Question

Johnson & Johnson and Crisis Management: Comparison of Two Leaders in Two Crises

Abstract

Crisis management communications is a critical skill for corporate leaders. Failure during crisis management may result in serious harm to the company and in some cases can lead to the exit of the firm from the industry. Successful crisis management may result in little or no damage to a company’s reputation in the industry. This case study will review the crisis management communication strategies of two CEOs at different times in a single company’s history.

Leadership in 1982 Crisis

When the Tylenol crisis happened in 1982, Burke directed the removal of 31 million bottles of Tylenol products valued at more than $100 million from store shelves (Kaplan). Burke took the lead role for all communications relating to the crisis. As the CEO, he was the face and spokesperson for Johnson & Johnson, providing leadership through the crisis. Burke appeared on the U.S. television news program, 60 Minutes, and allowed cameras to be present during strategy sessions (Yang). Burke did not delegate the responsibility of communication to a company spokesperson or division head (Prokesch). Multiple case studies, many through Harvard Business School, detail the way Johnson & Johnson and its leaders handled the crisis.

Leadership Now Crisis

Under Weldon, the company recalled more than 50 products during a 15-month period between 2009 and 2011. The product recalls spanned various subsidiaries, including products such as Motrin, Tylenol, Children’s Tylenol products, Rolaids, and Benadryl from the consumer products division of McNeil Consumer Health Care, the same subsidiary that was so successful with crisis management during the 1982 Tylenol crisis. The quality issues were so severe, with potential for adverse effects to the general public, that in July 2010 the FDA required action on the part of McNeil to address the quality issues at various manufacturing plants. The company submitted a remediation plan for McNeil to the FDA, and in March 2011 the FDA expanded oversight at three plants for McNeil, due to the company’s failure to make significant improvements in quality.

Questions Presented:

Compare and contrast the leadership strategies used by Burke and Weldon: What changes could have been made by either CEO to improve the situation he faced?

Compare and contrast the communication strategies used by Burke and Weldon. What changes could have been made by either CEO to improve the situation he faced?

Compare and contrast the crisis management strategies used by Johnson & Johnson in the two situations.

Answer 1

A good leader requires vision, power to enthuse and mostly ability to lead from the front. Every organisation requires adequate push of responsibility downwards as no large organisation can survive without delegation, this has to be however tempered by retaining power at the top during crisis management. It is in these situations that a leader is expected to jump into the arena face and manage the crisis effectively, at the same time setting a befitting example for all the employees as well as a standard. It also restores employee faith in the leadership and the organisation and induces unity rather than fear of the outcome amongst all cadres. Burke exhibited superlative leadership skills as well as exemplary crisis management. His extensive appearance across all media restored not only employee but public faith in the organisation, that the top man was himself handling the issue and interpreted it as concern for public welfare and compassion.

Contrasting this with Weldon's mishandling of a similar situation in a more modern scenario with better tools at his disposal and an exemplary predecessor only serves to highlight his ineptitude and ineffectiveness as a leader. The very number of recalls 50 products is a clear indicate of lack of quality control and a careless attitude towards upholding the reputation of the brand name and the company. It also reveals poor management and slow and late decisions as repeated recalls donot seemed to have elicited any response from the management. Delegation of responsibility was obviously absent initially as during recalls if action had been taken against erring employees so many repetitions would not have occured. During crisis management where it is important for the leader to step in to ensure no further mistakes and damage to the company the leader here just did not show the courage required to face the crisis head on and find solutions. An absolute contrast to Burke.

Burke became the face of the company during the crisis handling personally all communication of the company through all media and appeared on television extensively, basically showed himself as available, accessible and very much in control of the situation with an aim to set the situation right at the earliest. This not only united the entire workforce and made them stand behind him but regained the trust of the public through the unspoken message he send out of we care for you.

In contrast to this Weldon refused to understand the seriousness of recalls in the pharmaceutical industry allowing them to reach a figure of an unbelievable 50 products. His non-communication with media persons and refusal to act became the biggest silent message that conveyed indifference.

Burke did the best possible thing by just maximising his visibility and availability proving he was not guilty. Weldon had at his disposal technical communication and information systems which could have been used very effectively to ensure absolute coordination between quality assurance, marketing and sales departments with regular reporting to top management for quick decisions and damage control. The recalls should have stopped at 2, then the reluctance to appear before the public and accept blame and convey the conviction of setting things right is unacceptable in a leader of an organisation large as this.

Burke acted like the leader and proved he deserved the top job by rising above the situation and taking upon his shoulders the task of setting right the severe damage to the reputation of the company and loss of trust among the public. His failure to act so quickly and decisively with exemplary decision making skills went a long way in saving the company from severe long term losses and other repurcussions.

Weldon's mismanagement or rather non management of the crisis was obvious from the neglect of repeated recalls and his refusal to either face up to the situation or take stringent action, put in damage control measures and frame a strategy to handle the crisis or unite the organisation in the moment of crisis were all sadly missing. In spite of having a glowing example of optimum leadership during a crisis within the organisation he could not show the courage to rise to the situation even after FDA initiated action in 2010 he slumbered on leading to more serious action. This example clearly brings out the importance of an effective leader at all times but during a crisis it becomes a mandatory requirement.