J&J: IT’S ABOUT TIME OR MORE OF THE SAME

Posted in a ggod reputation guarantees long term profits, Business Crises We Create, cheating the public, Corporate Crisis Management, corporate integrity, Crisis Management, Crisis Management Response, Doing the right thing, Ethics and Crisis Management, Hurting customers, J&J, Johnson & Johnson, Respect your customers, Taking Responsibility for actions of an organization or its employees, when the bottom line is more important than your customers, William Weldon on February 22nd, 2012 by mnayor

 In October of 2010 I highlighted many of the difficulties Johnson & Johnson had been going through since the early part of the decade, from tens of millions of dollars to settle claims against its product Ortho Evra, to product recalls including children’s Tylenol and contact lenses. Other telling issues involved a wrongful termination suit by a whistle blower and a resignation by a senior executive whose conscience would not allow him to remain at J&J knowing what he knew about Ortho Evra.

My conclusion was simply that J&J’s management had veered way off course and had sullied the reputation of one ofAmerica’s greatest corporations, one that was known and respected for its integrity and honesty. I ended with an expression of hope that the lessons learned would set management on the right course once again.

 This was not to be. Just this past week the press reported that J&J took a year to recall a version of its artificial hip after the FDA refused in 2009 to approve it because of its high rate of failures. The device was recalled in 2010, and J&J maintained until that time that the device was safe and its own studies refuted the allegations of professionals. J&J continued to market the hip in Europe and other overseas countries until the recall and sold another version of its hip that didn’t need safety approval in theU.S., even though the hip socket cup, which the FDA found to be flawed, was the same in both products.

 It is interesting to track the timeline of most of J&J’s recent woes to the timeline of William C. Weldon’s tenure as chief executive. Whether directly attributable to Weldon’s misfeasance or malfeasance is not the issue. The torrent of missteps, mistakes,  dishonesty, deception and manipulation has occurred on his watch. The least that can be said without pointing a finger directly at him is that he failed miserably to instill a sense of integrity within the company, a sense of integrity that transcends the needs of the short-term bottom line. So many executives foolishly sit at their desks with blinders on. Weldon and his followers allowed a culture to fester within their walls that calls for the good of the company to transcend the good of the public.

 No executive worth his title would allow the disintegration that has taken place at J&J. Thankfully, William Weldon will step down in April of this year although he will remain as chairman. Alex Gorsky will be the new CEO. Has the Board done the Company, its shareholders and the public a major disservice? Gorsky is cut from the same cloth as Weldon. They both cut their teeth in sales and both are sensitive to the bottom line and enhancing it above all else.  Hopefully Gorsky will recognize the need to build trust, and instill honor from which J&J can once again earn the widespread respect of the public. Build it and they will come. With that will come the financial success that Weldon’s crew tried to obtain on the cheap. If Gorsky has not learned from past mistakes, expect more of the same from J&J. We will all be witness to the transformation of a great American company into just another self-serving medical conglomerate that feeds off the public.

Tags: , , , , , , , , , ,

JOHNSON & JOHNSON: CRISIS MANAGEMENT IN FREE-FALL

Posted in Business Crisis Management, Crisis Communication Failures, Crisis Communication Response, Liability Communications on October 5th, 2010 by mnayor

 The Today show on September 21st dusted off a fairly old story. Ortho Evra, a birth control patch introduced in 2002 and produced by J&J subsidiary Ortho McNeil was in the news again. Since the time of its introduction the patch has been the subject of thousands of court complaints. The product allegedly has the effect of causing deep vein thrombosis, pulmonary embolisms, heart attacks, strokes and death, all stemming from the fact that it can deliver twice as much estrogen to the body as regular birth control pills. J&J has received years of bad press about this subject. No claim has ever gone to trial and J&J continues settlements that total many tens of millions of dollars.

 The Today show reported that it had recently uncovered a 2005 resignation letter from a former J&J vice president saying that he could not remain in his position knowing the high levels of estrogen delivered by the product. The show also reported that another former vice president was suing the Company for wrongful termination based on his whistle-blowing efforts even before the product was introduced to the public.

 Now switch gears to J&J’s non-prescription products. Over the last year, the Company has gone through a slew of product recalls, including infants’ and children’s Tylenol, for reasons including contamination and the presence of foreign matter. The Company also conducted what is termed a “phantom” recall of Motrin by hiring a third party to buy up the product on store shelves in order to avoid adverse publicity. J&J maintains that it did so under an agreement with the Food and Drug Administration. The House of Representatives investigated the recalls, and questioned the alleged agreement with FDA when it heard CEO William Weldon at the end of September. Weldon acknowledged at the hearing that J&J had let the public down by not maintaining its high standards. An F.D.A. official testified that the Company had an inadequate quality system at a number of its facilities. One lawmaker declared that J&J’s failures would mar its reputation for years.

 J&J’s 1982 handling of the Tylenol scare is often cited as the quintessential example of crisis management in modern corporate history. Back then cyanide had been found in bottles of Tylenol in the Chicago area. J&J immediately issued public warnings, called a product recall, created tamper-proof packaging, and before long was fully back in business. The Company was up-front and willing to bite the bullet in the best interests of the public. Unfortunately that does not appear to be the philosophy today.

J&J’s website states that “The values that guide our decision making are spelled out in Our Credo. Put simply, Our Credo challenges us to put the needs and well-being of the people we serve first.” Maybe so, but it appears as if a new breed of management has taken the reins at J&J – new cutting -edge types whose sole concentration is on the bottom line. Yet it might be this competence and cool business efficiency that will have the effect of undermining the extraordinary 120 year old reputation of this venerable institution. The abilities of current management must be tempered with sensitivity and responsibility to the public in order to salvage and maintain the invaluable good will of one of America’s great corporations. Hopefully the lessons learned will again set management on the right course.

Tags: , , , ,
Blog WebMastered by All in One Webmaster.