Posted on | February 21, 2011 | No Comments
1. Johnson & Johnson’s adept handling of the 1982 cyanide-laced Tylenol capsules is regarded as the turning point in modern crisis management.
2. But recently, its recurring quality control problems at McNeil Laboratories have resulted in less dangerous problems, but potentially just as damaging to its reputation.
3. Johnson & Johnson seems to feel like this new “minor” problem deserves a less-than-major response. I don’t think the public sees it that way.
I can’t tell you how many times I’ve read the Tylenol crisis management case.
During my undergraduate work at the University of Wisconsin – Eau Claire, Johnson & Johnson’s handling of cyanide-laced Extra-Strength Tylenol capsules was held up as the pinnacle of communication excellence.
It pays to take a step back and briefly remember the scene in 1982. Seven people in the Chicago area were dead after taking Tylenol capsules. The cause was unclear. People all over the country were terrified. (I happen to remember my parents promptly throwing anything Johnson & Johnson related straight in the garbage.)
Johnson & Johnson did what no one expected: They got out in front of it. The issued an immediate recall at a cost of over $100 million. They took responsibility. They designed the first “tamper evident” medicine bottle. Their CEO became the public face of the company.
The positive impact cannot be overstated: Crisis management saved the brand. In fact, it likely saved the company.
Let’s fast forward 18 years.
Today, we find Johnson & Johnson’s Tylenol brand in the heat of a much more competitive painkiller market. The introduction of ibuprofen-based painkillers (Advil, et al) as well as a renewed focus on Aspirin to treat heart conditions has continued to erode market share for acetaminophen products generally, and the Tylenol brand specifically.
Into this scenario, enter another crisis for the venerable brand.
McNeil Laboratories, the manufacturing subsidiary of Johnson & Johnson, has issued a barrage of recalls over the past six months. It’s Washington, PA plant was even forced to close for a time in April 2010 due to “unsanitary conditions”. At issue is a “moldy smell” coming from opened bottles of liquid Tylenol products – including those used primarily by children. (I remember not being able to find them on the shelves last summer.)
In stark contrast to the 1982 recall, no adverse effects have been reported, and the company says it’s okay to continue to use the products.
But think about that for a moment. “No adverse effects”. “You can keep using it.” Really? I’m going to allow a toddler to drink something that clearly smells like mold because you say it’s okay? Fat chance.
It seems like the Tylenol brand has lost its way. The chart below should help us see both cases side by side.
The bottom line seems pretty clear: What is certainly much less of an actual problem (the moldy smell) is turning into a much bigger public confidence problem.
Johnson & Johnson is falling into a crisis management trap: It is the assumption that “big crises require big responses” and “small crises require small responses”. On its surface, that makes sense. It’s logical to conclude that seven deaths require a massive consumer recall and groundbreaking communications strategy, and that a moldy smell requires a quiet recall and reassurances.
The problem is people aren’t rational about medicine – especially medicine they’ll give their children.
For a pharmaceutical company that places a heavy emphasis on babies and young children, every crisis is a big deal. Every crisis deserves a prompt, aggressive response of public responsibility and tangible organizational change.
They did it once, and saved the brand. Fail to do it here, and they might just as well lose it.