By David Matias
August 29, 2019 – Until recently, Johnson & Johnson had one of the best brands in the world. As the maker of Tylenol, Johnson’s Baby Powder, and Band-Aid, it commanded a feeling of safety in a world fraught with product horrors. The value of a solid brand such as J&J or Coca-Cola cannot be understated. While valuation methods differ, Coke’s brand alone is worth over $100 billion which can be realized through future sales and profits. Building such a brand takes decades. Destroying a brand can be done much, much faster.
Part of the ethos of the J&J brand is the story of Tylenol that was snatched from a sure death back in 1982, when someone laced Tylenol capsules with cyanide and put them back on the store shelf in Chicago. It was easy to do, since the capsules back then could be opened, manipulated, replaced in the bottle and put back on the shelf. Tamper-proof bottles were rare back then.
J&J’s response to the crisis was epic — it withdrew its leading product from all stores across the nation until tamper-proof bottles could be adopted, which took months. Its actions were governed by the J&J credo – a type of mission statement – that was written in 1943 and put in place just before the company went public. The credo’s opening statement is, “We believe our first responsibility is to the patients, doctors and nurses, to mothers and fathers and all others who use our products and services.” It was a groundbreaking statement — don’t prioritize profits over your community. It was, in many ways, one of the first social impact statements to make it into corporate America.
And in 1982, J&J did just that. It risked sacrificing its most successful brand for the sake of its customers. It was an extremely difficult call that needed to be made by the board — the company could have lost that market share forever. But what it did do was solidify its reputation as a company that cared. Today, J&J sells nearly $400 million worth of Tylenol products in the U.S. every year — a long-term win for the company and the consumer.
Now 37 years later, J&J has lost its way. The national opioid epidemic may not have been the company’s creation, but it most certainly landed itself at the epicenter of it in the public eye. The facts are always open to interpretation. For instance, it manufactured only 1% of the opioids dispensed, but it also owned one of the largest poppy farms in the world and developed a plant, Norman, that was used in most OxyContin. It claims that the doctors are responsible for pursuing appropriate courses of treatment, yet J&J hired McKinsey Consulting to find ways to “get more patients on higher doses of opioids” and study techniques “for keeping patients on opioids longer.” [‘McKinsey Advised Johnson & Johnson on Increasing Opioid Sales’, New York Times online, July 25, 2019]. The further one digs into the details, the more damning it gets.
The tragedy that J&J brought upon itself is that in these actions, it violated its credo. To make matters worse, it failed to recognize this while defending its actions. Just this week, in an interview on NPR/WBUR, the J&J spokesperson espoused the company’s innocence by stating that all labeling was approved by the FDA, hence they are not at fault. This mentality, in a most complete state of institutional denial and lack of culpability, is a final fall from grace.
J&J had the most important asset in corporate America — a brand that was universally trusted. Now, through a series of missteps, oversteps, and blatant arrogance, it allowed itself to look like a greedy and insensitive corporate money monger, for a new generation of mothers, fathers and caregivers.
What a waste.
– DBM