Crisis Management is Not the Only Things We Can Learn from J&J's Handling of the Tylenol Crisis

Johnson & Johnson's handling of the Tylenol incident in 1982 is the stuff of legends. As the reader might recall, a "madman" laced Tylenol capsules with cyanide, killing 7 people in the Chicago area in October of that year. J&J has rightly one high praise for how quickly it acted, pulling all Tylenol from all stores in the U.S. within 4-days. Its handling of the crisis helped the company not only rebuild Tylenol's market share within 6-months when many people thought the product was dead, but it also secured people's trust in J&J as a company.

Clearly, J&J did everything right from a crisis communications perspective. They addressed the problem head-on, they were open and honest with the media and frantic customers, and they cared more about their ongoing relationship with customers than they did about the possibility of law suits and the short-term bottom line.

Juxtapose this against what happened in 2007 when Mattel toys that were made in China were found to have high quantities of lead. Mattel missed filing the required 24-hour report with the Consumer Products Safety Commission (CPSC), suffered a fine of over $1 million from the CPSC, and still took more than 6-weeks after that to file its full report. When Mattel's CEO finally went public, he placed the blame on the Chinese for poor manufacturing quality. He later had to go to China and publicly apologize to Chinese officials for his statements.

People who study crisis communications use J&J as the gold standard and offer up Mattel as another example of a company that missed the boat on properly handling its crisis. I'd like to offer a different take on what should be learned.

J&J acted the way it did because it lived by its Credo, a document that acts as a values and brand statement for the company. The then CEO of J&J, James Burke, met with his top executives twice a day as soon as the crisis hit. He used the Credo to question everyone as to what should be done. The Credo's first paragraph states that the company's first order of business is to maintain the trust of the doctors, nurses, mothers and fathers who use its products. Burke and his team recognized that if they did not live up to the Credo, it was of no value. It was the most severe test of the document and it helped the company do the right thing. It acted like a "constitution", guiding the organization when straight thinking might have been difficult. I can imagine how difficult it was to come to grips with the decision since it meant millions in lost inventory, sales and potentially opening the company to law suits, since the withdraw might be interpreted as an admission of guilt.

Like J&J, Mattel has a values and responsibility statement that is prominently displayed on its website. It speaks to its commitment to making products of the highest quality and safety specifications. However, when tested, Mattel demonstrated that its statement of values were merely words, not true guiding principles for the company to live by. By trying to shift blame to the Chinese, who clearly did make the products unsafely, they failed to recognize that one can outsource manufacturing, but one cannot outsource reputation. Mattel owned those Chinese manufacturing plants in an intangible way, even though they may not have appeared on the balance sheet.

I am coming to believe more and more that companies with good reputations have them because they have a set of underlying values that guide their behavior. These values do not allow them to attempt to spin their way out of problems. They deal with them honestly and openly; they get through them and reinforce the trust that customers placed in them before. In fact, that trust is enhanced because they have proved their trustworthiness with their actions. That's the real message of the Tylenol incident that other companies should really pay attention to.