Poisoning episode became case study in how to respond to crisis
JOHNSON & JOHNSON CHIEF EXECUTIVE
28-2-1925 - 28-9-2012
JAMES BURKE, whose leadership of Johnson & Johnson during the Tylenol poisoning tragedy in 1982 was admired for its decisiveness, openness and corporate self-sacrifice, has died in New Jersey aged 87.
Burke was responsible for putting the company's resources behind a long list of successful products, including baby shampoo, disposable contact lenses and most famously Tylenol, which in 1981 held 35 per cent of the market for over-the-counter pain relievers.
It is with that drug that Burke's name will forever be linked in business-school case studies and seminars on corporate leadership.
''We talk about 'values-driven companies' - that's what J&J was under Burke,'' said Joseph Bower, a professor at Harvard Business School. ''There are people who think that large corporations are not toys to be traded in the market but are institutions to be built on and improved. If you did what was right, you made money.''
Burke received the Presidential Medal of Freedom from president Bill Clinton in 2000. In 2003, Fortune magazine named him one of history's 10 greatest CEOs.
It was 30 years ago that Burke had a key role in America's response to the chilling deaths caused by Tylenol capsules adulterated with cyanide.
On September 29, 1982, two people in suburban Chicago died of cyanide poisoning. Investigators quickly determined that both had taken Tylenol. The Food and Drug Administration was notified, and the next day McNeil Consumer Products, owned by Johnson & Johnson, began recalling 93,000 bottles of the pills from an implicated lot.
Over the next two days, four people died in the Chicago area, and several days later a seventh and final victim. On October 5, Tylenol laced with a different poison, strychnine, was found in California.
The afternoon of the first deaths, the company set up
toll-free numbers manned by company employees. It sent 450,000 telex messages to doctors' offices, hospitals and trade groups. It stopped all Tylenol advertising.
On October 6, Burke ordered the removal of all 31 million bottles of Tylenol capsules on US store shelves. More than
8 million capsules were tested for poison, and 75 were found to contain cyanide. All were for sale in the Chicago area. The perpetrator was never found.
The recall cost Johnson & Johnson $US100 million immediately. Tylenol's market share fell to 7 per cent. Burke personally took charge of a committee to produce tamper-proof packaging.
When J&J relaunched Tylenol capsules at the end of the year, it distributed 40 million $US2.50 coupons in a gesture to recompense consumers for medicine they might have thrown away.
By the following September, Tylenol had 30 per cent of the market again - nearly its pre-poisoning share.