5 Crisis Management Truths from the Tylenol Murders

The 1980s Tylenol poisoning murders spurred panic, wide-spread fear, and perhaps the best-ever
corporate response to a major public relations crisis. James E. Burke, then CEO of Tylenol-maker
Johnson & Johnson, died on September 28 at the age of 87. He will be best known for his strong,
decisive leadership and what has widely been recognized as a model of exceptional corporate
crisis management. Fortune magazine named him one of historys 10 greatest CEOs.
There are 5 truths we can learn from Mr. Burkes handling of the poisoning disasterlessons in the
right way to handle a public relations nightmare.
1. Be forthcoming and honest
In 1982, seven people died after taking capsules of Extra-Strength Tylenol that had been laced
with cyanide. The sabotage spurred a national panic about the safety of over-the-counter
medications, and threatened the very survival of Johnson & Johnson. Tylenol products
represented one-fifth of J&Js revenue at the time.
J&J was careful to point out that, based on the evidence, the tampering must have occurred at
the retail stores. However, they did not attempt to shift blame. They were extremely candid.
Burke spoke the truth and that was astonishingly liberating for everyone who heard it because we
have all become so accustomed to public figures telling less than the truth or lying, wrote
Harvard business professor Richard Tedlow.
2. Act quickly and decisively
According to Tedlow, on the afternoon of the first deaths, the company:
set up toll-free numbers manned by company employees
sent 450,000 telex messages to doctors offices, hospitals and trade groups
stopped all Tylenol advertising On the first day.
3. Take responsibility, even if you dont have to
Less than one week after the deaths, J&J spent more than $100 million recalling 32 million bottles
of Tylenol capsules from store shelves. According to a Harvard Business School case study of the
incident, the heads of the FDA and FBI felt that a recall would be an overreaction. J&Js
management put customer safety ahead of their financial concerns.
The company also established relations with the Chicago Police Department, FDA and FBI to
maintain a role in searching for the person responsible for the deaths, and became the first
company to adopt new triple-seal tamper-resistant packaging rules.
4. Treat people with respect
Within months, J&J re-introduced Tylenol capsules to consumers. It distributed over 40 million
$2.50 coupons (enough to purchase a good-size bottle) to compensate customers who threw away
Tylenol during the scare. They also created a new pricing program that saved consumers up to
25%.
In a 1986 news conference, Mr. Burke announced that Johnson & Johnson would stop selling over-
the-counter products in capsules, which could be tampered with, and switch to solid caplets.
When asked by a reporter if he was sorry the company had not acted sooner. Mr. Burke replied
Yes, indeed I am.
5. Good behavior pays dividends
As the tough decisions were being made by Mr. Burke and his executive team, many were
skeptical. They warned that the company's reputation would never recover. Time has proved them
wrong.
Less than a year after re-launching Tylenol, J&J regained a 30% share of the market and once
again became the top-selling pain reliever. Today, Tylenol enjoys the highest ratings for consumer
confidence, and is the most prescribed over-the-counter pain reliever.
Ultimately, the decisions were part of a shrewd plan to salvage the reputation and revenue of
J&J, and return Tylenol to commanding market share. Even so, Mr. Burke proved that putting the
customer first can reap greater rewards than a short-sighted drive to deflect blame and protect
share price.
Maintaining a reservoir of trust among customers helped see J&J through this defining crisis,
and in a 2003 Harvard Business School profile, Mr. Burke noted that Nothing good happens
without trust. With it, you can overcome all sorts of obstacles.