centers nationwide reported being swamped with calls from worried consumers who had taken Tylenol capsules. One Chicago hospital received 700 calls about Tylenol in one day. Within 15 hours of the first death, investigators had determined that someone had replaced acetaminophen, the active ingredient in Tylenol capsules, with cyanide. “We have a madman out there,” declared Illinois Governor, James Thompson.

Overnight, the market share for Tylenol dropped from 37 percent of the over-the-counter (OTC) analgesic market to just 7 percent. Many public relations experts predicted the end of the Tylenol brand. “I don’t think they can ever sell another product under that name, said Jerry Della
Femina
, a well-known, outspoken advertising executive. “There may be an advertising person who thinks he can solve this and if they find him, I want to hire him, because then I want him to turn our water cooler into a wine cooler.” The expert consensus was that Tylenol was dead as a brand.

No one predicted that Johnson & Johnson would emerge from the Tylenol crisis with a reputation more highly regarded than before its best selling product was linked to seven murders. But it happened. Public Relations Vice President, Larry Foster, explained that Johnson & Johnson simply turned to their corporate business philosophy, known as “Our Credo,” when deciding how to handle the Tylenol situation. Johnson & Johnson still considers its handling of this crisis to be the finest example of the company’s adherence to the high ethical standards of the Credo.

J&J president David Clare said, “Looking back on the events, crisis planning did not see us through this tragedy nearly as much as the sound business management philosophy that is embodied in our Credo. It was the Credo that prompted the decisions that enabled us to make the right early decisions that eventually led to the comeback phase.”

James Burke agreed. “The guidance of the Credo played the most important role in the company’s decision-making,” he said. “After the crisis was over we realized that no meeting had been called to make the first critical decision. Every one of us knew what we had to do. We had the Credo to guide us.”

 
“The Tylenol crisis is without a doubt the most exemplary case ever known in the history of crisis communications,” proclaimed public relations expert, Ten Berge. “Any business executive who has ever stumbled into a public relations ambush ought to appreciate the way Johnson & Johnson responded to the Tylenol poisonings. They have effectively demonstrated how major business has to handle a disaster.”

Johnson & Johnson’s handling of the Tylenol crisis has been ingrained into the psyche of American consumers as the gold standard of crisis management and a standard widely accepted as a model of righteous corporate behavior to which all companies should aspire. Even today, companies in the midst of a major crisis are measured against the standard long attributed to Johnson & Johnson. That standard, however, is based on a myth - a cleverly crafted illusion propagated by the media and public relations industries with plenty of help from Johnson & Johnson. Only a few public relations experts view J&J’s actions in a less than favorable light.

Jack O’Dwyer, of the New York City public relations firm, O’Dwyer PR, has been steadfast in his criticism of the mischaracterization by academia, the media, and the PR industry of J&J’s handling of the Tylenol crisis. Johnson & Johnson did not act quickly in initiating the recall, and they were not at all open to the media, says O’Dwyer. He has been especially critical of Johnson & Johnson’s decision to continue selling the fatally flawed capsule version of Tylenol. The capsules presented the greatest risk for tampering because they could be easily opened and the medicine inside replaced with poison.

Counselor
Helio
Fred Garcia, of the public relations firm, Clark &
Weinstock
, said the myth about the Tylenol disaster is that the company reacted within 24 hours. Perpetuating this myth, said Garcia, was the 1999 movie The Insider, starring Russell Crowe as a tobacco industry whistleblower and Al
Pacino
as a journalist covering the story. In one dramatic scene, Crowe says to
Pacino
, “James Burke, the CEO of Johnson & Johnson...when he found out that some lunatic had put poison in Tylenol bottles, he didn’t argue with the FDA... He didn’t even wait for the FDA to tell him. He just pulled Tylenol off every shelf of every store right across America - Instantly. And then he developed the safety cap... Because, look, as a CEO, sure, he’s
gotta
be a great businessman, right? But he’s also a man of science. He’s not going to allow his company... to put on the shelf... a product that might hurt people.”

*****

James Burke began his career at Johnson & Johnson in 1953 as a product director of Band-Aids. He had previously worked for three and a half years at Procter & Gamble. Burke was a graduate of the Harvard MBA class of 1949. This 1949 graduating class, celebrated as “the class the dollars fell on,” and known as the “49ers,” is famous for the CEOs it produced and the wealth it amassed. In 1989, the median net worth of the living 575 members of the original all male group of 646 was $2 million. The group included the CEO’s of Bloomingdale’s, Capital Cities/ABC, Xerox, Rohm & Haas, Bristol Myers, General
Housewares
, and Johnson & Johnson, to name a few.

“HBS [Harvard Business School] had a powerful impact on me,” said Burke. “When I graduated from college, I was concerned about what I should do with my life. I knew I wanted a career in business, but it wasn’t until I was at HBS that I grasped that business could be a force for good in society. We were constantly reminded of the importance of moral values in our decision making. This attention to ethics shaped my entire career.”

According to a friend and classmate at Harvard Business School, Burke probably skipped years of ladder climbing by making friends when he was a young man with Robert Wood Johnson’s son, Bobby Johnson. Bobby died of cancer in 1970; five years after his father fired him.

Burke briefly interrupted his career at Johnson & Johnson after he had been with the company for just one year. Feeling constrained in his job, Burke quit so he could try his hand at entrepreneurship, launching three separate businesses. Burke brought out two new products on his own - one was a pink tablet that exploded into bubbles when dropped into a bathtub. Both products bombed, and all three of Burke’s business ventures failed.

Burke returned to Johnson & Johnson less than a year after leaving the company, and took charge of the New Products division. He was able to lure some of the best marketers away from Procter & Gamble, but success still eluded him. His early years at Johnson & Johnson were a sequence of failures. Burke later described how his boss had taken him to task early in his career, saying, “You’re a bachelor, and you’re bright. I’ll accept that you can bring a lot to the business. I’ll even accept that maybe Bobby Johnson is right about you, that you can someday run this company. But I don’t see that in you. And I don’t see any indication that you want to pay the price to do it. Now, if you do, we’ll take it a step at a time. You have this job for a year, and this door is open. Whenever you want me I’m available.”

Reflecting back on that conversation, Burke admitted, “He really gave it to me, and he was right.”